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Nigerian Exchange Limited

Nigerian Banking Index Gains 6.08%, Sets Stage for Year-End Santa Claus Rally



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The Nigeria Exchange Limited (NGX) witnessed an impressive surge last week with the banking index appreciating by 6.08% during the past week.

This significant uptick translated into a substantial growth of investors’ wealth by N66 billion.

The bullish trend in banking stocks was bolstered by the surge in investors’ sentiment, which resulted in a 5.01% gain on Wednesday.

However, this jubilant atmosphere faced a momentary setback as sell-offs ensued.

The trigger for this market correction was the revelation that certain Nigerian banks with international operations had capital adequacy ratios below the regulatory benchmark, an announcement made by the Central Bank of Nigeria in its second-quarter report on the financial soundness indicator.

The apex bank elucidated, “The development reflected a decline in the banks’ total qualifying capital relative to the increase in risk-weighted assets due to the depreciation of the naira exchange rate, as a result of the adoption of a market-determined exchange rate policy by the Bank.”

Despite this temporary setback, the overall performance of the stock exchange indicated positive momentum.

The All-Share Index reflected a modest but positive rise of 0.17% to  71,541.74 index points while the market capitalization settled at N39.148 trillion in the week under review.

This notable movement, primarily driven by investor activity in the banking and consumer goods sectors, has set the stage for what is anticipated to be the much-anticipated Santa Claus rally.

The year-to-date return for the index expanded to 39.59%.

While the banking and consumer goods indexes recorded gains of 6.08% and 0.21%, respectively, other sectors experienced varied outcomes.

Indices such as NGX Main Board, NGX Insurance, NGX ASeM, NGX Oil & Gas, NGX Lotus II, and NGX Industrial Goods faced depreciations ranging from 0.22% to 3.03%.

Sell-offs across specific stocks, including Oando, MRS Oil, Juli Plc, BUA Cement, Axa Mansard, and Mutual Benefit, contributed to the recorded dips.

The upward trajectory in the Banking Index was fueled by notable price increases in key stocks, including Ecobank Transnational International, AccessCorp, FBN Holdings, Jaiz Bank, PZ Cussons, Northern Nigeria Flour Mills, and International Breweries.

Throughout the week, a total turnover of 2.423 billion shares worth N45.07 billion was traded in 34,704 deals.

This marked a decrease from the previous week’s trading activity, emphasizing some caution among investors.

The Financial Services Industry took the lead in terms of activity, with 1.726 billion shares valued at N22.76 billion traded in 18,190 deals.

It contributed significantly to the total equity turnover volume and value, accounting for 71.23% and 50.50%, respectively.

The Conglomerates Industry and Consumer Goods industry secured the second and third positions in the activity chart, underlining diverse investor interest.

As the market navigates a path between optimism and caution, analysts are anticipating further profit-taking activities and potential corrections following the recent surge.

According to analysts at Cowry Asset Management Limited, investors are likely to continue rebalancing their portfolios in anticipation of the reporting and dividend earnings season.

Also, the planned stress test of the capital adequacy ratio of Nigerian banks with international operations looms, contributing to an atmosphere of caution.

Cowry Research emphasized the prevailing global risks, including high inflation and forex volatility, prompting investors to tread cautiously as they await the anticipated Santa Claus rally.

The cautious sentiment underscores a prudent approach amidst an ever-changing economic landscape.

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Nigerian Exchange Limited

Nigeria’s Market Falls 1.09% Amid Decline in Key Sectors



Nigerian Exchange Limited - Investors King

Nigeria’s stock market closed the trading week ended Friday, April 12, with a decline of 1.09% following a downturn influenced by notable drops in the banking, insurance, and consumer goods sectors.

This shift resulted in a loss of about N638 billion for investors during the two-day trading week, which was shortened due to public holidays for Eid Mubarak.

The Nigerian Exchange Limited’s (NGX) All-Share Index (ASI) decreased from an opening high of 103,437.67 points to 102,314.56 points.

Meanwhile, market capitalization also dropped from N58.498 trillion to N57.860 trillion over the review period.

The market’s month-to-date (MtD) performance fell by 2.15%, and the year-to-date (YtD) return is now at 36.83%.

Futureview research analysts had previously forecasted a mixed performance in the equities market as investors adjusted their positions in anticipation of upcoming corporate actions and dividend payouts.

The analysts also predicted a possible shift in focus towards the fixed income market, which could influence short-term investment decisions.

While the market faced challenges this week, analysts expect a resurgence of buying interest driven by upcoming corporate actions and earnings reports, attracting investors looking to benefit from dividend payments.

Their recommendation to investors is to consider investing in high-quality stocks with strong fundamentals for potential returns.

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Nigerian Exchange Limited

VFD Group Plc’s Rights Issue Listed on NGX’s Daily Official List



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The Nigerian Exchange Limited (NGX) has listed VFD Group Plc’s Rights Issue on its Daily Official List.

The move follows the approval by the Securities and Exchange Commission (SEC) and represents a crucial step in the company’s growth trajectory.

The Rights Issue comprises 63,342,455 ordinary shares of 50 kobo each priced at N197.33 per share, bringing the total value of the issue to N12.499 billion. With this listing, VFD Group Plc’s total issued and fully paid-up shares have surged from 190,027,365 to 253,369,820 ordinary shares.

According to a report by NGX, the additional shares listed arose from VFD’s Rights Issue on the basis of one ordinary share for every three ordinary shares held as of October 12, 2023.

This move underscores VFD Group Plc’s commitment to expanding its shareholder base and enhancing liquidity in the market.

The approval by SEC for the Rights Issue further solidifies VFD Group Plc’s position in the market. Gbeminiyi Shoda, the Group Company Secretary of VFD Group Plc, confirmed that the Qualification Date for the Rights Issue was October 12, 2023, with the application list opening on December 20, 2023, for a maximum period of 31 days.

VFD Group Plc’s Rights Issue comes on the heels of its recent listing on the Main Board of the Nigerian Exchange Limited (NGX). The listing of 190 million units of shares at N244.88 per share added N46.527 billion to NGX’s market capitalization, reflecting the company’s growing influence in the Nigerian capital market.

VFD Group Plc, known for its sector-agnostic proprietary investment approach, aims to create positive and socially conscious ecosystems by aggregating potentially viable businesses. The Rights Issue listing underscores the company’s strategic move to increase visibility, access capital, and enhance liquidity, ultimately benefiting its investors and stakeholders.

Investors and market analysts are closely watching the developments surrounding VFD Group Plc as it continues to expand its footprint in the Nigerian financial landscape. With the successful listing of its Rights Issue on NGX, the company is poised for further growth and value creation in the market.

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Nigerian Exchange Limited

Nigerian Exchange Sees Historic N18.203tn Gain in Q1, 2024



Nigerian Exchange Limited - Investors King

The Nigerian Exchange (NGX) has kicked off 2024 with an unprecedented gain as stock investors pocketed N18.203 trillion gain in the first quarter alone.

Investors are reaping the rewards of a bullish trading pattern that has extended from the inauguration of President Bola Ahmed Tinubu in 2023 into the new year.

The Exchange All-Share Index closed at 74,773.77 index points in 2023, a 45.90% gain it carried into the new year while the market capitalization surged to N40.917 trillion by the end of the year.

The first quarter of 2024 witnessed the continuation of this bullish trend as many companies grew in market capital and profit.

In the first quarter, FBN Holdings joined the trillion-naira club while Dangote Cement emerged as the first entity to achieve a market cap of N10tn.

The listing of Transcorp Power Plc further fueled market capitalisation close to the historic N60 trillion mark by March’s end.

Oscar Onyema, the immediate past Managing Director/Chief Executive Officer of the Nigerian Exchange Group, likened the market’s boom to the pre-2008 global meltdown period, highlighting the parallels in euphoria and growth.

Despite challenges posed by escalating inflation, potential interest rate adjustments, and volatile exchange rates, investor confidence remained steadfast.

The NGX-Alternative Security Market recorded a 135.25% gain amid economic uncertainties.

Analysts dissecting the market’s performance emphasized the role of sentiment over fundamentals, indicating a surge driven by optimism rather than concrete economic improvements.

While profit-taking activities and market volatility punctuated the quarter, the overall trajectory remained upward.

Looking ahead, projections for the second quarter anticipate mixed performance, with factors like macroeconomic instabilities and corporate actions shaping investor sentiment.

Nevertheless, the NGX’s stellar performance in Q1 2024 stands as a testament to the resilience and potential of the Nigerian equities market, offering a beacon of hope amid global economic uncertainties.

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