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NSE Equities Capitalisation in Six-day Fall, Investors Dump Shares



Egypt Stocks
  • NSE Equities Capitalisation in Six-day Fall, Investors Dump Shares

The Nigerian Stock Exchange equities capitalisation, on Wednesday, continued its free fall for the sixth consecutive day, crashing by N69bn.

The NSE equities capitalisation dropped to N14.844tn from N14.913tn reported on Tuesday as sell offs in the local bourse persisted in the day’s trading session.

This, therefore, dragged the All-Share Index down to 41,495.43 from 41,686.36 basis points while the year-to-date gain contracted to 8.5 per cent. The negative performance was largely driven by sell pressures in Nestle Nigeria Plc, Stanbic IBTC Holdings Plc and Lafarge Africa Plc, which dropped by 2.2 per cent, 4.5 per cent and 6.6 per cent, respectively.

However, market activity improved as volume and value traded appreciated by 22.7 per cent and 44.4 per cent to 488.975 million units and N5.643bn, respectively.

The top-traded stocks by volume were African Alliance Insurance Plc (82.2 million), Japaul Oil & Maritime Services Plc (75.6 million) and Fidelity Bank Plc (63.9 million), while the top three traded stocks by value were Dangote Cement Plc (N1.1tn), Guaranty Trust Bank Plc (N886.6m) and Nigerian Breweries Plc (N867.7m).

Consequently, sector performance was largely bearish as three out of the five major NSE indices closed in the red, one closed positive while the other closed flat. The industrial goods index led losers, down by 2.5 per cent following price depreciation in Lafarge, which slumped by 6.6 per cent.

The insurance index trailed, falling by 1.9 per cent as AXA Mansard Insurance Plc and Unity Kapita Assurance Plc share depreciated, shedding 7.4 per cent and 7.7 per cent, accordingly.

The consumer goods index also dropped, shedding 0.7 per cent largely due to profit-taking in Nestle, Nigerian Breweries and PZ Cussons Nigeria Plc, which respectively slumped by 2.2 per cent, 0.9 per cent and 4.9 per cent.

However, the banking index appreciated by 0.1 per cent as investors took position in United Bank for Africa Plc, Zenith Bank Plc and GTBank, which respectively gained 4.1 per cent, 1.1 per cent and 0.3 per cent. The oil/gas index closed the day on a flat note.

Investor sentiment improved compared to Tuesday’s market performance as 18 stocks advanced against 33 that closed in the red. The best performing stocks were Fidelity Bank Plc, GlaxosmithKline Consumer Plc and Dangote Flour Plc, which appreciated by 7.8 per cent, five per cent and five per cent, accordingly while Cadbury Nigeria Plc, Unity Kapita Assurance Plc and AXA Mansard Insurance emerged as the worst-performing stocks, shedding 9.4 per cent, 9.4 per cent and 7.4 per cent, respectively.

Commenting on the state of the market, analysts at Afrinvest said in a note, “The sell offs experienced in the local bourse so far can largely be attributed to profit-taking in stocks that had rallied significantly before the beginning of the earnings season as well as contagion effect of the rout in equities across global markets.

“With investors sceptical of forward earnings vis-à-vis elevated valuations, sentiment has turned bearish in recent trading sessions. We believe declining level of valuation has presented investors with attractive entry opportunity; hence, we expect a reversal of the bearish trend in the near term.”

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.


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.

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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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