- Stock Market Records Decline in Investors’ Participation
The nation’s stock market saw a reduction in the participation of investors last week.
The market, which gained N36bn last week, compared to the N325bn loss of the previous week, saw a decline in market participation as volume and value of trade dropped by 31.42 per cent and 39.46 per cent, respectively.
The All Share Index advanced by 0.31 per cent to settle at 32,049.73 basis points, thereby pegging the year-to-date return at 1.57 per cent.
Market breadth settled lower at 0.65x as the market recorded 23 gainers and 37 losers.
In the course of the week, Guaranty Trust Bank Plc, Stanbic IBTC Holdings Plc, Nestlé Nigeria Plc and Seplat Petroleum Development Company Plc released their 2018 financial year results.
Analysts at Meristem Securities Limited said the activities were buoyed by the release of companies’ results, which showed positive performance and the attractive dividend payment proposed by the firms.
They said, “Also, with the presidential elections already held, the political uncertainty in the system moderated. Consequently, buying pressures prevailed as investors sought to take a position, owing to the low valuation of counters across the market.”
Analysts at Vetiva Capital Management Limited said the mixed trading in the equities market was driven by investor apathy, which prevailed from midweek to week close.
Interests in the banking sector drove positive activity last Monday, with the ASI rising by 95bps. Positive activity continued on Tuesday, but at a weaker level, as the market climbed 14bps higher.
However, by Wednesday, sentiment had turned tepid, with sell-offs in the industrial goods and oil and gas sectors dragging the ASI to a -16bps close.
Sentiment remained tepid on Thursday despite the financial result released by GTB, which showed a four-per cent increase in top-line year-on-year, a 10 per cent increase in profit after tax and a dividend yield of 7.3 per cent.
Investors’ reaction to this and other earnings releases was muted as the ASI shed 22bps. Sentiment failed to improve at week close, with the consumer goods sector dragging the bourse on Friday.
However, buoyed by positive closes at the start of the week, the ASI ended the week 31bps higher.
The banking sector reversed its bearish course as it gained 3.37 per cent, improving its year-to-date return to 6.94 per cent.
Wema Bank Plc led the gainers’ table, advancing by 11.69 per cent to close at 86 kobo, while Sterling Bank Plc led the losers.
The consumer goods sector continued its bearish streak as it lost 0.98 per cent, dragging the year-to-date return to -1.11 per cent.
After a four-week bullish run, bearish investor sentiment returned to the insurance sector as its index dipped by 1.30 per cent, dragging its year-to-date return to 3.53 per cent.
The industrial goods sector gained 0.93 per cent during the week, recovering from losses recorded in the previous week to settle the year-to-date return at 3.12 per cent.
The oil and gas sector sustained its downturn from last week, dipping by 2.56 per cent. Consequently, the year-to-date return dragged further to settle at -3.44 per cent.
While there were no gainers in the oil and gas sector last week, four losers emerged, led by Japaul Oil and Maritime Services Plc.
“Following a tepid week driven by investor apathy and barring any political unrest, we foresee tepid activity, with the possibility of bargain-hunting. We also expect further earning releases drive a bit of interest in the equity market,” analysts at Vetiva said.
DSS Arrests EFCC, Acting Chairman, Magu
DSS Arrested Magu, the Acting Chairman of EFCC
The Department of State Services (DSS) has arrested the acting chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, on allegation bordering on financial misappropriation, abuse of power and embesslement.
The Acting Chairman was accused of siphoning part of the money recovered from looters, a Punch reported stated.
The report stated “It was learnt that the security details to Magu put up a stiff resistance during the arrest of their principal, as they objected to the DSS move.
But he is now undergoing interrogation at the DSS Headquarters In Aso Drive.
This is happening barely two weeks after the Attorney-General of the Federation, Abubakar Malami (SAN) reportedly complained to the President, Major General Muhammadu Buhari (retd.) about Magu’s conduct and advised that he should be relieved of his appointment.
The AGF was said to have accused Magu of insubordination and discrepancies in the figures of funds recovered by the EFCC.
Again CBN Debits Banks N118 Billion for Failing to Meet CRR Target
CBN Debits Deposit Money Banks N118bn for Not Meeting CRR Target
The Central Bank of Nigeria (CBN) on Friday debited the nation’s deposit money banks a total sum of N118 billion for failing to meet 27.5 percent Cash Reserve Ratio (CRR) target.
This is the fourth of such action, bringing the total amount debited so far this year to N2.2 trillion.
According to Tunde Abidoye, an analyst at Lagos-based FBN Quest, the move brings “further downward pressure on banks liquidity ratios and earnings.”
“Based on the total sum that each bank has been debited this year, and our NIM assumptions for each bank, we estimate an aggregate opportunity cost of funds of N86bn for our universe of banks coverage,” Abidoye stated in a note to clients.
The central bank continues to debit banks to force them to loan more into the real sector and also reduce their forex purchasing power to better manage the nation’s weak foreign reserves and curb capital outflow. A series of recent reports have pointed to a possible foreign exchange devaluation to ease pressure on the nation’s reserves.
The report shows that the Stanbic IBTC and Guaranty Trust Bank were debited N15 billion each.
Debt Market: Dangote Cement Raises N250 Billion in H1, 2020
Dangote Cement Raises N250 Billion From Debt Market in H1 2020
Dangote Cement raised a total sum of N250 billion from the nation’s debt market in the first half of the year, according to the FMDQ Securities Exchange Limited.
In the statement published on the FMDQ website, the N250 billion debt includes the N100 billion Series 1 Bond raised under Dangote Cement’s N300 billion Bond Programme and the N150 billion Commercial Paper (Series 13-16 Domestic CP Issuance Programme) offered earlier in the year and now listed and quoted on FMDQ Securities.
Mr Michel Puchercos, the Chief Executive Officer, Dangote Cement, was quoted as saying, “This landmark transaction is the largest-ever bond issuance by a corporate issuer in Nigeria.
“It allows us to further broaden our sources of funding by accessing long-term debt at competitive costs from the capital market and builds further on the success of our domestic commercial paper programme.
“The success of these transactions, in the current challenging environment, illustrates investors’ continuous confidence in Dangote Cement’s strategy, strong cash generation and solid credit profile.”
Mr Kobby Bentsi-Enchill, the Executive Director and Head of Debt Capital Markets, Stanbic IBTC Capital Limited, said, “Stanbic IBTC Capital Limited has a long history of partnering with Dangote Cement Plc, and are delighted to have advised on this landmark corporate bond issuance, which reflects the depth and diversity of the Nigerian debt capital markets.”
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