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Investors Invest N39bn in Equities on Positive Sentiments



Asian equities
  • Investors Invest N39bn in Equities on Positive Sentiments

Renewed investors’ confidence in equities boosted the value of trading by 79.7 per cent to N39.087 billion last week up from N21.740 billion the previous week. The amount was invested in 2.170 billion shares in 24,657 deals, compared with 2.018 billion shares exchanged in 25,496 deals the previous week.

The renewed demand for stocks also made the market to close the week on a positive note with the Nigerian Stock Exchange (NSE) All-Share Index rising by 0.72 per cent to be at 42,876.23. Similarly, market capitalisation rose by 0.82 per cent to close at N15.403 trillion. The growth is an improvement on the decline of 0.16 per cent recorded the previous week.

All other indices finished higher during the week with the exception of the NSE ASeM, NSE Banking and NSE Pension Indices that depreciated by 1.14 per cent , 0.59 per cent and 0.09 per cent in that order.

Commenting on the week-on-week performance, analysts at FSDH Merchant Bank said the market recorded a marginal increase to close positive.

“Activity level was positive in volume and value terms while market breath closed negative. Bargain hunting is likely to be sustained in coming sessions as market outlook remains positive in the immediate term,” they said.

Daily Performance

The market began the week with high hopes as it recorded a growth. The NSE Index rose marginally by 0.02 per cent to close at 42,579.48, lifted by the appreciation recorded in the share prices of GTBank, Zenith Bank, UAC of Nigeria Plc, PZ Cussons, and FCMB Group Plc among others.

Commenting on the market, analysts said it traded sideways in today’s session but recorded a marginal gain.

“The market sentiments to the corporate earnings of Total Nigeria, African Prudential and United Capital released today were negative as the stocks experienced sell pressure and closed on offer. Market activity will likely increase in coming sessions with anticipation of corporate earnings of banks,” they said.

In terms of sectoral performance on the first day of the week, three indices advanced while two declined. The NSE Consumer Goods Index led gainers, up 0.8 per cent, trailed by the NSE Insurance Index rose by 0.5 per cent. The NSE Banking Index appreciated by 0.3 per cent.

On the flipside, the NSE Oil & Gas Index shed 2.5 per cent, while the NSE Industrial Goods Index went down by 0.2 per cent.

The market fell on Tuesday due to sell pressure amidst weakening investors’ sentiment. Consequently, the NSE ASI depreciated by 0.66 per cent to close at 42,299.56. The depreciation recorded in the share prices of International Breweries, Zenith Bank, Dangote Cement, Seplat, and Lafarge Africa were mainly responsible for the decline recorded in the index.

“Market performance across sectors was mostly bearish. The 2017 earnings release is expected to improve market activity and investors’ sentiment in coming sessions,” operators said.

Despite the bearish trend, there was increased activity in the market as volume traded inched 14 per cent higher to 438.7 million units while value traded advanced 60.8 per cent to N8.8 billion.

The market rebounded on Wednesday as the NSE ASI jumped by 2.44 per cent to close at 43,330.54. The appreciation recorded in the share prices of Unilever, Nigerian Breweries, Dangote Cement, Stanbic IBTC, and Lafarge Africa were mainly responsible for the gain recorded in the index.

“Market activity and investor sentiments strengthened today. The positive performance of the market was mainly driven by bargain hunting presented by the temporary decline in the prices of some stocks. This trend is likely to be sustained in coming sessions as investors continue to hunt for bargains in perceived undervalued stocks,” according to the analysts.

The NSE Industrial Goods Index led the gainers chart with 4.1 per cent, trailed by the NSE Consumer Goods Index that rose by 2.4 per cent. The NSE Banking Index and NSE Oil & Gas Index also trended northwards, up 0.8 per cent and 0.2 per cent respectively.

But the bullish trend could not be sustained on Thursday as the NSE ASI fell by 1.1 per cent to close at 42,843.38. Profit taking in Dangote Cement Plc (-1.8 per cent), Nigerian Breweries (-3.6 per cent) and GTBank (-2.0 per cent) weighed heavily on the performance. As a result, investors lost N174.8 billion in value as market capitalisation fell to N15.4 trillion. Similarly, activity level declined as volume and value traded fell 35 per cent and 54.9 per cent to 371.2 million units and N4.9 billion respectively.

Performance was mixed across sectors as three indices declined while two advanced. The NSE Oil & Gas Index led gainers, rising 1.0 per cent. The NSE Insurance Index trailed, rising by up 0.1 per cent. On the negative side, the NSE Industrial Goods Index declined 2.2 per cent as investors took profit in Dangote Cement ANGCEM (-1.8 per cent) and Lafarge Africa Plc (-3.5 per cent). The NSE Banking Index fell 1.1 per cent while the NSE Consumer Goods Index depreciated by 0.7 per cent.

The market closed the last day on a positive note, appreciating by 0.08 per cent, bringing the week-on-week gain to 0.72 per cent.

Market Turnover

A further analysis of the activity chart showed that the Financial Services Industry led with 1.534 billion shares valued at N17.670 billion traded in 15,208 deals, thus contributing 70.69 per cent and 45.21 per cent to the total equity turnover volume and value respectively. It was followed by the Industrial Goods Industry, which recorded 200.405 million shares worth N6.436 billion in 1,097 deals. The third place was occupied by Conglomerates Industry with a turnover of 188.097 million shares worth N489.453 million in 998 deals.

Trading in the top three equities namely – FCMB Group Plc, Transnational Corporation of Nigeria Plc and Cement Company of Northern Nigeria Plc, accounted for 617.511 million shares worth N4.086 billion in 2,090 deals.

Also traded during the week were a total of 50,547 units of Exchange Traded Products (ETPs) valued at N4.593 million executed in 12 deals, compared with a total of 111,794 units valued at N1.806 million that was transacted in 10 deals two weeks ago..

A total of 6,574 units of Federal Government Bonds valued at N6.332 million were traded last week in 31 deals, compared with a total of 9,963 units valued at N10.057 million transacted the previous week in 21 deals.

Price Gainers and Losers

Meanwhile, 38 equities appreciated in price during the week under review, higher than 23 of the previous week, while 45 equities depreciated in price, lower than 54 equities of the previous week.

Japual Oil & Maritime Services Plc led the price gainers with 50 per cent, trailed by Unity Bank Plc with 18.7 per cent. N.E.M Insurance Plc chalked up 18.4 per cent, just as Cement Company of Northern Nigeria Plc gained 17.8 per cent. Consolidated Hallmark Insurance Plc and NASCON Allied Industries Plc garnered 16 per cent and 25.8 per cent respectively.

Other top price gainers included: First Aluminium Nigeria Plc (15.3 per cent); Cutix Plc (11.3 per cent); Conoil Plc (9.8 per cent) and Continental Reinsurance Plc (9.2 per cent).

Conversely, Sovereign Trust Insurance Plc led the price losers with 20.8 per cent, trailed by UNIC Diversified Holdings Plc that shed 18.5 per cent. Multiverse Mining and Exploration Plc went down by 17.6 per cent, just as FTN Cocoa Processors Plc and African Alliance Insurance Plc lost 15.9 per cent and 14.2 per cent in that order.

Other top price gainers were: DN Tyre & Rubber Plc (13.6 per cent); Diamond Bank Plc (12.1 per cent); Royal Exchange Plc (11.4 per cent); Courtville Business Solutions Plc (9.3 per cent) and Standard Alliance Insurance Plc (8.3 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.


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



Central Bank

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



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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