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Nigerian Exchange Limited

Nigerian Stock Market Shines: 11 Bluechip Titans Surge, Commanding 79.2% of Market Value



Aliko Dangote - Investors King

11 blue-chip companies out of the 155 listed on the Nigerian Exchange Limited (NGX) have emerged as dominant players in the equities market for the first eight months of 2023, growing their market value by 79.2 percent.

These standout companies comprise Dangote Cement Plc, MTN Nigeria Communication Plc, Airtel Africa Plc, BUA Cement Plc, BUA Foods Plc, and Guaranty Trust Holding Company Plc (GTCO). Others include Zenith Bank Plc, Seplat Energy Plc, Nestle Nigeria Plc, Stanbic IBTC Holdings Plc, and Geregu Power Plc.

To put it in perspective, the combined value of these 11 companies amounted to N28.849 trillion as of August 31, 2023, representing 79.2 percent of the total market value of N36.423 trillion.

The performance of the Nigerian stock market in 2023 can be attributed to various factors, including the favorable foreign exchange policies implemented by President Bola Tinubu, the removal of fuel subsidies which has attracted increased foreign investor participation, and impressive corporate earnings reported by listed companies.

According to investigations, Dangote Cement has outpaced MTN Nigeria and Airtel Africa, claiming the title of the most valuable stock on the Exchange due to its significant price appreciation during the first eight months of 2023.

Dangote Cement, the Nigerian cement giant, leads the pack with a valuation of N6.13 trillion as of the end of August 2023.

The stock price of Dangote Cement surged by an impressive 37.9 percent, reaching N360 per share by August 31, 2023, from its opening price of N261 per share earlier in the year.

MTN Nigeria also saw significant gains, with its stock price rising by 27.67 percent to close at N274.5 per share on August 31, 2023. MTN Nigeria is presently valued at N5.76 trillion in market capitalization.

In third place among the most valuable companies stands Airtel Africa, boasting a market capitalization of N4.96 trillion as of August 31, 2023. However, the stock price of Airtel Africa faced a 23.5 percent depreciation, settling at N385 per share in August 2023 from N1,635.00 per share at the close of 2022.

Tajudeen Olayinka, Managing Director of Wyoming Capital and Partners, noted that exchange rate volatility had a negative impact on Airtel Africa’s stock, primarily due to its operations in multiple jurisdictions and cross-border listings, which made it sensitive to exchange rate fluctuations affecting earnings and prospects.

According to him, “Airtel Africa renders services to customers in different jurisdictions and enjoys multiple listing across borders, and so, its share price readily reacts strongly to exchange rate volatility across borders, especially, as it affects earnings and earnings prospect.”

The recent devaluation of the Naira further exacerbated Airtel Africa’s challenges as the company announced that it would impact its derivative instruments and financial metrics significantly.

In a move to streamline operations, the Central Bank of Nigeria (CBN) recently introduced changes to the Nigerian Foreign Exchange (FX) Market, including the abolishment of segmentation and the reintroduction of the ‘Willing Buyer, Willing Seller’ model at the Investors and Exporters (I&E) window.

Notably, Guaranty Trust Holding Company Plc (GTCO) emerged as the most valuable bank on the NGX, surpassing Zenith Bank and Stanbic IBTC Holdings.

GTCO’s market capitalization closed at N1.08 trillion on August 31, 2023, while its stock price closed at N36.7 per share, a significant increase from the N23.00 per share it closed at in 2022.

GTCO also reported historical profit before tax of N327.40 billion in the audited half-year ended June 30, 2023, a 2217.09 percent increase from N103.25 billion reported in the prior half-year ending June 30, 2022.

Similarly, the Group declared N280.48 billion profit after tax in H1 2023, marking a 261.63 percent increase from N77.56 billion reported in H1 2022.

Meanwhile, Zenith Bank and Stanbic IBTC boasted market capitalizations of N1.03 trillion and N842.2 billion, respectively, as of August 2023. Zenith Bank’s stock price closed at N32.90 per share, significantly up from N24.00 per share in 2022, while Stanbic IBTC nearly doubled, closing August 2023 at N65.00 per share compared to N33.45 per share in 2022.

Analysts attribute this growth to the anticipation of robust dividends for the 2022 financial year and the solid fundamentals of Zenith Bank and other banks. They highlight that GTCO’s diversification into a holding structure is also contributing to its success.

David Adnori, Vice President of Highcap Securities Limited, emphasized that GTCO’s early filing of 2022 financial results, dividend payouts to shareholders, and its holding structure have positively impacted its performance. However, he noted that GTCO’s stock price is still undervalued on the Exchange.

According to a report by analysts at Coronation titled “Nigerian Banks: A Year of Resilience and Grit,” Nigerian banks are seen as attractive investments due to their discounted valuations compared to their peers and attractive dividend yields. Despite challenges such as stringent regulations, high inflation, and currency shortages, the report anticipates modest earnings growth driven by rising interest rates, non-interest revenue from FX revaluation gains, nonbank businesses, and digital banking.

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Nigerian Exchange Limited

Bearish Sentiment Persists: Investors Lose N112 Billion on NGX



Nigerian Exchange Limited - Investors King

A somber week for Nigerian investors continued as sustained bearish trading on the Nigerian Exchange Limited (NGX) on Thursday resulted in a loss of N112 billion.

This marked the fourth consecutive day of declines following a N242 billion hit on Monday and a N126 billion loss on Tuesday. Wednesday provided no respite due to a public holiday.

The primary catalyst behind this downturn was the market’s reaction to the Senate’s confirmation of Yemi Cardoso as the governor of the Central Bank of Nigeria, which added to the prevailing downbeat sentiment.

By the close of trading on Thursday, the NGX All-Share Index had dipped by 0.31% to settle at 66,448.63 points, while market capitalization stood at N36.367 trillion.

The bearish trend also led to subdued market activity with total deals decreasing by 2.74% to 6,826 trades. Trading volume and value depreciated by 24.78% and 24.67%, respectively, with 273.80 million units exchanged for N3.41 billion.

Among the top value losers were Vitafoam (-9.92%), FTNCocoa (-9.88%), Oando (-9.84%), John Holt (-9.39%), and United Capital (-7.20%).

In contrast, the insurance sector emerged as the biggest winner, posting a 0.83% increase, while the banking and consumer goods sectors recorded losses of 1.01% and 0.68%, respectively.

Accesscorp led in trading volume on Thursday, with 45.87 million units valued at N710.63 million, followed by Zenith Bank with 21.12 million units worth N657.22 million. Unity Bank, United Bank for Africa, and Transcorp also featured among the top five traded stocks.

The persistent bearish sentiment highlights the need for investors to closely monitor the evolving market dynamics and economic policies, as uncertainty continues to cloud the Nigerian financial landscape.

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Nigerian Exchange Limited

Nigerian Stock Market Dips as Weak Momentum Drains N39 Billion from Investors



stock bear - Investors King

The Nigerian stock market experienced a downturn on Friday as the local bourse closed negatively by 0.11% week-on-week, causing investors to lose N39 billion.

This drop in market performance was primarily attributed to weak market momentum.

Both the market capitalization and the Nigerian Exchange Limited All Share Index ended trading lower at N36.847 trillion and 67,324.59 points, respectively, compared to the previous week’s figures of N36.886 trillion and 67,395.74 basis points.

Despite the overall decline, the total turnover of shares showed an increase as 3.911 billion units worth N30.38 billion were traded in 38,536 deals, against a total of 2.933 billion shares valued at N47.45 billion that were exchanged in 44,654 deals.

The Financial Services Industry led in terms of volume traded with 2.774 billion shares valued at N15.24 billion while the Oil and Gas Industry followed with 438.508 million shares worth N5.20 billion, and the ICT Industry ranked third with 294.470 million shares valued at N4.447 billion.

The Insurance sector emerged as the top gainer during the week with a 3.34% increase, followed by Consumer goods (+2.98%), Banking (+0.61%), and Oil & Gas (+0.56%).

In contrast, the Industrial Goods sector saw a 4.80% decline, primarily due to a decrease in Dangote Cement’s share price.

The week saw 48 equities appreciating in value, 40 equities depreciating, and 67 remaining unchanged. Sunu Assurances topped the gainers’ chart with a 32.91% increase in share price, followed by Ellah Lakes Plc (+28.79%) and E-Tranzact International Plc (+28.57%).

Tantalizers led the losers’ table with a 21.05% dip, followed by Guinea Insurance (-20.69%) and McNichols (-13.33%).

Analysts expect mixed sentiments in the market for the coming week, with positive momentum potentially offset by profit-taking activities. The uncertainty is expected to be fueled by half-year earnings reports and continued portfolio reshuffling in preparation for the quarter-end reporting season.

Investors are advised to stay vigilant and adapt to market dynamics as they navigate these challenging times.

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Nigerian Exchange Limited

Dr. Yemi Cardoso’s Nomination Boosts Confidence as Stock Investors Gained N264 Billion



Dr. Olayemi Michael Cardoso

The bullish momentum in the Nigerian Exchange Limited continued on Tuesday as investors pocketed N264 billion in profit following Monday’s gains of N263 billion.

Both the market capitalization and the All-Share Index, which gauge the movement of share prices for all listed companies surged by 0.71 percent to N37.413 trillion and 68,359.22 points, respectively.

This optimistic trading trend emerges as investors increasingly show confidence in the local market and the broader economy, fueled in part by the news of Dr. Yemi Cardoso’s nomination as the Governor of the Central Bank of Nigeria.

As Tuesday’s session drew to a close, the volume of shares traded experienced a significant uptick of 31.33 percent to 676.74 million. However, the number of deals declined by 8.35 percent to 7,659 while the total trade value decreased by 33.97 percent to N5.89 billion.

Market sentiments also leaned towards the bullish side, with 36 gainers outpacing the 27 losers.

Among the top-performing stocks that caught the attention of investors were:

  • Berger Paints Plc, which surged by 9.95 percent to conclude the trading day at N11.60.
  • Oando Plc, which recently released its audited results for 2021, saw a 9.92 percent increase, closing at N13.30.
  • BUA Foods, which gained 6.32 percent to close at N196.70.
  • PZ’s shares appreciated by 1.45 percent per unit, ending at N20.
  • GTCO Plc stock increased in value by 0.43 percent, closing at N35.40.

On the flip side, the top losers included:

  • SCOA Plc, witnessing a 10 percent depreciation in its shares, closing at N1.24.
  • Unilever’s shares recorded an 8.28 percent drop, concluding at N13.30.
  • United Bank for Africa Plc, which lost 1.96 percent in share value, closing at N17.50.
  • FBN Holdings Plc, suffering a 1.69 percent decline, closing at N17.40.
  • Accesscorp’s shares depreciated by 0.29 percent, closing trading at N17.40.

The Nigerian Exchange continues to display its resilience and attractiveness to investors, making it an exciting space to watch for potential opportunities and market trends.

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