Jumia Gains 307 Percent in Three Months
Jumia stock has risen more than 300 percent in the last three months despite the COVID-19 pandemic and a general decline in household income in Nigeria, Africa’s largest economy.
Shares of Nigeria’s first e-commerce company rose from $4 per share on 18th of May, 2020 to $8.95 on July 21, 2020 before more than double that number this week to $16.28 per share after hitting $21 per share on Monday. The Jumia stock has risen by 307 percent since May 18th 2020.
While Jumia fundamentals have not changed in recent months, the forces propelling the stock were largely perception-based as retail investors were predicting that Nigerians and other Africans where the company operates shopped more on Jumia during the COVID-19 lockdown like Amazon, Alibaba and others experienced.
Therefore, retail investors started taking positions on the struggling e-commence company, popularly referred to as Amazon of Africa, ahead of its second-quarter earnings report due next week. They are betting that the company would have experienced a similar upsurge in sales to other global e-commerce companies during the lockdown.
This was after Massimiliano Spalazzi, CEO, Jumia Nigeria, stated that the company sales drop in April, at the beginning of the lockdown, but picked up in May and June with ease of lockdown.
Spalazzi said “We definitely had challenges due to the COVID-19 lockdown, currency devaluation and prices of goods increase in this market. However, with our contactless delivery initiatives, contactless payment via Jumia Pay and partnerships with several companies that produce consumer goods, we saw more new and old customers come on our platform to shop in safety.”
Accordingly, Tolulope George-Yanwah, country manager, Jumia services, said: “Our delivery partners increased year on year (YoY) by 73 percent, delivery associate community saw a 65 percent increase YoY and our pick up points and warehouses increased YoY by 109 percent with over 200 hubs. This shows that our delivery methods have significantly improved with higher volumes of purchases and deliveries made.”
Investors are already pricing in the expected surge in sales for the quarter, forgetting that the e-commerce company was only active in May and June when President Buhari eased the nation’s lockdown.
Also, Jumia is trading below its IPO price of $25.46 per share of April 12, 2019 and record high of $40.21 per share attained on April 26, 2019 when the company was aggressively pushed as Amazon of Africa before Citron Research released fraud statement that eventually plunged its value to $2.33 per share as early as March 20, 2020.
Other factors like disruption in global logistics and supply chain would like impacted Jumia’s potential during the period as most Nigerian vendors on the e-commerce site import goods to sell on the platform. Meaning, without those import goods, Jumia sales would be affected during the lockdown period.
Nigerian Stock Exchange to Benefit From Low Valuations – Experts
Stock Market to Benefit From Low Valuations – Experts
Investment experts have said the Nigerian Stock Exchange would benefit from low stock valuations despite the present mixed performance following sell pressure in banking stocks.
The experts hinged their analysis on the usual investors’ search for undervalued yields with strong fundamentals.
The NSE market capitalisation expanded by N14 billion last week but the All Share Index declined by 0.08 percent 25,572.57 basis points, highlighting the mixed performance of the Exchange amid growing economic uncertainties.
The analysts at Cordros Capital, in the review of the week performance, said the bourse could see a positive performance in the long run over compelling valuations while advising investors to exercise cautions when buying given current uncertainties.
They stated: “In the absence of a positive catalyst, and given the still uninspiring macro story, we guide investors to trade cautiously in the short term.
“However, we expect the market might benefit over the longer term on compelling valuations and as investors seek alpha-yielding opportunities in the face of negative real returns in the fixed income market.”
Experts at Afrinvest Securities, another Lagos-based investment banking company, said the new week would see investors taking profit, a situation they said could weigh on the Exchange and plunge stock value.
Stock Market Cap Appreciates by N14 Billion this week as NSE All-Share Index Dips
Stock Market Gained by N14 Billion this week Amid Economic Uncertainties
The market value of the Nigerian Stock Exchange expanded by N14 billion this week despite weak market sentiment amid growing economic uncertainties.
Investors traded a total turnover of 1.139 billion shares worth N12.692 billion in 17,109 deals during the week, against a total of 1.226 billion shares valued at N10.842 billion that exchanged hands in 19,529 deals in the previous week.
The sectoral performance showed the Financial Services industry led activity chart in terms of volume traded with 870.300 million shares valued at N7.863 billion traded in 9,427 deals, therefore, contributing 76.43 percent and 61.95 percent to the total equity turnover volume and value, respectively.
The Industrial Goods industry followed with 62.689 million shares worth N1.162 billion in 1,557 deals. The third place was the ICT industry, with a turnover of 50.859 million shares worth N2.552 billion in 619 deals.
Trading in the top three equities namely FBN Holdings Plc, Guaranty Trust Bank Plc and Access Bank Plc. (measured by volume) accounted for 353.048 million shares worth N4.018 billion in 3,095 deals, contributing 31.00% and 31.66% to the total equity turnover volume and value respectively.
A break down of the week activities showed investors traded 257,027,926 shares valued at N3,320,061,770 in 3,567 deals on Monday, September 14, 2020. While 245,139,497 shares worth N3,013,027,933 exchanged hands in 3,597 transactions on Tuesday of the same week.
Investors traded 211,816,446 shares valued at N2,417,710,834; 231,201,739 shares worth N2,095,227,478 and 193,495,274 shares valued at N1,845,658,982 in 3,651, 3,360 and 2,934 deals on Wednesday, Thursday and Friday, respectively.
The market capitalisation of listed equities appreciated by 0.10 percent or N14 billion from N13.351 trillion last week to N13.365 trillion this week.
While NSE All-Share Index depreciated by 0.08 percent or 19.38 basis points from 25,591.95bps last week to 25,572.57bps this week.
Weak Patronage Forces Prestige Assurance to Extend Offer Period for Rights Issue
Prestige Assurance Extends Offer Period for Rights Issue
Prestige Assurance has extended the offer period for the rights issue of 13,635,796,006 ordinary shares of 50 Kobo each at 50 Kobo per share on the basis of Thirty-Eight (38) new ordinary shares for Fifteen (15) ordinary
The company disclosed this in a statement signed by Godstime Iwenekhai Head, Listings Regulation, Prestige Assurance Plc and forwarded to the Nigerian Stock Exchange (NSE) on Friday.
The decision to extend the offer period may not be unconnected to the drop in patronage due to the negative impacts of COVID-19 on Nigerians and slow economic growth.
It said “Prestige Assurance Plc – Extension of Offer Period for the Rights Issue of 13,635,796,006 Ordinary Shares of 50 Kobo Each at 50 Kobo Per Share on the Basis of Thirty-Eight (38) New Ordinary Shares for Fifteen (15) Ordinary Shares Held.”
“Further to our Market Bulletin of 10 August 2020 with reference number: NSE/RD/LRD/MB39/20/08/10, Dealing Members are hereby informed of the extension of the offer period of Prestige Assurance Plc’s Rights Issue of 13,635,796,006 ordinary shares of N0.50 each at N0.50 per share on the basis of thirtyeight (38) new ordinary shares for every fifteen (15) ordinary shares held as at the close of business on 31 January 2020 (the Offer).
“The Nigerian Stock Exchange has received a confirmation from the Securities and Exchange Commission to extend the offer period by two (2) weeks. With this extension, the Offer which was initially scheduled to close on Thursday, 17 September 2020 will now close on Wednesday, 30 September 2020.”
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