Finance

Investors Recover N166bn as Stock Rebounds

Published

7 years ago

September 25, 2017

Investors Recover N166bn as Stock Rebounds

Most investors smiled from the Nigerian equities market last week as their investments recovered from the losses recorded the previous week.

The market had slipped back into the bears’ territory on weak investors’ sentiments. However, amid the volatility, the market gained N165.8billion in capitalisation to close at N12.234 trillion, while the Nigerian Stock Exchange All-Share Index appreciated by 1.28 per cent to close higher at 35,488.81.

Similarly, all other Indices finished higher during the week with the exception of NSE Consumer Goods and NSE Oil/Gas indices that depreciated, while the NSE ASeM Index closed flat.

The NSE Industrial led with 2.94 per cent followed by the NSE Banking Index with 2.39 per cent, just as the NSE Insurance Index appreciated 1.4 per cent. Conversely, the NSE Oil & Gas Index led the decliners, falling by 3.03 per cent trailed by the NSE Consumer Goods Index with 0.23 per cent.

Daily Market Performance

The equities began the week with negative performance the NSE All-Share Index fell by 0.38 per cent to close at 34,873.07. Similarly, value of trading dipped by 47.9 per cent. The depreciation recorded in the share prices of Access Bank, Lafarge Africa, Seplat, Nigerian Breweries, and Zenith Bank was mainly responsible for the negative close.

However, Neimeth International Pharmaceuticals Plc led the highest price gain, shedding 8.5 per cent, trailed by Seplat with 5.0 per cent. Oando Plc and Cutix Plc went down by 4.9 per cent and 4.7 per cent respectively. Transcorp, Jaiz Bank Plc, and Presco Plc closed lower by 4.5 per cent, 4.2 per cent and 4.1 per cent in that order.

Other top price gainers included: FCMB Group Plc (3.7 per cent); FBN Holdings Plc (3.3 per cent); NAHCO Plc(3.2 per cent);Nigerian Breweries Plc (2.8 per cent) and Lafarge Africa Plc (1.9 per cent).

On the positive side, Newrest ASL Nigeria Plc led the price gainers with 4.9 per cent, trailed by Cadbury Nigeria Plc with 4.6 per cent with 4.6 per cent. C & I Leasing Plc added 4.2 per cent, while GTBank Plc and N.E.M Insurance Plc appreciated by 2.7 per cent and 2.5 per cent respectively.

Meanwhile, investors staked N1.54 billion on 162.73 million shares in 3,225 deals, down by 47.9 per cent from N2.96 billion. The three most actively traded sectors were: Financial Services (122.49 million shares), Industrial Goods (23.11 million shares), and Conglomerates (5.59 million shares), while the three most actively traded stocks were: Access Bank (35.38 million shares), Meyer (18.90 million shares) and Fidelity Bank (18.60 million shares).

In terms of sectoral performance, three of five indices closed in the red. The NSE Oil & Gas Index led with 3.0 per cent on account of profit taking in Seplat (-8.6 per cent) and sell-offs in Oando (-5.0 per cent). The NSE Consumer Goods Index followed with a decline of 1.2 per cent due to a decline in Nigerian Breweries (-2.9 per cent) whilst the NSE Industrial Goods Index shed 0.8 per cent on account of Lafarge Africa (-1.9 per cent).

On the bulls’ side, the NSE Banking Index led with a 0.9 per cent gain on the back of GTBank (+2.7 per cent) while the NSE Insurance Index added 0.2 per cent due to upticks in NEM (+2.5 per cent) and Linkage Assurance Plc (+1.7 per cent).

The market maintained a negative momentum on Tuesday with a lower decline in the index. Specifically, the index fell 0.08 per cent to close lower at 34,846.82.

According to analysts at Meristem Securities Limited said the market remained awash with bearish sentiments, as sell pressures noted on certain heavyweight stocks in the consumer goods, banking and oil & gas space continue to drag market performance. However, they said: “We expect an upturn of activities by the end of the trading week.”

A total of 24 stocks depreciated while 14 appreciated yesterday. FBN Holdings Plc, Seven-Up Bottling Company Plc and N.E.M Insurance led the price losers with 4.9 per cent apiece, trailed by Transcorp Plc with 4.7 per cent.

Fidson Healthcare Plc shed 4.1 per cent, while PZ Cussons Nigeria Plc declined by 4.0 per cent. Sterling Bank Plc closed 3.8 per cent lower, just as Skye Bank Plc, UAC of Nigeria Plc and Dangote Flour Mills Plc went down by 3.7 per cent and 2.9 per cent respectively.

On the positive side, Linkage Assurance Plc led the price gainers with 5.0 per cent, trailed by AXA Mansard Insurance Plc with 4.7 per cent. Jaiz Bank Plc and Nestle Nigeria Plc added 4.4 per cent and 1.9 per cent respectively.

However, the value of trading surged by 84 per cent as investors committed N2.83 billion to N174.65 million in 3,783 deals up from N1.54 billion invested in 162.73 million shares in 3,225 deals the previous day.

The three most actively traded sectors were: Financial Services (139.39 million shares), Consumer Goods (11.29 million shares), and Conglomerates (11.02 million shares), while the three most actively traded stocks were: GTBank (33.83 million shares), FCMB (12.58 million shares) and FBN Holdings (12.52 million shares).

A further analysis of the market performance showed that three out of the five sectors depreciated led by the NSE Oil & Gas Index led decliners with 1.0 per cent loss on the back of sustained profit taking in Seplat (-1.5 per cent). It was followed by the NSE Industrial Goods Index that shed 0.4 per cent on account of Lafarge Africa (-0.9 per cent). Also, the NSE Consumer Goods Index fell by 0.2 per cent owing to losses in Nigerian Breweries (-1.2 per cent) and PZ (-4.0 per cent). On the flipside, the NSE Insurance Index gained 0.9 per cent on the back of sustained interest in AXA Mansard (+4.7 per cent) and Linkage Assurance(+5.0 per cent) just as the NSE Banking Index closed 0.4 per cent higher.

However, the market rebounded on Wednesday with the index appreciating by 1.04 per cent to close at 35,207.89. The appreciation recorded in the share prices of Access Bank, Lafarge Africa, Dangote Cement, Nigerian Breweries, and GTBank was mainly responsible for the rebound witnessed in the market.

But while the index closed higher, the value of stocks fell by 59.9 per cent to N2.83 billion invested in 137.35 million shares in 2,977 deals.

The three most actively traded sectors were: Financial Services (74.95 million shares), Industrial Goods (21.34 million shares), and Conglomerates (12.30 million shares), while the three most actively traded stocks were: Meyer (20.00 million shares), Access Bank (14.92 million shares) and Transcorp (12.08 million shares)

Just as when the rebound recorded on Wednesday would be sustained on Thursday, the market depreciated marginally by 0.05 per cent to close at 35,188.97. The stocks that contributed to the negative performance on Thursday were: Access Bank, Zenith Bank, Dangote Cement, Total, and Dangote Sugar.

Market Turnover

Meanwhile, investors traded 1.096 billion shares worth N17.859 billion in 16,070 deals in contrast to a total of 896.618 million shares valued at N15.368 billion that exchanged hands the previous week in 17,048 deals.

However, the Financial Services Industry remained the most actively traded leading with 880.597 million shares valued at N13.614 billion traded in 8,994 deals, thus contributing 80.33 per cent and 76.23 per cent to the total equity turnover volume and value respectively. The Industrial Goods Industry followed with 69.174 million shares worth N676.248 million in 881 deals.

The third place was occupied by Consumer Goods Industry with a turnover of 49.288 million shares worth N2.870 billion in 3,077 deals. Trading in the top three equities namely, Guaranty Trust Bank Plc, Access Bank Plc, Jaiz Bank Plc accounted for 450.567 million shares worth N10.942 billion in 1,834 deals.

Also traded during the week were a total of 58 units of Exchange Traded Products (ETPs) valued at N90,475.00 executed in five deals compared with a total of 1,265 units valued at N145,720.20 transacted two week ago in eight deals.

Similarly, a total of 178 units of Federal Government Bonds valued at N163,407.05 were traded last week in two deals, compared with a total of 5,290 units valued at N5.030 million transacted the preceding week in 15 deals.

Price Gainers and Losers

The price movement chart displayed 25 equities that appreciated in price higher than the 23 of the previous week., while 35 equities depreciated , lower 45 equities recorded two weeks ago.

Linkage Assurance Plc led the price gainers’ chart with 11.8 per cent, trailed by Continental Reinsurance Plc with 9.7 per cent. GTBank Plc appreciated by 7.0 per cent, just as C & I Leasing Plc garnered 6.7 per cent. Skye Bank Plc and Unilever Nigeria Plc chalked up 5.7 and 5.5 per cent respectively.

Other top price gainers include: Newrest ASL Nigeria Plc (4.9 per cent); Cadbury Nigeria Plc (4.6 per cent); Forte Oil Plc (4.1 per cent0 and African Prudential Plc (4.0 per cent).

Conversely, Nigerian Enamelware Plc led the price losers with 16.6 per cent followed by Caverton that shed 9.1 per cent. Neimeth International Pharmaceuticals Plc went down by 8.5 per cent.

Other top price losers were: Transcorp Plc (7.5 per cent); Cutix Plc (7.3 per cent); AIICO Insurance Plc (6.9 per cent); Champion Breweries Plc (6.8 per cent); Seplat (6.4 per cent); Presco Plc (5.6 per cent) Union Bank of Nigeria Plc (5.5 per cent).

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Finance

Presidential Committee to Exempt 95% of Informal Sector from Taxes

Published

20 hours ago

May 14, 2024

Samed Olukoya

The Presidential Fiscal Policy and Tax Reforms Committee (PFPTRC) has unveiled plans to exempt a significant portion of the informal sector from taxation.

Chaired by Taiwo Oyedele, the committee aims to alleviate the burden of multiple taxation on small businesses and low-income individuals while fostering economic growth.

The announcement came following the close-out retreat of the PFPTRC in Abuja, where Oyedele addressed reporters over the weekend.

He said the committee is committed to easing the tax burden, particularly for those operating within the informal sector that constitutes a substantial portion of Nigeria’s economy.

Under the proposed reforms, approximately 95% of the informal sector would be granted tax exemptions, sparing them from obligations such as income tax and value-added tax (VAT).

Oyedele stressed the importance of supporting individuals in the informal sector and recognizing their efforts to earn a legitimate living and their contribution to economic development.

The decision was informed by extensive deliberations and data analysis with the committee advocating for a fairer and more equitable tax system.

Oyedele highlighted that individuals earning up to N25 million annually would be exempted from various taxes, aligning with the committee’s commitment to relieving financial pressure on small businesses and low-income earners.

Moreover, the committee emphasized the need for tax reforms to address the prevailing issue of multiple taxation, which disproportionately affects small businesses and the vulnerable population.

By exempting the majority of the informal sector from taxation, the committee aims to stimulate economic growth and promote entrepreneurship.

The proposal for tax reforms is expected to be submitted to the National Assembly by the third quarter of this year, following consultations with the private sector and internal approvals.

The reforms encompass a broad range of measures, including executive orders, regulations, and constitutional amendments, aimed at creating a more conducive environment for business and investment.

In addition to tax exemptions, the committee plans to introduce executive orders and regulations to streamline tax processes and enhance compliance. This includes a new withholding tax regulation exempting small businesses from certain tax obligations, pending ministerial approval.

Banking Sector

CBN Governor Vows to Tackle High Inflation, Signals Prolonged High Interest Rates

Published

1 day ago

May 14, 2024

Samed Olukoya

Central Bank of Nigeria - Investors King

The Governor of the Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso, has pledged to employ decisive measures, including maintaining high interest rates for as long as necessary.

This announcement comes amidst growing concerns over the country’s soaring inflation rates, which have posed significant economic challenges in recent times.

Speaking in an interview with the Financial Times, Cardoso emphasized the unwavering commitment of the Monetary Policy Committee (MPC) to take whatever steps are essential to rein in inflation.

He underscored the urgency of the situation, stating that there is “every indication” that the MPC is prepared to implement stringent measures to curb the upward trajectory of inflation.

“They will continue to do what has to be done to ensure that inflation comes down,” Cardoso affirmed, highlighting the determination of the CBN to confront the inflationary pressures gripping the economy.

The CBN’s proactive stance on inflation was evident from the outset of the year, with the MPC taking bold steps to tighten monetary policy.

The committee notably raised the benchmark lending rate by 400 basis points during its February meeting, further increasing it to 24.75% in March.

Looking ahead, the next MPC meeting, scheduled for May 20-21, will likely serve as a platform for further deliberations on monetary policy adjustments in response to evolving economic conditions.

Financial analysts have projected continued tightening measures by the MPC in light of stubbornly high inflation rates. Meristem Securities, for instance, anticipates a further uptick in headline inflation for April, underscoring the persistent inflationary pressures facing the economy.

Despite the necessity of maintaining high interest rates to address inflationary concerns, Cardoso acknowledged the potential drawbacks of such measures.

He expressed hope that the prolonged high rates would not dampen investment and production activities in the economy, recognizing the need for a delicate balance in monetary policy decisions.

“Hiking interest rates obviously has had a dampening effect on the foreign exchange market, so that has begun to moderate,” Cardoso remarked, highlighting the multifaceted impacts of monetary policy adjustments.

Addressing recent fluctuations in the value of the naira, Cardoso reassured investors of the central bank’s commitment to market stability.

He emphasized the importance of returning to orthodox monetary policies, signaling a departure from previous unconventional approaches to monetary management.

As the CBN governor charts a course towards stabilizing the economy and combating inflation, his steadfast resolve underscores the gravity of the challenges facing Nigeria’s monetary authorities.

In the face of daunting inflationary pressures, the commitment to decisive action offers a glimmer of hope for achieving stability and sustainable economic growth in the country.

Banking Sector

NDIC Managing Director Reveals: Only 25% of Customers’ Deposits Insured

Published

1 day ago

May 14, 2024

Samed Olukoya

The Managing Director and Chief Executive Officer of the Nigeria Deposit Insurance Corporation (NDIC), Bello Hassan, has revealed that a mere 25% of customers’ deposits are insured by the corporation.

This revelation has sparked concerns about the vulnerability of depositors’ funds and raised questions about the adequacy of regulatory safeguards in Nigeria’s banking sector.

Speaking on the sidelines of the 2024 Sensitisation Seminar for justices of the court of appeal in Lagos, themed ‘Building Strong Depositors Confidence in Banks and Other Financial Institutions through Adjudication,’ Hassan shed light on the limited coverage of deposit insurance for bank customers.

Hassan addressed recent concerns surrounding the hike in deposit insurance coverage and emphasized the need for periodic reviews to ensure adequacy and credibility.

He explained that the decision to increase deposit insurance limits was based on various factors, including the average deposit size, inflation impact, GDP per capita, and exchange rate fluctuations.

Despite the coverage extending to approximately 98% of depositors, Hassan underscored the critical gap between the number of depositors covered and the value of deposits insured.

He stressed that while nearly all depositors are accounted for, only a quarter of the total value of deposits is protected, leaving a significant portion of funds vulnerable to risk.

“The coverage is just 25% of the total value of the deposits,” Hassan affirmed, highlighting the disparity between the number of depositors covered and the actual value of deposits within the banking system.

Moreover, Hassan addressed concerns about moral hazard, emphasizing that the presence of uninsured deposits would incentivize banks to exercise market discipline and mitigate risks associated with reckless behavior.

“The quantum of deposits not covered will enable banks to exercise market discipline and eliminate the issue of moral hazards,” Hassan stated, suggesting that the lack of full coverage serves as a safeguard against irresponsible banking practices.

However, Hassan’s revelations have prompted calls for greater regulatory oversight and transparency within Nigeria’s financial institutions. Critics argue that the current level of deposit insurance falls short of providing adequate protection for depositors, especially in the event of bank failures or financial crises.

The disclosure comes amid ongoing efforts by regulatory authorities to bolster depositor confidence and strengthen the resilience of the banking sector. With concerns mounting over the stability of Nigeria’s financial system, stakeholders are urging for proactive measures to address vulnerabilities and enhance consumer protection.