The Nigerian Stock Exchange All-Share Index turned slightly positive in Wednesday’s session, halting a three-day loss as most key sectors closed positive.
The NSE ASI rose by 0.08 per cent as 20 stocks appreciated amid 17 losers.
A total of 159.989 million shares worth N1.741bn exchanged hands in 2,396 deals.
The NSE market capitalisation rose to N9.315tn from N9.307tn, while the ASI closed at 27,120.39 basis points from 27,098.52 basis points.
The consumer goods sector added the most points to the ASI following gains in Unilever Nigeria Plc by 4.6 per cent, Nigerian Breweries Plc by 0.34 per cent and Dangote Sugar Refinery Plc by 4.5 per cent.
The financial services sector inched 0.14 per cent higher amid advances in United Bank of Africa Plc by 1.67 per cent, Diamond Bank Plc by 2.73 per cent and Union Bank of Nigeria Plc by 0.44 per cent.
However, the industrial sector stocks closed flat, while the oil and gas sector dropped by o.65 per cent owing to a slide in Forte Oil Plc by 2.99 per cent.
Global markets traded mostly lower amidst a raft of disappointing earnings. Notably, Apple Incorporated posted its first full year revenue decline since 2001.
On what would shape the next trading session, analysts at Vetiva Capital Management Plc said, “We highlight that a couple of earnings of key stocks were released after the session close, and believe the market will open to investor reaction to these results in the session ahead.”
Meanwhile, the Central Bank of Nigeria held an Open Market Operation auction for a third successive day, selling N4.8bn and N49bn on the 183-day and 358-day bills (N30bn on offer for each) at respective stop rates of 18 per cent and 18.5 per cent (effective yields: 19.78 per cent and 22.60 per cent).
Despite this, the interbank call rate moderated a marginal 17 basis point to 10.50 per cent. At the foreign exchange interbank market, the naira depreciated N1.78 against the dollar to settle at N306.78 at the spot market whilst the one year forward rate remained unchanged at N348.14.
Bearish sentiment persisted in the Treasury bills space as yields climbed 22 basis points on average. Sell pressure was concentrated on the short-mid dated maturities with yields on the 22 day-to-maturity, 113DTM, and 148DTM bills rising to 16.12 per cent, 18.64 per cent, and 18.64 per cent, respectively.
The bond market also traded mildly bearish, with yields on benchmark bonds up two basis points on average. The largest advances were recorded on the 15.54 per cent FGN February 2020 and 14.20 per cent FGN March 2024 bonds, which rose four basis points each to settle at 14.99 per cent and 15 per cent, respectively.
The naira fell to N460 to the dollar on the parallel market wednesday, compared with the N455 to the dollar the previous day, due to reduced dollar supply in the market.
But on the interbank FX market, the spot rate of the naira closed at N306.78 to the dollar yesterday, supported by central bank interventions.
The naira had been relatively stable on the black market after the bank asked international money transfer firms to sell dollars directly to bureau de change operators to boost liquidity and narrow the gulf with the official market.
The directive was initially effective, traders said, but its impact has been limited due to few dollars coming into Nigeria.
“What we get from Travelex is not sufficient,” one trader told Reuters, referring to demand in the market.
International money transfer firm, Travelex, sells around $15,000 to 1,000 retail currency outlets weekly, but the amount is a fraction of what is required to cover demand from individuals and small businesses.
Dollar shortages have caused many firms to halt operations and lay off workers, compounding an economic crisis exacerbated by the fall in global prices for oil, which accounts for 70 percent of Nigeria’s budget revenue.
The central bank has struggled to support the local currency as its dollar reserves have continued to fall.
The Minister of State for Budget and National Planning, Zaynab Ahmed, on Wednesday said the Federal Government had so far released about 50 per cent of the capital expenditure component of this year’s budget.
She disclosed this while answering questions at a press briefing held at the end of a meeting of the Federal Executive Council presided over by President Muhammadu Buhari.
She was joined at the briefing by the Minister of Information and Culture, Alhaji Lai Mohammed; and Minister of Power, Works and Housing, Mr. Babatunde Fashola.
Ahmed said, “On the borrowing plan that Mr. President has sent to the National Assembly for 2016; indeed, included in the borrowing plan is the amount that is required for both local and foreign borrowing to fund the 2016 budget deficit.
“The budget implementation itself is on course. The 2016 budget is fully performed to date in terms of personnel; that is to say, we are not owing any salaries at the federal level. Operational expenditure has been disbursed for eight months and the ninth month is just being processed. Capital expenditure has been disbursed to the tune of nearly 50 per cent.
“About N720bn has been released from the MDAs’ budget of N1.4tn as of the end of September.”
Ahmed said the preparation of the 2017 budget was at an advanced stage.
She explained that the Economic Management Team had reviewed it extensively, while the next step was for the document to be taken to the Federal Executive Council for approval, after which it would be sent to the National Assembly.
The minister said the council was also presented with a progress report on the implementation of the government’s social investment programme.
She said there was already an approval from the steering committee in the sum of N150bn, adding that N25bn had been released into the account, while another N40bn was in the process of being released into the account.
Ahmed added that the Homegrown School Feeding Programme arm of the scheme had commenced in Kaduna State, noting that the Federal Government would handle Primary 1-3, while the states would be responsible for Primary 4-6.
She explained, “There is no spending yet on the national social investment programme. We are just kicking off; some funds will be released to the Bank of Industry this week for the EIP programme and for the school feeding programme, it is only after the cooks have performed that they will get their first payment.
“For the job creation programme, it is when the graduates have resumed and have worked for the first month that money will be released to them.”
Fashola, on his part, said the council approved the completion of the 215 megawatts Kaduna power plant, which began in 2009.
He said the project, which was initially meant to be completed in 2012, would now be completed in 2017.
The second project approved by the council, according to Fashola, is the construction of a substation to evacuate 40MW of power from the first phase of the Gurara hydroelectric power plant to connect to Kaduna and to enable it to interconnect to the Mamdo transmission substation, thus strengthening the transmission grid.
The minister stated, “What these two approvals will do is to complete ongoing projects, which is a commitment of this administration, and create work because contractors will return to site, and increase our power by 215MW.
“From Kaduna, we will get 40MW extra into the grid from the Gurara phase one, and we are expanding the transmission (network) across the country.”
The Federal Government will soon float a Diaspora bond to tap into the resources of Nigerians living abroad as one of the measures to overcome recession, the Senior Special Assistant to the President on Diaspora and Foreign Affairs, Mrs. Abike Dabiri-Erewa, has said.
Dabiri-Erewa said this on Tuesday when she visited the Minister of Information and Culture, Alhaji Lai Mohammed, to seek for a working relationship with the ministry.
She said looking to the Diaspora to overcome recession was not without precedent as Ireland also sought remittances from its citizens abroad when it was hit by recession.
Dabiri-Erewa expressed confidence that with about $21bn being remitted to the country annually, Nigerians abroad were capable of pulling the country out of recession if they were adequately informed and engaged by the government.
She said the plan to float a Diaspora bond would enable Nigerians citizens living abroad to invest in infrastructure development and also to explore the opportunity of making profit on their investments.
While stressing the need for an accurate database of Nigerians abroad, she said a Diaspora policy would soon be put in place to define and facilitate the engagement with them and harness the intellects of Nigerians in various fields in the Diaspora to contribute positively to nation building.
Dabiri-Erewa said, “We are coming up with a programme called PRIDE, that is, the Presidential Initiative for Diaspora Excellence. We will bring it down to various fields; we are working on medicine and agriculture.
“So, we are getting Nigerians in the Diaspora in those fields who are going to come together and make sure they contribute positively to the progress and development of Nigeria.”
Responding, Mohammed said his ministry would soon launch an information portal to keep Nigerians at home and in the Diaspora abreast of the government’s programmes and policies, and also get their feedback.
He also disclosed that the ministry would also extend its town hall meetings to Nigerians living in some countries and cities with large Nigerian population.
Africa’s biggest mobile network, MTN Group, shrugged off its Nigeria’s woes yesterday and strengthened 5.34 per cent to close at R115.37 after the Central Bank of Nigeria (CBN) instructed the country’s banks to suspend any remittance of MTN dividends until further notice.
The Nigerian bourse stance comes as authorities accused the company of illegally repatriating $14 billion (R195 billion) from the country over 10 years.
MTN Nigeria said yesterday that it remained committed to the payment of the N330 billion (about R14 billion) fine related to the late disconnection of “improperly registered” SIM cards. The company has not declared a dividend since April and MTN Nigeria has no intention to make any dividend payments over the next six months.
The Nigerian unit continued to refute the allegation that it had improperly repatriated funds from Nigeria, with MTN Nigeria Chief Executive, Ferdi Moolman, saying: “The allegations made against MTN Nigeria are completely unfounded and without any merit.”
But in its quarterly figures for September, the company beat market expectations after it reported stronger data revenue and improved subscriber numbers yesterday. Analysts said the deepening woes in Nigeria had not harmed the company and its performance much.
The telecoms giant’s shares strengthened more than five percent to trade on the JSE yesterday as it also said it would fast-track the starting date of its new Chief Executive, Rob Schuter, who was expected to join the company in March.
MTN’s Group Executive Chairman, Phuthuma Nhleko, said the September results were testimony that MTN’s transformation project, which initially focused on its key markets Nigeria and South Africa, with hard targets set for the next 12, 18 and 24 months, would pay off.
“Operations are expected to deliver the first results on clearly defined targets in the first half of 2017,” Nhleko said.
Nhleko, according to the South African-based Independent Newspaper, also said despite a difficult environment due to weaker macro-economic conditions, particularly in oil-dependent economies, and the regulatory challenges experienced, the group would benefit from the fundamental changes implemented.
Following the hefty Nigerian fine, the company appointed senior managers, including Felleng Sekha who joined the group as executive for regulatory affairs and public this month.
Jon Tullett, the Research Manager at International Data Corporation, said the September quarter results were much needed good news for the troubled operator on two levels.
“Firstly, MTN’s strong performance on network is good for transitioning from voice to data. Secondly, the acceleration of new chief executive is very important;they need strong established leadership to take them forward,” he said. MTN was slapped with the record fine for unregistered SIM cards in Nigeria last year.
The market capitalisation of the Nigerian Stock Exchange dropped by N164bn at the close of trading on Tuesday as 27 stocks closed in the red.
The NSE market capitalisation dropped from N9.471bn recorded on Monday to N9.307bn, while the All-Share Index slid to 27,098.52 basis points from 27,574.95 basis points.
A total of 113.498 shares valued at N1.233bn were traded in 2,435 deals.
Ashaka Cement Plc, AG Leventis Nigeria Plc, Vitafoam Nigeria Plc, Cement Company of Northern Nigeria Plc and Dangote Cement Plc emerged as the top five losers, while 11 stocks appreciated in value, according to te NSE data.
The share price of Ashaka Cement closed at N12.26 from N13.57, losing N1.31 (9.65 per cent), while a drop of N0.04 (4.94 per cent) was recorded on AG Leventis shares, which closed at N0.77 from N0.81.
Vitafoam shares also plummeted by N0.13 (4.92 per cent) to close at N2.51 from N2.64, while the share price of CCNN dropped by N0.27 (4.91 per cent) to close at N5.23 from N5.50.
Dangote Cement share price also recorded a loss of N8.83 (4.83 per cent) to close at N174.17 from N183.
The bears took charge of market activities, resulting in a decline of 1.73 per cent in the NSE ASI, with the year-to-date sliding further down to 5.39 per cent negative.
Volume traded and market turnover appreciated by 12.17 per cent and 16.25 per cent respectively. Presco Plc, Wema Bank Plc, Unity Bank Plc, Caverton Offshore Support Group Plc and Skye Bank Plc topped the gainers’ chart, appreciating by 5.09 per cent, 4.92 per cent, 4.84 per cent, 4.44 per cent, and 3.28 per cent accordingly.
The NSE indices showed that all sectors closed in the red zone at the end of Tuesday trading, save for the oil and gas sector that appreciated by 0.53 per cent. The industrial and banking sectors dropped by 2.15 per cent and 0.71 per cent, respectively.
Commenting on the market outcome, analysts at Meristem Securities Limited said, “We attribute the magnitude of the loss in the market today to the 4.83 per cent price decline in Dangote Cement, as the bourse, aside Dangote Cement, would have only lost 0.2 per cent at the close of trading session.
“While performance scorecards in this earnings season have been generally weak, we note that sentiments have not been swayed by positive results released by some companies. Hence, we anticipate that market returns will remain pressured over the short-term.”
Shareholders of Zenith Bank Plc should expect higher dividend at the end of the current financial year given the impressive results the bank has recorded for the nine months ended September 30, 2016.
According to results released monday, Zenith Bank recorded gross earnings of N380.4 billion in 2016, showing an increase of 12.9 per cent from N337.9 billion in the corresponding period of 2015. Net interest income grew by 17.6 per cent from N161.4 billion to N189.8 billion, while impairment charges rose by 124.8 per cent to N9.7 billion to N21.9 billion. However, other income soared from N9.7 billion in 2015 to N32 billion in 2016.
Hence, Zenith Bank ended the period with profit before tax (PBT) of N121.2 billion, showing an increase of 16.6 per cent above the N104 billion posted in the corresponding period of 2015. Profit after tax (PAT) recorded faster growth of 20.4 per cent to N100 billion, up from N83 billion.
Also, the bank attracted more deposits and also gave out more loans and advances. Deposits rose from N2.557 trillion to N2.692 trillion, while loans and advances grew from N1.841 trillion to N2.425 trillion. Total assets hit N4.654 trillion, up from N4.0 trillion in 2015.
Reacting to the results, analysts at FBN Quest said given the nine month profit before tax of N121 billion, the N123 billion made by the management for the full year would be surpassed.
The analysts said:” On the back of these results, we would expect consensus PBT for 2016 to move up strongly, from N123bn currently, given that the nine months result is N121 billion. The operating expenses and interest expense figures are disappointing and would draw some scrutiny from the market. However, we expect the fx-related gains to more than compensate for these, given their magnitude and the fact that it was the absence of such gains in second quarter (Q2) (especially on the non-interest income line) that led to a muted to negative reaction by the market.”
Also assessing the results, analysts at Cordros Capital Limited said Zenith Bank reported an increase in earnings per share (EPS) to N3.18 for the period, compared with an EPS of N2.64 in the previous year. Return on average equity (RoAE) improved to 19.2 per cent versus the 14.8 per cent recorded as at the previous quarter. “The result was impressive, outperforming both management guidance and consensus estimate,” they said.
The Central Bank of Nigeria and other key stakeholders in the payment sector have started tackling cases of electronic fraud (efraud) in the country, with the hope of finding a lasting solution.
The Chief Executive Officer, Electronic Payment Providers Association of Nigeria, Mrs. Regha Onajite, made this disclosure to our correspondent, saying that the CBN had vowed to check the over N4bn being lost to cases of e-frauds annually.
She said that with over N30tn transactions carried out on different e-payment channels by businesses and individuals in the country, “the CBN and other stakeholders have expressed worry over cases of e-fraud, which they said had been discouraging financial inclusion.”
Onajite, therefore, said that the central bank and financial stakeholders in the country would converge on Lagos at the annual Payment Systems and Fraud Conference to find a final solution to electronic fraud (e-fraud) in the country.
“This conference will bring together senior level officers of the fintech sector, banking, regulatory bodies and public officers. Our core focus in this years’ edition is to tackle fraud in a proactive and top-down approach that involves people, process and technology.
This will help create effective combat against the activities of the e-payment fraudsters in Nigeria,” the E-PPAN CEO said.
Explaining specific objectives of the conference, she said it would address the challenges posed by people’s laxity in divulging and compromising organisation information system to fraudsters.
“It will also reappraise, reconnect and tackle the processes that compromise the entire system of e-payment hemisphere in Nigeria, and fashion out how organisations can invest in and deploy the right technologies to enable the industry to be a step ahead of these criminals,” she said.
Onajite added that E-PPAN partners at this year’s event, apart from the CBN, included the Nigerian Electronic Fraud Forum, Committee of Banking Heads, Committee of Chief Compliance Officers of Banks in Nigeria, Information Security Society of Nigeria and the Association of Chief Audit Executives of Banks in Nigeria.
“The conference has been designed to be a veritable rallying ground for the financial industry to deliberate on payment systems and fraud knowledge in West Africa,” she said.
A new report by the Nigeria Extractive Industries Transparency Initiative has revealed that disbursements from the Federation Account to the three tiers of government plunged by 31 per cent in the first half of this year relative to the corresponding period of 2015.
According to NEITI, the drop in revenues may negatively impact budget implementation across the three tiers of government this year, increase the size of budget deficits, and deepen the debt burden.
The report, which is entitled: ‘FAAC disbursements in the first half of 2016 and possible implications’, is the maiden issue of the NEITI quarterly review.
It analysed disbursements by the Federation Accounts Allocation Committee in the first halves of 2015 and 2016, and highlighted possible implications for public governance and management in the country.
It stated that revenues shared to the federal, states and local governments were less by over N800bn from N2.89tn in the first half 2015 to N2.01tn in a similar period this year.
NEITI stated in the report, “This 30.9 per cent decline reflected in lower allocations across the board. The total disbursement to the Federal Government fell from N1.23tn in the first half of 2015 to N854bn in the first half of 2016.
“This represents a 30.9 per cent decline. Total disbursements to the states fell by 30.5 per cent from N1.009tn in the first half of 2015 to N701bn in the first half of 2016. For local governments, allocations from FAAC dropped by 26 per cent from N580.63bn to N429.43bn.”
The Nigerian equities market was characterised by cautious trading as investors await third quarter corporate performance of companies. Following the cautious trading, lower volume and value of trade were recorded while the Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell by 0.95 per cent to close at 27,596.82 compared with a marginal growth recorded the previous week. Market capitalisation closed lower at N9.479 trillion. The market recorded declines in four out of five trading days of the week, to bring the year-to-date decline to 3.65 per cent.
Apart from the ASI, all other indices finished lower during the week with the exception of the NSE Industrial Goods Index that appreciated by 0.52 per cent.
The NSE Industrial Goods Index appreciated by 0.52 per cent. But the NSE Oil & Gas Index recorded the highest decline of 2.98 per cent following losses by Forte Oil Plc (12.2 per cent), Oando Plc (2.1 per cent) and Eterna Oil Plc (1.0 per cent).
Consumer Goods Index followed with a decline of 1.94 per cent as a result of loss suffered by Cadbury Nigeria (16.2 per cent); Guinness Nigeria (3.6 per cent) and Nigerian Breweries Plc (2.5 per cent). Similarly the NSE Insurance Index and NSE Banking Index fell by 0.64 per cent and 0.50 per cent in that order.
Daily Market Performance Summary
Last Monday, the market opened on a bearish note as huge sell offs in bellwethers across sectors – Nigerian Breweries (-3.1 per cent), Forte Oil Plc (-5.0 per cent) and Zenith (-2.0 per cent) – dragged the benchmark index 0.81 per cent lower to close at 27,634.99.
Similarly, market capitalisation shed N77.6 billion to close at N9.5 trillion. Activity level in the market was mixed as volume traded improved 15.8 per cent while value traded declined 49.2 per cent to close at 255.8 million units and N778.4 million respectively.
Performance across sectors was bearish as all indices closed in red except for the NSE Insurance index, that rose by 0.1 per cent. The NSE Oil & Gas Index declined the most followed by the NSE Consumer Goods Index.
The bearish trend was sustained on Tuesday with the NSE ASI declining by 0.29 per cent to close at 27,555.31
The Nigerian Stock Exchange All Share Index (NSE ASI) depreciated by 0.29 per cent to close at 27,555.31, compared with the depreciation of 0.81 per cent recorded the previous day. The depreciation recorded in the share prices of Diamond Bank, Cadbury, UAC of Nigerian, Seplat and GTBank were responsible for the loss recorded in the NSE ASI.
This negative performance was broadly driven by sell pressure on Seplat (-5.0 per cent), ETI (-2.6 per cent), Guinness (-3.9 per cent) and Nestle (-0.7 per cent). Consequently, market capitalization dipped N27.4 billion to settle at N9.5 trillion.
Similar to the previous trading session, performance across sectors was bearish as all indices closed in the red save for the Industrial Goods index which rose 0.3 per cent on account of bargain hunting in Lafarge Africa Plc(+0.8 per cent).
The market recorded its third consecutive decline on Wednesday as the NSE ASI fell by 0.28 per cent to close at 27,478.04. Similarly, the market capitalisation depreciated by 0.28 per cent to close at N9.44 trillion. The depreciation recorded in the share prices of Forte Oil, Dangote Sugar, Cadbury, Oando and Zenith Bank were responsible for the negative performance.
Just as the previous two trading sessions, sectoral performance showed negative in all except the NSE Industrial Goods Index which rose 0.3 per cent driven by bargain hunting in Lafarge Africa. The NSE Oil & Gas Index fell by 3.0 per cent, while the NSE Insurance Index went down by 0.2 per cent. Similarly, the NSE Consumer Goods and Banking indices dipped 0.2 per cent and 0.1 per cent in that order.
Thursday was the only day the market recorded a positive performance last week as appreciation recorded in the share prices of GTBank, Seplat, UBA, Oando and Access Bank lifted the NSE ASI to close 0.44 per cent higher. However, the rebound witnessed in the market on Thursday could not be sustained on the Friday, which was the last trading day for the week. The market remained flat as the NSE ASI closed at 27.596.82.
The total value of stocks traded on Friday fell by 83 per cent to N656 billion, from N4.01 trillion the previous day, while the total volume of stocks traded was 70.93 million in 1,973 deals.
Market turnover
Market turnover for the week stood at 674.721 million shares worth N7.657 billion in 12,290 deals compared with a total of 1.163 billion shares valued at N9.251 billion that exchanged hands the previous week in 14,992 deals. The Financial Services Industry led the activity chart with 495.992 million shares valued at N2.767 billion traded in 6,522 deals; thus contributing 73.51 per cent and 36.14 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 80.885 million shares worth N95.212 million in 536 deals. The third place was occupied by the Construction/Real Estate Industry with a turnover of 32.484 million shares worth N18.498 million in 70 deals. Trading in the top three equities namely – Law Union & Rock Insurance Plc, Ecobank Transnational Incorporated (ETI)and Transnational Corporation of Nigeria Plc accounted for 263.199 million shares worth N1.033 billion in 637 deals, contributing 39.01 per cent and 13.49 per cent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 10,779 units of Exchange Traded Products (ETPs) valued at N63,890.18 executed in 22 deals, compared with a total of 119,743 units valued at N600,589.51 transacted the previous week in 25 deals.
Similarly, a total of 1,700 units of Federal Government Bonds valued at N1.518 million were traded in 1 deal compared to a total of 1,510 units of Federal Government Bonds valued at N1.558 million transacted two weeks ago in one deal.
Gainers and losers
Meanwhile, the price movement chart showed 16 gainers, which is lower than 22 equities of the previous week. Conversely, 38 equities depreciated in price, lower than 42 equities of the previous week, while 126 equities remained unchanged. Caverton led the price gainers, rising by 13.1 per cent. The stock had similarly led the gainers the previous week.
N.E.M Insurance Plc followed with a gain of 5.0 per cent, just as Neimeth International Pharmaceuticals Plc and Wema Bank Plc rose by 4.8 per cent apiece. Beta Glass Plc and GTBank Plc appreciated by 3.3 apiece. Other top price gainers included: Skye Bank Plc(3.2 per cent); Stanbic IBTC Holdings Plc (3.0 per cent); Mobil Oil Nigeria Plc (2.1 per cent ) and Learn Africa Plc (1.6 per cent).
Conversely, Cadbury Nigeria Plc, which led the price losers, shedding 16.2 per cent trailed by GSK Nigeria Plc with 14.1 per cent. A.G Leventis Plc fell by 12.9 per cent, while Forte Oil Plc and NAHCO declined by 12.2 per cent and 11.5 per cent in that order.
Ashaka Cement Plc and E-Tranzact went down by 9.7 per cent and 9.5 per cent respectively. Other top price losers included: ETI(9.1 per cent) and Livestock Feeds Plc (7.2 per cent).
