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Equities Close Lower Despite Halting Seven-day Losing Streak



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  • Equities Close Lower Despite Halting Seven-day Losing Streak

The Nigerian equities market recorded its second consecutive week of decline as the Nigerian Stock Exchange (NSE) All-Share Index fell 1.13 per cent to close at 42,638.83. Similarly, market capitalisation ended lower at N15.302 trillion.

Despite rebounding from a seven-day losing streak on Wednesday, the market closed the week on a negative note as losses recorded in the first two days outweighed the gains of three days.

As a result, the NSE ASI fell by 1.13 per cent to further reduce the year-to-date growth of the market to 11.5 per cent. Apart from the ASI that decline , all other indices finished lower with the exception of the NSE Pension Index that appreciated by 0.08 per cent while the NSE ASeM Index closed flat.

Analysts at Cordros Capital Limited said: “Given two consecutive weeks of profit taking, we expect investors to hunt bargains while also taking position ahead of Q4-17 corporate earnings releases.”

Daily Performance

Still in the bearish mood, the market opened on with a decline of 0.9 per cent on the first day of the week to close at 42,737.89. Similarly, the market capitalisation fell by same margin to close at N15.34 trillion.

The depreciation recorded in the share prices of GTBank, FBN Holdings, Zenith Bank, Dangote Sugar, and Transcorp were mainly responsible for the decline recorded.

According analysts at FSDH Research, the on-going sell sentiment may continue till midweek albeit on a milder scale than in the previous trading sessions

“Profit taking and bargain hunting may likely characterise subsequent trading sessions,” they added.

In all, 36 stocks depreciated, while only 13 appreciated. Eternal Plc led the price losers with 9.6 per cent, trailed by Equity Assurance Plc with 8.3 per cent. AIICO Insurance Plc shed 8.2 per cent, while Consolidated Hallmark Insurance Plc lost 5.7 per cent.

FBN Holdings Plc, GTBank Plc and Multiverse depreciated by 5.0 per cent apiece. May & Baker Nigeria Plc and Fidelity Bank Plc shed 4.9 per cent each.

On the positive side, PZ Cussons Nigeria Plc led the price gainers with 5.8 per cent, trailed by Beta Glass Plc, Glaxosmithkline Consumer Nigeria Plc and Unity Bank Plc with 4.9 per cent apiece.

UAC of Nigeria Plc chalked up 4.1 per cent, just as Jaiz Bank Plc, Linkage Assurance Plc garnered 3.8 per cent and 3.5 per cent respectively. C & I Leasing Plc, ABC Transport Plc and Wema Bank Plc advanced by 2.7 per cent, 2.5 per cent and 2.3 per cent in that order.

All the sectoral indices trended southwards. They were led by the NSE Banking Index , shedding 3.8 per cent following losses in bellwether banking stocks – GTBank (-5.0 per cent) and Zenith Bank (-4.9 per cent). The NSE Insurance Index followed with 1.1 per cent slide while the NSE Consumer Goods Index closed 0.9 per cent lower due to downtick in Nigerian Breweries Plc (-2.9 per cent) and Dangote Sugar Refinery Plc (-4.8 per cent). The NSE Industrial Goods Index and NSE Oil & Gas Index shed 0.4 per cent and 0.2 per cent respectively.

The market recorded its highest decline on Tuesday with capitalisation falling to a new low of N14.97 trillion, while the index closed below the 42,000 threshold at 41,708.15.

Specifically, the index fell 2.41 per cent, the highest decline since the beginning of the year. Similarly, the market capitalisation shed N369.5 billion, propelled by a decline in the shares of bellwether such as Dangote Cement, UBA, Nestle Nigeria Plc, FBN Holdings, and Nigerian Breweries Plc.

The bears were virtually on rampage as 40 stocks depreciated compared with 15 stocks that appreciated. Prestige Assurance Plc led the price losers with 7.1 per cent, followed by Skye Bank Plc with a decline of 6.5 per cent. Consolidated Hallmark Insurance Plc, FCMB Group Plc and United Bank for Africa Plc went down by 6.1 per cent, 5.9 per cent and 5.5 per cent in that order.

Japaul Oil and Maritime Services Plc, Royal Exchange Plc and Union Bank of Nigeria Plc shed 5.0 per cent each. Forte Oil Plc declined by 4.9 per cent, just as Fidson Healthcare Plc, Dangote Cement Plc and Sterling Bank Plc lost 4.8 per cent apiece.

The stocks that escaped the bear run were led by A.G Leventis Nigeria Plc with 7.0 per cent, trailed by Berger Nigeria Plc with 5.0 per cent, just as Etarna Plc appreciated by 4.9 per cent.

Other top price gainers included: NAHCO Plc (4.8 per cent); Linkage Assurance Plc (4.5 per cent); Access Bank Plc (3.9 per cent); African Prudential Plc (3.8 per cent); May & Baker Nigeria Plc(3.3 per cent).

However, the equities market rebounded on Wednesday after a seven-day losing streak. Bargain hunting in banking and consumer goods sectors lifted the index by 1.1 per cent to close at 42,171.80 while market capitalisation added N166.4 billion to close at N15.1 trillion.

The rebound could largely be attributed to buying interest in Banking and Consumer counters with Zenith Bank (+5.0 per cent), United Bank for Africa (+6.3 per cent ) and Nestle (+1.9 per cent) weighing the most on performance.

But Skye Bank Plc led the gainers chart with 10 per cent trailed by FCMB Group Plc that garnered 9.8 per cent. Conversely, First Aluminum led the price losers with 9.1 per cent, trailed by LASACO Assurance Plc with a decline of 5.8 per cent.

Volume and value of trading also rose by 10.7 per cent and 28.1 per cent to 520.7 million shares and N4.7 billion respectively.

Commenting on the performance, analysts at Cordros Capital Limited said: “We expect appetite to remain strong, as investors continue to hunt bargains and take position ahead of Q4-17 earnings, amidst generally improving macroeconomic conditions.”

Also commenting, analysts at Meristem Securities Limited said: “The bullish charge in the market was led by gains recorded on counters in the banking and consumer goods sectors, which offset the loss on the market’s heavyweight, Dangote Cement Plc. We expect a continuation of the bargain hunting activities in the market and an improvement in the market mood to sustain the recovery in the near term.”

The market sustained the positive performance on Thursday with the index rising by 1.0 per cent to 42,604.40 , while market capitalisation added N155.2 billion to close at N15.3 trillion. The performance was majorly driven by price appreciation in FBN Holdings Plc (+8.2 per cent), GTBank (+2.0 per cent) and Dangote Cement Plc (+0.6 per cent).

Sectorally, it was largely bullish as four of five indices closed in the green while one closed flat. The NSE Banking Index led gainers, rising 1.3 per cent. The NSE Industrial and NSE Consumer Goods indices trailed, rising 0.9 per cent and 0.8 per cent respectively. The NSE Oil & Gas Index appreciated marginally by 0.01 per cent, while the NSE Insurance Index however closed the day flat.

Market Turnover

Meanwhile, a total turnover of 2.940 billion shares worth N27.924 billion was recorded in 28,570 deals during the review week, compared with a total of 4.426 billion shares valued at N24.236 billion that exchanged hands in 29,573 deals the previous week.

The Financial Services Industry led the activity chart with 2.174 billion shares valued at N17.033 billion traded in 19,013 deals, thus contributing 73.96 per cent and 61 per cent to the total equity turnover volume and value respectively. The Services Industry followed with 232.482 million shares worth N216.990 million in 734 deals.

The third place was occupied by Conglomerates Industry with a turnover of 170.422 million shares worth N499.400 million in 1,578 deals. Trading in the top three equities namely – Linkage Assurance Plc, Skye Bank Plc and FCMB Group Plc accounted for 809.798 million shares worth N1.130 billion in 2,551 deals, contributing 27.5 per cent and 4.04 per cent to the total equity turnover volume and value respectively.

Price Gainers and Losers

A look at the price movement chat showed that 48) equities depreciated in price, lower than 64 equities of the previous week, while 30 equities appreciated in price during the week, higher than 23 equities recorded in the preceding week.

Consolidated Hallmark Insurance Plc led the price losers with 22.8 per cent, trailed by First Aluminium Nigeria Plc with 19.5 per cent.

Courtville Business Solutions Plc shed 17.3 per cent, just as Japaul Oil & Maritime Services Plc and Prestige Assurance Plc went down by 14.2 apiece.

Other top price losers included: Unity Kapital Assurance Plc (13.6 per cent); Multiverse Mining and Exploration Plc (12.5 per cent); Equity Assurance Plc (12.5 per cent); Caverton Offshore Support Group Plc (11.6 per cent);and Sterling Bank Plc (11.4 per cent).

Berger Paints Nigeria Plc led the price gainers with 11.4 per cent, followed by Beta Glass Plc with 10.2 per cent. Access Bank Plc appreciated by 5.4 per cent, just as A.G Leventis Nigeria Plc and GSK Nigeria Plc chalked up 5.2 per cent and 4.9 per cent in that order.

Top price gainers include: Transcorp Hotels Plc (4.8 per cent); WAPIC Insurance Plc (4.6 per cent); African Prudential Plc, PZ Cussons Nigeria Plc (4.1 per cent); and Zenith Bank Plc (3.5 per cent).

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


CBN Directs Banks to go After COVID-19 Financial Criminals



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



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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Apapa Customs Command Generate N367.6bn in Nine Months



Nigeria Customs Service

Customs Command Apapa Realises N367.6bn Between January and September

The Nigeria Customs Service, Apapa Command, said it generated N367.6 billion in the nine-month ended September 2020.

Mohammed Abba-Kura, the Customs Area Controller, disclosed this while speaking with newsmen in Lagos.

He said a total of 328 containers of goods worth N19.5 billion were seized during the period. This, he said represents an increase of 37 containers when compared to the same period of 2019.

Speaking further, Abba-Kura said the N367.6 billion realised in the first nine months of the year, represented a 17 percent or N54.1 billion increase from N313.5 billion it collected during the same period of 2019.

The Apapa Command generated N14.3 billion as revenue in the third quarter from customers’ duty and other charges.

He said “The difference recorded was made possible as a result of resilience of officers in ensuring that importers and agents are made to do proper declarations, adhere strictly to import/export guidelines in tandem with extant laws.”

Commenting on the seizures, Abba-Kura said, “These items were seized mainly because of various forms of infractions which range from false declarations, non-adherence to import/export guidelines and failure to comply with other extant regulations as enshrined in the Customs and Excise Management Act.

“In the area of export trade, the period under review recorded exportation of goods worth N26,273,706,822 exported from the country.”

“These exported goods include mineral resources, steel bars, agricultural products among others with a total tonnage of 378,447 million tonnes free on board value of $85.8m. Similarly, the volume of export from January to September 2020 stood at N78.6bn with FOB $257,003,965.”

He added that the compliance level rose to about 60 percent during the period, highlighting the reason for the surge in the number of seizures made.

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