Investors in the nation’s stock market have started taking profits from equities ahead of the presidential elections.
The market capitalisation of equities listed on the floor of the Nigerian Stock Exchange shed N18bn on Wednesday, dropping to N12.087tn from the N12.105tn recorded on Tuesday, while the All Share Index declined by 0.15 per cent to close at 32,413.92 basis points.
Analysts at Afrinvest Securities Limited said major profit-taking was witnessed in bellwethers – Guaranty Trust Bank Plc, Access Bank Plc and Seplat Petroleum Development Company Plc.
Activity level declined as volume and value traded declined by 19 per cent and 47.2 per cent to N4.241bn and 470.399 million, respectively.
The top traded stocks by volume were Diamond Bank Plc (131 million units), Zenith Bank (44.1 million units) and United Bank for Africa Plc (40.6 million units), while Zenith Bank (N1.1bn), Dangote Cement Plc (N6m), GTB (N5m) led by value.
Analysts at AllianceBernstein LP and Citigroup Incorporated had earlier told Bloomberg that the recent rally in Nigerian assets might pick up steam if there was a change in government after the presidential election this weekend.
They said foreign investors had not warmed to Nigeria despite rising prices for oil or the United States Federal Reserve’s dovish tilt, which fuelled the demand for riskier assets.
A Manager at Duet Asset Management Limited, Ayodele Salami, was quoted by Bloomberg as saying, “If the elections pass smoothly, we should see a rally regardless of who wins.
“But an Atiku victory can mean even more of a leg-up to the relief rally. That would be on the expectation that there will be a reform agenda. His campaign has been very much focused on pro-market policies.”
Bloomberg reported that the nation’s stocks had been the world’s worst performers in dollar terms, losing almost half their value under the President Muhammadu Buhari regime.
Sector performance was mixed on Wednesday as only two out of five indices advanced.
The industrial and consumer goods indices were the only gainers, appreciating by 1.6 per cent and 0.9 per cent, respectively.
On the flip side, the oil and gas index shed gains recorded in previous trading sessions, declining by 2.2 per cent as investors took profit in Seplat and Oando Plc.
The banking and insurance indices trailed, down by 1.8 per cent and 0.7 per cent, as major losses were recorded in GTB, Access Bank, Custodian Investment Plc and NEM Insurance Plc.
The top-performing stocks for the day were Berger Paints Plc, Unilever Nigeria Plc, Unity Bank Plc, Livestock Feeds Plc and Jaiz Bank Plc, whose share prices gained 10 per cent, 10 per cent, 9.47 per cent, 9.09 per cent and 9.09 per cent, respectively.
The top five losers were C & I Leasing Plc, Champion Breweries Plc, P Z Cussons Plc, United Capital Plc and Chi Plc, which saw their respective share prices shed 9.95 per cent, 9.55 per cent, 9.43 per cent, 9.09 per cent and 7.14 per cent.
The Nigerian equities market has recorded a year-to-date (YTD) growth of 3.3 per cent following sustained bullish trading as investors took advantage of attractive prices of stocks. The market, which suffered a decline in 2018, recorded further losses in the month of January due apprehensions by investors over political uncertainties around the general elections in the country.
However, following the oversold positions of most stocks and their attractive valuations, some investors have been ignoring the political risks and increased their demand for stocks since last week. This renewed demand has been sustained, making the Nigerian Stock Exchange (NSE) All-Share Index to appreciate by 2.1 per cent to close at 32,462.30 yesterday, while market capitalisation added N253.7 billion to be at N12.1 trillion. Consequently, the market YTD performance has hit 3.3 per cent.
The market was highly bullish as 38 stocks appreciated compared with 14 that depreciated. Dangote Flour Mills Plc, Livestock Feeds Plc, NPF Microfinance Bank Plc and Jaiz Bank Plc led the price gainers with 10 per cent apiece. They were followed by Champion Breweries Plc with 9.8 per cent, while Union Bank of Nigeria Plc and Wema Bank Plc garnered 9.6 per cent and 9.2 per cent respectively.
Other top price gainers included: Transcorp Plc (8.9 per cent); Neimeth International Pharmaceuticals Plc (8.7 per cent); Royal Exchange Plc (7.6 per cent); Union Diagnostics and Clinical Services Plc ( 7.4 per cent); Oando Plc (7.2 per cent); Seplat (6.1 per cent), Nestle Nigeria Plc and Flour Mills of Nigeria Plc (6.0 per cent apiece.
Flour Mills of Nigeria Plc is currently raising N6 billion in the sixth series of its N100 billion Commercial Paper(CP) programme in a bid to support its short-term funding needs. The tenor is for 180 days while the effective yield is 14.7 per cent. The offer, which opened last Thursday, will close today.
Meanwhile, Regency Alliance Insurance Plc led the price losers with 8.0 per cent, trailed by UAC Property Development Company Plc with 7.8 per cent, while Unity Bank Plc and AIICO Insurance Plc shed 5.9 per cent and 5.1 per cent respectively.
Activity level also improved as volume and value traded for the day increased by 5.5 per cent and 42.2 per cent to 580.4 million units and N8.0 billion respectively. The most traded stocks by volume were Diamond Bank (125.8 million shares ), Zenith Bank (63.2 million shares) and Guaranty Trust Bank (57.1 million share) while for the most traded stocks by value, GTBank (N2.2 billion), Zenith Bank (N1.6 billion) and Dangote Cement (N1.5 billion) were the top stocks.
The Lagos Commodity and Futures Exchange says it has received the Securities and Exchange Commission’s approval-in principle to commence operations.
The exchange, which is being promoted by the Lagos State Government and the Association of Stockbroking Companies of Nigeria, said in a statement on Saturday that it might commence operations soon.
It said it was expected to commence operations after the ongoing installation of its state-of-the-art technology, which it said was at the concluding phase.
The acting Managing Director/Chief Executive Officer, Mr Akin Akeredolu-Ale, described the approval as a welcome development.
According to him, it shows the level of dynamic capacity of the apex regulator to empower capital market operators to play a pivotal role in capital formation and wealth creation.
Akeredolu-Ale stressed the need for capacity building in order to improve efficiency and service delivery.
He explained that the trading floor of the new corporate office of LCFE was already wearing a new look as trading technologies, including control room and servers, were being installed.
He said, “There are strong indications that capital market professionals, including capital market correspondents, will undergo a new phase of strategic training model by the LCFE as part of the preparations.”
The Chairman, ASHON, Chief Patrick Ezeagu, while commenting on the development, expressed gratitude to SEC for the opportunity.
He noted that ASHON had been working very hard to complete the installation of the technology in order to commence trading, adding that the core objective was to develop the much-needed capacity that would operate in the exchange.
Ezeagu stated that every aspect of the capital market had been undergoing changes and that there was a need for the human capital that would operate in the new environment to possess the needed skills.
He said, “The market is expanding and the various kinds of markets we are operating are equally changing as well. From the purely equities market, we are moving into bonds and from bonds, we are thinking about commodities and derivatives.
“There is lack of capacity by members of ASHON and we have decided that the best approach is to build capacity from within. We must key into these changes that are taking place to play our role as intermediaries within the market space.”
Sustained bargain hunting in bellwethers lifted the Nigerian Stock Exchange (NSE) All-Share Index by 0.16 per cent to close at 30,821.80 yesterday.
In a similar vein, market capitalisation added N18 billion to close at N11.49 trillion. With the yesterday’s positive performance, the market has thus recorded three days of gains since Monday.
According to analysts at FSDH Research, the appreciation recorded in the share prices of Nestlé Nigeria Plc, Flour Mills of Nigeria Plc, Transcorp, GTBank Plc and Dangote Sugar Refinery Plc were mainly responsible for the gain recorded in the index yesterday.
However, Learn Africa Plc led the price gainers with 9.4 per cent, trailed by Regency Alliance Insurance Plc with 9.0 per cent. Mcnichols Plc garnered 7.6 per cent, just as Berger Paints Nigeria Plc, Cornerstone Insurance Plc and Sovereign Trust Insurance Plc chalked up 5.0 per cent apiece. Dangote Flour Mills Plc and Nestle Nigeria Plc went up by 4.9 per cent and 2.8 per cent in that order.
Conversely, Custodian Investment Plc led the price losers with 8.8 per cent, followed by Guinea Insurance Plc with 8.7 per cent. Consolidated Hallmark Insurance Plc shed 6.4 per cent. The insurance firm got its additional 1.130 billion shares listed on the NSE on Tuesday. The arose from additional shares listed on the exchange arose from CHI Plc’s placing of 1,130 billion ordinary shares of 50 kobo each at 65 kobo per share. With this listing of the additional 1,130 billion ordinary shares, the total issued and fully paid up shares of CHI Plc has now increased from 7.0 billion to 8.130 billion ordinary shares of 50 kobo each. CHI Plc realized N734 million from the private placing.
Meanwhile, activity level also improved as volume and value traded rose 88.3 per cent and 65.0 per cent to 358.3 million shares and N4.8 billion respectively. The top traded stocks by volume were FBN Holdings (88.6 million shares), Zenith Bank (55.7 million shares) and Japaul (36.2 million shares) while Zenith Bank (N1.3 billion), GTBank (N724.5 million) and FBN Holding (N660 million) were the top traded by value.
In terms of sector performance three of five sectors tracked advanced. The NSE Consumer Goods Index led gainers with 1.2 per cent, trailed by the NSE Banking Index with 0.6 per cent appreciation. The NSE Insurance Index rose 0.5 per cent. Conversely,
the NSE Industrial Goods Index shed 0.6 per cent, while the NSE Oil & Gas Index depreciated by 0.1 per cent.
Gains recorded by Stanbic IBTC Holdings Plc, FBN Holdings Plc, Access Bank Plc, GTBank Plc and Beta Glass Plc helped to sustained the positive performance of the stock market yesterday. After declining the previous week due to profit taking, the market opened the week on positive note on Monday, rising by 0.35 per cent.
The bullish performance was sustained yesterday as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) appreciated by 0.09 per cent to close at 30,773.57, while market capitalisation added N11 billion to close at N11.5 trillion.
In all, 21 stocks appreciated yesterday while 12 depreciated. Beta Glass Plc led the price gainers’ table with 10 per cent , trailed by ABC Transport Plc with 8.3 per cent. Consolidated Hallmark Insurance Plc chalked up 6.9 per cent as investors reacted to news of the company successfully injecting fresh capital of N734.5 million through a private placement of 1.130 billion ordinary shares of 50 kobo each at 65 kobo per share.
Sunu Assurances Plc garnered 5.0 per cent, while Regency Alliance Insurance Plc, United Capital Plc, AIICO Insurance Plc and Oando Plc gained 4.7 per cent, 3.1 per cent, 3.1 per cent, and 3.0 per cent in that order.
Conversely, A.G Leventis Nigeria Plc led the price losers with 6.9 per cent, trailed by Nigerian Aviation Handling Company Plc with 3.7 per cent. The Managing Director of NAHCO, Mrs. Olatokunbo Fagbemi, last week at the NSE assured stakeholders that the firm would sustain its positive performance, deliver better services and higher returns to shareholders going forward.
“My top priority is very simple, it is to get everything right because when we get everything right for the customer and we deliver the right kind of service, then we get the right kind of income that can trickle down to profit and it is from the profit that we are going to be able to pay the right kind of dividend,” Fagbemi said.
She said going forward, the company would enhance its processes to create an enviable place to work in and ensure it operates in line with international standards.
“A lot of work has been done in the past, what I will do is build on what is there, the areas where there are gaps, my priority will be to close those gaps and ensure that we deliver services in a safe and secured manner,” Fagbemi said.
Flour Mills of Nigeria (FMN) Plc has reported a profit after tax of N7.895 billion for the nine months ended December 31, 2018, down from N13.247 billion recorded in corresponding period of the previous year. The profit was recorded from a revenue of N400.6 billion compared with N427.508 billion in 2017.According to the company, The drop in revenue is disappointedly related to the logistic upheavals posed by the traffic challenges in Apapa.
An analysis of the results showed that selling and distribution expenses rose from N4.037 billion to N5.933 billion as the company continued to suffer from the negative impact of the traffic gridlock on the Apapa roads, the operating base of the company. Also, administrative expenses increased from N13.311 billion to N14.937 billion.
However, company’s finance cost of reduced by 34 per cent to N16.5 billion, from N25.2 billion of the same period last year. The company said the reduction is due to settlement of overdraft facilities and replacement of high interest yielding loans with more favorable loans.
FMN had last year raised Rights Issue of N40 billion to strengthen its capital base by deleveraging its balance sheet, supporting its working capital needs and positioning its to exploit value-accretive opportunities.
Commenting on the result, the Group Managing Director, FMN, Paul Gbededo, said:“The results are largely a reflection of our focus on driving volume growth while improving operational efficiency and ramping up strategic marketing and promotional activities to win over new market segments in our food business. Despite the devastating effect of the traffic congestions in Apapa on our operations, we are quite positive that we will see improvements across major business segments before the close of the financial year as we continue to focus on delivering on our promise of quality to our consumers.”
The company noted that continued strong sales and brand building focus has ensured a further growth in market share and strengthened the group’s market leader position within the flour market.
The Group has announced its intent to carve out its fertilizer business from Flour Mills of Nigeria Plc and registered same as an independent company to hold its Agro-allied businesses. This is expected to position this business segment for further growth and ensure optimal financial structures for the related businesses. The holding company will be fully owned by Flour Mills of Nigeria Plc. The arrangement is however subject to the approval of the Securities and Exchange Commission.
Guinness Nigeria Plc, one of the leading beverage and alcohol companies in Nigeria and a subsidiary of Diageo Plc, yesterday announced its unaudited results for its first half year period ended 31st December 2018.
The results which were released on the floor of the Nigerian Stock Exchange (NSE), showed that profit before tax increased to N3.8 billion, driven by lower finance charges, as a result of the rights issue, which more than offset operating profit decline in a challenging operating environment.
The results showed that Guinness Nigeria’s net sales declined four per cent in the period under review.
This, according to the brewer was primarily driven by the ongoing pressure in the lager segment as a result of the continued challenging operating environment.
It revealed that double digit growth in spirits and continued growth in Guinness mitigated some of the decline in the period. Also, the company’s gross profit declined 15 per cent as a result of net sales decline, as well as continued inflationary pressure on our raw material costs and lower fixed cost absorption.
Its marketing spend decreased 10 per cent as it continued to focus our investment behind the biggest growth opportunities, while its operating profit declined N2 billion as the productivity initiatives around marketing spend, distribution expenses and administrative expenses mitigated some of its inflationary cost of sales pressure.
Commenting on the results, Managing Director/CEO, Guinness Nigeria, Mr. Baker Magunda said: “In the half year ended 31st December 2018, Guinness Nigeria delivered results that reflected the continued challenges in the operating environment. While lager remains a challenged sector, Guinness and spirits recorded strong growth, and our non-alcoholic malt drinks grew in the face of intense competitive pressure.
“This re-affirms our total beverage alcohol portfolio strategy as a key driver of sustainable growth in the market. Looking forward, we will continue to focus on our strategy which is now based on four strategic pillars of growing our premium core faster, delivering our target cost absorption, continue innovating to meet consumer needs and driving productivity harder to improve performance in the business.
“Whilst we are conscious of the continued challenging operating environment with double digits inflation and pressured consumer spending, we remain optimistic about the execution of our strategy for the remainder of the 2019 financial year”.
On his part, Chairman of the Board of Guinness Nigeria, Mr. Babatunde Savage said: “The board is confident that our strategy is sound, and we are making the right investments in the company to ensure long term competitiveness.”
He further stated that “the board continues to support the management in its efforts to build a business that aims to consistently deliver growth for stakeholders.”
