- Equities Market Remains Bearish on Continuing Sell Pressure
Sell pressure at the stock market persisted last week despite the release of more improved financial results and declaration of dividends by some companies for 2017 financial year. The market has remained bearish in the past weeks as investors sold to take profit in bellwether stocks.
However, the negative performance was expected to cease once the full year corporate earnings began to come in. Despite the release of improved results with significant returns being recommended, the sell pressure persisted. Having declined by 2.9 per cent the previous week, the market depressed further last week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell by 1.11 per cent to close at 41,472.10, while market capitalisation ended lower at N14.982 trillion.
Similarly, all other indices finished lower during the week with the exception of the NSE CG, NSE Banking and NSE Pension Indices that appreciated by 1.07 per cent, 3.31 per cent and 1.67 per cent respectively.
Trading resumed for the week with a decline as the bears remained in control for the fourth consecutive session. As a result, the NSE ASI fell 0.21 per cent to close lower at 41,845.92. Similarly, market capitalisation closed lower at N14.96 trillion.
The depreciation recorded in the share prices of Nigerian Breweries, Ecobank Transnational Incorporated, Flour Mills, Transcorp, and Stanbic IBTC Holdings among others were mainly responsible for the decline.
However, the bears were strongly in control as 36 stocks depreciated compared with 14 others that appreciated. Cadbury Nigeria Plc led the price losers with 9.6 per cent, trailed by Niger Insurance Plc with 9.5 per cent. Unity Bank Plc shed 8.8 per cent, while FTN Cocoa Processing and LASACO Assurance Plc fell by 7.1 per cent and 5.5 per cent respectively. WAPIC Insurance Plc and Linkage Assurance Plc closed 4.9 per cent and 4.8 per cent lower in that order.
Other top price losers included: Wema Bank Plc, Dangote Flour Mills Plc, Skye Bank Plc, Ecobank Transnational Incorporated (4.8 per cent apiece); Continental Reinsurance Plc (4.6 per cent); University Press Plc, Tantalizer Plc(4.5 per cent); Japaul Oil & Maritime Services Plc (4.4 per cent).
On the positive side, C & I Leasing Plc led the price gainers with 9.9 per cent, trailed by United Capital Plc with 5.6 per cent, while N.E.M Insurance Plc (4.8 per cent). Cutix Plc appreciated by 4.4 per cent, just as PZ Cussons Nigeria Plc and African Prudential Plc chalked up 2.3 per cent and 1.5 per cent respectively
Market analysts at Cordros Capital said: “In our view, it is likely investors take advantage of soft prices to hunt bargains in the equities market, leading to a positive outlook in the short term. Also, strengthening macroeconomic fundamentals remain supportive of gains in the medium to long term.”
The market depreciated further on Tuesday as more investors locked in profits, thereby depressing the market by 0.35 per cent to 41,686.36. Market capitalisation decreased by N68.6 billion to be at N14.8 trillion.
The depreciation recorded in the share prices of GTBank, Lafarge Africa, Flour Mills, Nigerian Breweries, and Seplat contributed to the negative close.
The bearish trend reduced the year-to-date (YTD) growth to 8.5 per cent as at Wednesday. The bearish performance was largely driven by sell pressures in Nestle, Stanbic IBTC Holdings, and Lafarge. While the index fell, market activity improved as volume and value traded inched 22.7 per cent and 44.4 per cent higher to 488.7 million shares and N5.6 billion respectively.
African Alliance Insurance Plc (82.8 million shares), Japaul Oil (75.6 million shares) and Fidelity Bank (63.9 million shares ) were the top traded stocks by volume while Dangote Cement (N1.1 billion), GTBank (N886.6 million) and Nigerian Breweries (N867.7 million) led the top traded stocks by value.
In terms of sectoral performance, three indices closed negatively, one ended in the bulls’ territory, while one remained flat. The NSE Industrial Goods Index led losers with 2.5 per cent, trailed by the NSE Insurance Index with 1.9 per cent. The NSE Consumer Goods Index shed 0.7 per cent. The NSE Banking Index was the sole gainer, chalking up 0.1 per cent, while the NSE Oil & Gas Index stagnated.
The market recovered after three days of decline on Thursday, rising by 0.33 per cent. According to market analysts, the market upbeat performance was due to the improved investor confidence in the market, driven by earnings releases.
“Today’s gain was largely across the bellwether counters in the market as the NSE-30, which accounts for the most liquid and capitalised counters in the market recorded a gain of 0.45 per cent,” they said.
Sectoral performance showed that the five closed in bulls’ territory. The NSE Insurance Index led with 1.6 per cent, followed by the NSE Oil & Gas Index with a 0.6 per cent appreciation. The NSE Banking Index and NSE Industrial Goods Index rose by 0.5 per cent apiece, while the NSE Consumer Goods Index added 0.4 per cent.
Meanwhile, a total turnover of 2.328 billion shares worth N28.927 billion in 25,530 deals was recorded last week investors on the floor of the exchange in contrast to a total of 2.444 billion shares valued at N36.665 billion that exchanged hands last week in 26,712 deals the previous week.
The Financial Services Industry led the activity chart with 1.784 billion shares valued at N20.385 billion traded in 16,823 deals, thus contributing 76.6 per cent and 70.5 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 171.111million shares worth N5.404 billion in 4,055 deals. The third place was occupied by Oil and Gas
Industry with a turnover of 124.065million shares worth N296.727 million in 1,607 deals. Trading in the top three equities namely-Zenith Bank Plc, Access Bank Plc and Fidelity Bank Plc accounted for 664.391 million shares worth N10.659 billion in 6,429 deals, contributing 28.54 per cent and 36.8 per cent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 4,165 units of Exchange Traded Products (ETPs) valued at N78,276.06 executed in 15 deals, compared with a total of 1.889 million units valued at N10.512 million that was transacted the previous week in four deals.
Similarly, a total of 5,152 units of Federal Government Bonds valued at N4.562 million were traded this week in 24 deals, compared with a total of 40,566 units valued at N44.313 million transacted two week ago in 29 deals.
Price Gainers and Losers
The price movement chart showed that 33 equities appreciated in price during the week, higher than 25 of the previous week, while 49 equities depreciated in price, lower than 60 equities of the previous week.
Glaxosmithkline Consumer Nigeria Plc led the price gainers with 21.4 per cent, trailed by Fidelity Bank Plc with 17.7 per cent. Diamond Bank Plc garnered 11.9 per cent, just as Zenith Bank Plc and Transnational Corporation of Nigeria chalked up 9.4 per cent and 8.2 per cent in that order.
Other top price gainers included: Eterna Plc (7.5 per cent); United Capital Plc ( 6.5 per cent); NASCON Allied Industries Plc 5.2 per cent); Northern Nigeria Flour Mills Plc (5.0 per cent) and C & I Leasing Plc (4.9 per cent).
Conversely, FTN Cocoa Processors Plc and Unity Kapital Assurance Plc led with 21.43 per cent respectively. Niger Insurance Plc trailed with 16.6 per cent, just as Multiverse Mining & Exploration Plc went down by 16.0 per cent.
Cadbury Nigeria Plc shed 14.9 per cent , while African Alliance Insurance Plc went down by 14.8 per cent.
Other top price gainers were: UNIC Diversified Holdings Plc (14.2 per cent); MCNichols Plc (14 per cent); Mutual Benefits Assurance Plc (13.6 per cent); Tantalisers Plc (13.6 per cent).
Despite COVID-19 Pension Assets Hit N11.4 Trillion
Total Pension Assets Expand to N11.35 Trillion
The National Pension Commission has revealed that the total pension assets rose to N11.35 trillion as of the end of August 2020 despite the COVID-19 pandemic that disrupted businesses and economic productivity.
According to the latest figures from the National Pension Commission, the commission assets expanded from N11.08 trillion in June 2020 to N11.3 trillion in July.
The report noted that 66.27 percent or N7.51 trillion of the funds had been invested in the Federal Government’s securities.
While some of the funds were also invested in domestic and foreign ordinary shares, corporate debt securities, local money market securities and mutual funds.
In the commission’s second quarter (Q2 2020) report, it said that following “the issuance of demand notices to some defaulting employers whose outstanding pension contribution liabilities had been established by recovery agents, 16 of the affected employers remitted N261.33 million during the period.
“PenCom said this represents a principal contribution of N152.79 million and penalty of N108.54 million during Q2 2020.”
In the commission’s Q2 2020 report, it said “the pension fund administrators (PFAs) 2,839 contributors under the micro pension plan, remitted a total of N7.4 million to the RSAs as pension contributions.”
Also in the same quarter, it said the PFAs recaptured 56,990 RSA holders and uploaded their data to the enhanced contributory registration system (ECRS).
PenCom further said the growth in the industry’s membership was driven by the RSA scheme, which had an increase of 41,147 contributors, representing 0.46 percent.
Airtel Grows Customer Base by 12 Percent to 116.4m in H1
Airtel Africa Increased Customer Base by 12 Percent to 116.4m in the First Quarter of 2021
Airtel Africa Plc, one of the leading telecommunications companies in Africa, grew customer base by 12 percent to 116.4 million in the first half of the year that ended September 30, 2020.
In the financial results signed by Simon O’Hara, Group Company Secretary, and released through the Nigerian Stock Exchange on Friday, the telecommunication giant reported a 10.7 percent increase in revenue to $1,815 million with second-quarter growth of 14.3 percent.
Similarly, revenue growth in constant currency was 16.4 percent in the first half of the year but 19.6 percent in the second quarter during the peak of COVID-19 locked down.
The report also showed growth was recorded across all regions with Nigeria rising by 20.2 percent. East Africa followed with 21.9 percent growth while Francophone Africa expanded by 4.4 percent.
Services with voice revenue grew by 7 percent with data and mobile money appreciating by 33.4 percent and 30.4 percent, respectively.
Airtel operating profit increased by 19.5 percent to $472 million, representing an increase of 28.3 percent in constant currency. The company’s free cash flow stood at $319 million, up from $210 million filed in the same period of last year.
Raghunath Mandava, chief executive officer, on the trading update: “The first half of our fiscal year included the peak impact of the COVID-19 pandemic in the countries where we operate, as lockdown measures were swiftly implemented to stem the initial spread of contagion. In these unprecedented times, the telecoms industry has emerged as a key and essential service for these economies, allowing customers to work remotely, reduce their travels, keep them connected and allow access to affordable entertainment. In these exceptional circumstances, in the first half, we delivered a strong set of results and as lockdown restrictions eased during Q2 our performance continued to improve with constant currency revenue growth of 19.6%, up 6.6% from the prior quarter.
“Importantly, the fundamentals of our business remain strong and revenue growth further benefitted from the execution of our strategy with a specific focus on expanding distribution in the rural areas, investing in our network and increasing 4G coverage, as well as benefitting from the fact we provide an essential service to consumers. In Q2, performance in our mobile money business also significantly improved with constant currency revenue growth of 33.9%, up 8% from prior quarter, as lockdown restrictions were eased and fees on certain transactions, which had been previously waived, were largely reintroduced. We also continued to enter new partnerships with leading institutions such as WorldRemit, MoneyGram, Standard Chartered Bank, and Mukuru to increase use cases and improve customers’ access to digital
payments and financial services.
We remain alert to the potential for further disruptionsfrom a second wave of COVID-19 across Africa, and the associated actions of governments to minimise contagion. Nevertheless, we are in a strong financial position to capture the opportunities in a fast-growing region that is vastly underpenetrated in terms of mobile and banking services. We remain confident of delivering long term sustained growth for our shareholders.”
Airtel’s full financial year starts from April of the current year and ends in March of the following year.
Total Currency in Circulation Increased by N56.44bn in September
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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