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Index Appreciates by 1.25% as 20 Stocks Gain



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  • Index Appreciates by 1.25% as 20 Stocks Gain

The Nigerian equities market closed on a positive note on Monday as 20 stocks gained, boosting the Nigerian Stock Exchange All-Share Index by 1.25 per cent.

The NSE market capitalisation rose to N9.145tn from N9.032tn, as the NSE ASI closed at 26,580.22 basis points from 26,251.39 basis points recorded on Friday.

A total of 219.025 million shares valued at N1.407bn were traded in 3,423 deals.

The NSE ASI halted its losing streak to settle the year-to-date return at -1.10 per cent.

On the other hand, the volume and turnover of transactions pared by 0.56 per cent and 7.41 per cent, respectively, at the close of trading. Twenty stocks appreciated in value while 17 declined at the end of Monday’s trading activities.

On the gainers’ chart for the day were United Capital Plc, FCMB Group Plc, Fidelity Bank Plc, Sterling Bank Plc and African Prudential Registrars, which appreciated by 9.60 per cent, 9.40 per cent, 8.43 per cent, 7.14 per cent and 5.63 per cent, respectively.

However, the stocks of 7UP Bottling Company Plc, Ashaka Cement Plc, Cadbury Nigeria Plc, Capital Hotel Plc and the Nigerian Aviation Handling Company Plc fell by 4.95 per cent, 4.86 per cent and 4.78 per cent, respectively.

Market performance, as measured by the NSE indices, reflected the positive sentiments in the market as most sectors recorded gains. However, the food/beverage and oil/gas sectors declined by 0.27 per cent and 0.18 per cent, accordingly.

“We attribute this rebound to bullish activities on some stocks trading at low prices. We expect the rest of the week to be swayed by mixed investors’ sentiments, possibly skewed more towards bargain-hunting,” analysts at Meristem Securities Limited said in the firm’s daily post.

At the start of the week, the Central Bank of Nigeria conducted an Open Market Operation auction offering N30bn on the 150 day-to-maturity and 318DTM bills. The apex bank eventually sold N22bn and N201bn at respective stop rates of 18 per cent and 18.6 per cent (effective yields: 19.44 per cent and 22.20 per cent).

Despite this, the interbank call rate moderated by 41 basis points to 7.92 per cent. At the foreign exchange interbank market, the naira remained unchanged at N305 and N378 against the dollar for the spot rate and one-year forward rate respectively.

The fixed income market trend remained the same at week open as the bullish sentiment on Treasury bills contrasted with the bearish sentiment in the bond space. Treasury bill yields moderated by eight basis points on the average with the largest declines observed on the mid-dated maturities. Specifically, yields on the 122DTM, 234DTM and 241DTM bills moderated to 15.74 per cent, 18.79 per cent and 19.36 per cent, respectively. Meanwhile, yields on benchmark bonds rose 11 basis points on the  average amid advances across the entire space.

Notably, yields on the 8.50 per cent FGN November 2029 and 12.1493 per cent FGN July 2034 bonds climbed by 14 basis points and 16 basis points to close at 16.30 per cent and 16.02 per cent, respectively.

The Debt Management Office released its bond issuance calendar for Q1 2017, outlining an average monthly issuance of N130bn. “While we expect bullish trading to persist in the Treasury bills market amid healthy demand, we believe the higher volume on offer may further pressure bond yields higher in the days ahead,” analysts at vetiva Capital Management Limited said.

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.


Flour Mills Posts Strong Half Year Results Despite Headwinds



flour mills posts 184% increase in PAT

Flour Mills of Nigeria Plc recorded strong performance in the Half Year (H1) ended September 30, 2020.

In the 2020/21 half-year results released on Tuesday through the Nigerian Stock Exchange, the leading integrated food business and agro-allied Group, grew revenue by 31 percent year-on-year from N270.8 billion posted in the half-year of 2019/20 to N355.1 billion in the period under review with second-quarter growth of 47 percent when compared to last year second quarter.

Similarly, the Group’s profit before tax grew by 60 percent year-on-year from N8.6 billion in H1 2019/20 to N14.6 billion in H1 2020/21 with an impressive 160 percent growth from the second quarter.

The strong performance continues across the board as profit before tax was driven by the agro-allied segment, which realised a profit of N6.3 billion when compared to the loss posted in 2019/20 period. The company said it recorded strong improvement in edible oils and fats, protein and fertiliser businesses after its investments over the years started yielding results.

Profit after tax grew by 68 percent from N5.9 billion achieved in H1 2019/20 to N9.9 billion in the period under review.

According to the company, despite economic uncertainties and headwinds, the Group has continued to show sustained growth in key areas with the agro-allied unit leading with a strong result in edible oils and proteins.

Speaking on the performance, Paul Gbededo, the Managing Director and Chief Executive Officer (CEO) of the company, said “with this result, our business has once again shown its resilience, by following the path of sustainable growth despite the prevailing challenges in both the local and global economy.”

He further stated that “in line with our vision to continue to grow value for our investors, Management will for the remaining part of the financial year continue to concentrate on improving operational effectiveness through accelerated strategies for Group-wide cost optimisation, which will ensure sustainability in the current market climate, while we will continue to invest in growing the business further.”

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US Banks Led the Most Fined Financial Institutions in 2020



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US Banks Are The Most Penalised Financial Institutions in 2020 Financial Year

Banks in the United States were the most fined financial institutions in 2020, according to the latest report from Finbold.

Finbold, a company that specialises in financial data, said three countries accounted for 97.32 percent of the total fines levied on banks in 2020.

The data revealed that United States banks are the most fined at €9.15 billion. This was followed by Australian banks with a combined €770 million, while banks in Israel came third with €762.97 million.

Also, while the fines are likely to increase before the end of the year, the total fines levied against financial institutions globally stood at €11.61 billion as of October 22nd.

Further breakdown showed Swedish banks came fourth with €456.18 million fines while German banks that incurred a combined €169.01 million fines came fifth.

The report showed Goldman Sachs led the most fined bank with €5.26 billion for various violations of regulatory rules.

Wells Fargo came second with €2.53 billion while Westpac Bank in Australia and Hapoalim emerged third and fourth with €770 million and €762.97 million, respectively.

Other heavily fined lenders include Swedbank from Sweden fined €360 million and Germany’s Deutsche with €126.52 million fine in 2020 so far.

Speaking on banks’ fines, Oliver Scott, Chief Editor, Finbold, said “Notably, the tally of bank fines is likely to increase in the coming years as European and Asian regulators catch up with U.S peers who are considered more aggressive. However, banks are looking for means of minimizing fines. Analysts have been of the opinion that the fines could have been avoided if banks leverage technology through the deployment of perfect software.”

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Guinness Nigeria Explains Reason for N12.6 Billion Loss in 2020




Guinness Nigeria Speaks on 2020 Poor Performance

Guinness Nigeria Plc has blamed the challenging business environment amid COVID-19 restrictions that led to the closure of bars, clubs, lounges and restaurants for its 2020 losses.

Mr. Baker Magunda, Managing Director/CEO, Guinness Nigeria, who spoke on the company’s performance in 2020, said the aforementioned represents a major part of the company’s consumption, adding that restriction imposed on gathering impacted the usual demands for celebratory occasions.

He explained that demand was weighed upon by a decline in consumer income, rising unemployment rate due to the shutdown of large corporations, surged in VAT and excise throughout 2020.

According to him, distribution was affected by the ban imposed on inter-state travel despite collaborating with regulatory authorities to minimize the negative impact on the company.

Here is a breakdown of the Guinness Nigeria performance in 2020 Financial Year

Guinness profit plunged by a massive 129.1 percent to -N12.6 billion in the 2020 Financial Year (FY), down from the N5.5 billion profit achieved in 2019 (FY). While the company’s gross profit nosedive by 16.9 percent from N40.13 billion posted in 2019 to N33.33 billion in 2020.

The company decline was broad-based as revenue also declined from N131.5 billion filed in 2019 to N104.4 billion in the 2020 financial year.

Accordingly, administrative cost rose from N9.9 billion in the 2019 financial year to N14.3 billion in 2020. However, the cost of sales moderated by 22 percent from N91.4 billion posted in 2019 to N71.1 billion in 2020.

Finance cost expanded from N2.6 billion in 2019 to N4.5billion in 2020 while finance income declined to N301 million in the year under review, down from N750.9 million in 2019.

Mr. Baker Magunda, said “The last quarter performance of fiscal 2020 was significantly impacted by restrictions due to COVID-19, exacerbating the already challenging economic environment. Closures of on-trade premises (bars, lounges, clubs, and dine-in restaurants), which represents the major part of the consumption occasion for our products and bans on celebratory occasions, impacted sales.

“Demand was also impacted by reduced consumer income, unemployment concerns due to the shutdown of a large number of businesses, and increases of VAT and excise throughout the year.”

Speaking further Magunda said, “Distribution was impacted by the ban of inter-state, and in some cases intra-state travel. Although, Management worked diligently with regulatory authorities to minimize the impact, this hampered our distributors’ ability to restock and have our brands available for purchase.”

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