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Dumping of Dangote Cement, Zenith Bank’s Shares Drags Market Down

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  • Dumping of Dangote Cement, Zenith Bank’s Shares Drags Market Down

Losses at the close of trading on the floor of the Nigerian Stock Exchange, on Tuesday, were driven majorly by sell-offs in Dangote Cement Plc, Zenith Bank Plc and International Breweries Plc.

The NSE All-Share Index slid by 0.7 per cent to 42,299.56 from 42,579.48 basis points while year-to-date return contracted to 10.6 per cent.

The share prices of Dangote Cement, Zenith Bank and International Breweries fell respectively by 0.7 per cent, 2.5 per cent and 4.8 per cent.

Accordingly, investors lost N100.5bn in value as the equities market capitalisation declined to N15.18tn from N15.28tn.

However, there was increased activity in the market as volume traded rose by 14 per cent to 438.651 million units on the back of trade in Transnational Corporation of Nigeria Plc (45.1 million), Diamond Bank Plc (41.6 million), and FBN Holdings Plc (38.2 million) while value traded advanced by 60.8 per cent to N8.8bn largely due to trade in Nestle Nigeria Plc (N2.9bn), Guaranty Trust Bank Plc (N1.9bn) and Nigerian Breweries Plc (N0.9bn).

Performance across sectors was mixed as three of five NSE indices declined. The banking index depreciated the most, down by 1.3 per cent due to respective losses of 2.5 per cent, 0.8 per cent and five per cent in Zenith Bank, GTBank and Union Bank of Nigeria Plc.

The industrial and consumer goods indices followed, falling by 1.1 per cent and 0.2 per cent, respectively as investors sold off positions in Dangote Cement, Lafarge Africa Plc, International Breweries and Honeywell Flour Mill Plc.

However, the oil/gas index improved, up by 0.9 per cent following a rally in Total Nigeria Plc and Conoil Plc, which appreciated respectively by 6.9 per cent and 9.8 per cent. In the same vein, buying interest in NEM Insurance Nigeria Plc and Linkage Assurance Plc drove the insurance index higher by 0.3 per cent.

Market breadth further weakened following appreciation in 18 stocks against 37 laggards. Unity Bank Plc, Conoil Plc and May & Baker Nigeria Plc led the gainers’ chart, appreciating respectively by 9.8 per cent, 9.8 per cent and 8.9 per cent while Africa Prudential Plc, Unic Diversified Holdings Plc and Multiverse Plc led the losers, sliding respectively by 9.4 per cent, 7.4 per cent and 6.1 per cent.

“Although sentiment has remained soft, we believe this is largely due to investors exiting penny stocks in order to position in bellwether counters that have historically paid dividend. Hence, we do not expect the current downtrend in the market to be sustained,” analysts at Afrinvest Securities said in a post.

Also, FSDH Group analysts said, “The 2017 earnings release is expected to improve market activity and investors’ sentiment in coming sessions.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

Total Currency in Circulation Increased by N56.44bn in September

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Currency in Circulation Rose by N56.44bn in the Month of September to N2.426 trillion

The total currency in circulation increased to N2.426 trillion in the month of September, the Central Bank of Nigeria (CBN) report has shown.

In the report released on Wednesday, the apex bank said the total currency in circulation stood at N2.369 trillion as of the end of August.

The amount then rose by N56.44 billion in September to N2.426 trillion.

A further breakdown of the report revealed that currency in circulation declined by 6 percent in the first quarter of the year to N2.29 trillion, about 7.5 percent below the same quarter of 2019.

The figure stood at N2.35 trillion in May, then rose to N2.39 trillion by the end of July.

While reserve money expanded by 5.9 percent to N12.96 trillion when compared to a 20.7 percent growth recorded in April 2020.

The report also noted that at N10.61 trillion, liabilities to other depository corporations grew 70.5 percent above the previous month’s growth rate of 59.7 percent.

The report said, “The heightened uncertain outlook due to the lockdown encouraged more cash to be held by the public.

“This was evident from the increase in currency in circulation, compared with the level in the preceding month.

“Currency in circulation rose by two per cent to N2.35tn at the end of May 2020, compared with the increase of 0.5 per cent at the end of April 2020.”

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CBN Directs Banks to go After COVID-19 Financial Criminals

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Godwin Emefile

Central Bank Asks Banks to Stay Abreast Frauds and Rising COVID-19 Financial Crimes

The Central Bank of Nigeria has directed all financial institutions in Nigeria to update alert protocols in their Anti-Money Laundering/Combating the Financing of Terrorism monitoring tools, in accordance with emerging trends of rising COVID-19 related financial crimes.

In a circular titled, ‘Administrative letters to all banks and other financial institutions’ issued on Monday and signed by J.M. Gana, the Director, Financial Policy and Regulation Department, the apex bank said changes in business activities and financial transactions due to the shift caused by COVID-19 pandemic have led to the surge in financial crimes globally.

Therefore, it said financial institutions must now adapt quickly and keep abreast of the new emerging financial risks and other developments to arrest this new and emerging ML/TF.

According to the circular, this includes strategic investment in data mining and artificial intelligence software to monitor financial transactions effectively and report as quickly as possible.

The central bank said the Nigerian Financial Intelligence Unit, the central repository of suspicious transactions and other financial information, had released a comprehensive report on STRs and others.

It stated that the NFIU had identified cybercrimes, frauds, counterfeiting and substandard goods, diversion of public funds and misuse of non-government organisations funds as some of the ongoing crimes that banks across the nation need to stay abreast and report.

Other suspicious transactions and red flags identified in the report were some e-commerce companies with little or zero history or internet presence suddenly receiving multiple payments from unrelated third parties.

Similarly, it said individuals with zero or little history of financial transactions receiving multiple payments from unrelated third parties. It also noted that customers who suddenly start delaying in the supply or purchases of medical supplies and payment of goods linked to known brands, yet the beneficiary is an individual, not a corporate company should be flagged.

The measures, the apex bank said were necessary due to the rising numbers of unusual transactions from banks’ customers and unscrupulous individuals.

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Union Bank Secures US$40 Million Facility from IFC Global Trade Finance

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Union Bank Secures US$40 Million Facility from IFC Global Trade Finance

Union Bank of Nigeria Plc said it has secured a US$40,000,000 finance guarantee facility from the IFC, a member of the World Bank Group.

In a note to the Nigerian Stock Exchange, the lender said the facility would help boost access to finance for local businesses and enable increased international trade for Nigeria.

It explained that the facility “will support Union Bank to establish working partnerships with nearly 300 major international banks within the GTFP network, thereby broadening access to finance and reducing cash collateral requirements for Nigerian businesses.

“The facility will enable the continued flow of trade credit into the Nigerian market at a time when imports are critical, and the country’s exports can generate much-needed foreign exchange.

Under the IFC’s Global Trade Finance Program (GTFP) terms of the agreement, GTFP offers benefiting banks partial or full guarantees covering payment risk on Union Bank’s trade-related transactions.

Accordingly, these guarantees are transaction-specific and may vary depending on underlying instruments like letters of credit, trade-related promissory notes, guarantees, bonds, and advance payment guarantees.”

Emeka Emuwa, Chief Executive Officer of Union Bank, said, “Union Bank is pleased to join the IFC’s Global Trade Finance Program. This is a significant achievement as we continue to expand our trade financing offerings to our
customers. Even in these peculiar times, we remain focused on contributing to economic growth by developing tailored solutions that help our customers harness the teeming opportunities that still exist in the Nigerian market.

Eme Essien Lore, IFC’s Country Manager for Nigeria, said, “Keeping trade moving is essential to growth and job creation, especially during the challenging economic times we are living through today. We welcome Union Bank to IFC’s Global Trade Finance Program and value a partnership that will make a positive impact on Nigeria’s economy.

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