The stock market declined by marginal 0.02 per cent wednesday despite higher number of price gainers. Although a total of 24 stocks appreciated, the Nigerian Stock Exchange (NSE) All-Share Index declined by 0.02 per cent to close at 32,375.12. Market capitalisation shed N2.1 billion to close lower at N11.8 trillion. Profit taking in International Breweries Plc, FBN Holding Plc and United Bank for Africa Plc led to the decline in the index.
However, Forte Oil Plc led the price gainers with 10 per cent, trailed by Cement Company of Northern Nigeria Plc by 9.7 per cent. Regency Alliance Insurance Plc and
Sovereign Trust Insurance Plc appreciated by 9.09 each.
Prestige Assurance plc went up by 8.7 per cent, just Union Diagnostic & Clinical Services Plc garnered 8.5 per cent.
Other top price gainers included Linkage Assurance Plc (8.4 per cent); Union Bank of Nigeria Plc (6.4 per cent); AIICO Insurance Plc (6.2 per cent) and Skye Bank Plc (6.06 per cent).
The shares of Forte Oil Plc has attracted high demand lately. The petroleum product marketing firm had ended half year to June 30, 2018 with an impressive performance.
Profit after tax from continuing and discontinued operations increased by 93 per cent to N 7.9 billion compared to N4.11 billion recorded in 2017. Earnings per share grew by 47 per cent to N1.54 compared to N1.05 recorded for the same period in 2017, while total assets improved by four per cent to N153 billion, up from N147 billion recorded for the same period in H1 2017.
According to the company, the first half of 2018 witnessed a more stable operating environment with higher oil prices, foreign exchange availability and improved petroleum product supply across the country.
“As a company, we commenced our strategic plans and initiatives to re-examine our business model and optimizing our balance sheet through asset disposal and expansion of our downstream operations in Nigeria. In May 2018, we obtained the approval of the board and shareholders at the 39th annual general meeting to pursue our divestment initiatives and the company commenced the process to divest its interest in Power, Upstream Services and Marketing in Ghana (APOG). As at 30 June 2018, these subsidiaries were classified as disposal groups held for sale and as discontinued operations,” it said.
The company explained that despite the operational challenges and discontinued operations, the company recorded 32 per cent growth in revenues, translating to N61.8 billion, compared to N46.7 billion in H1, 2017 as a result of improved product supplies. While administrative expenses reduced by nine from N3.82 billion recorded in 2017 to N3.48 billion in 2018.
Nigeria’s total domestic and foreign debt stock stood at N15.63 trillion and $22.08 billion respectively, as at June 30, 2018, the National Bureau of Statistics (NBS) has stated.
According to the Nigerian Domestic and Foreign Debt (Q2 2018), which was posted on its website, of the total domestic debt, borrowing by states represented N3.48 trillion, of which Lagos accounted for 14.88 per cent of the total domestic debt, while Anambra had the least debt in the category with a contribution 0.08 per cent to the total domestic debt stock.
However, the foreign borrowing consisted of $10.88 billion from multilateral agencies; $274.98 million from bilateral (AFD) and another $2.12 billion bilateral from the Exim Bank of China, JICA, India and KFW, while $8.80 billion was commercial.
Lagos State had the highest foreign debt profile among the 36 states and the FCT accounting for 34.17 per cent.
Edo accounted for 6.57 per cent of external loans; Kaduna, 5.48 per cent; Cross River, 4.56 per cent and Bauchi, 3.18 per cent.
The Securities and Exchange Commission (SEC), has said that it will soon come out with regulations that will guide technology-driven products in the capital market. The Acting Director General of SEC, Ms. Mary Uduk during a presentation by Vice President, FinTech Association of Nigeria, Mr. Ade Bajomo, titled: “Market Impact of the FinTech Revolution” in Abuja wednesday.
Uduk, who also announced Bajomo as Chair of the Capital Market Committee on Fintech Roadmap for Capital Markets in Nigeria, said the SEC as the apex regulator of the Nigerian capital market is interested in investments that Nigerians are making especially with the advent of digitalisation.
“If we will regulate this market and understand what is happening, we need our staff to understand the rudiments of FinTech. Very soon the whole world will move to technology for regulation. Other jurisdictions have already gone far into it with some of them already amending their rules in that direction. The International Organisation of Securities Commissions (IOSCO) is on it and there is a lot on it already all over the world and we can’t be left behind. We are very much interested in some of the most active areas of Fintech innovation like block chain technology, crypto currencies and how they affect investors,” Uduk said.
According her, as regulators of the capital market, it is the responsibility of the SEC to find out how such investments are going on and if they meet set standards because when investors lose money they will come back to the SEC.
“That is why we are seeking to understand what FinTech is all about to enable us regulate the market properly,” she stated.
The DG noted that during the last Capital Market Committee meeting in Lagos, the Committee agreed to set up a Committee to draw a Fintech Adoption roadmap for the Capital Market.
Uduk alluded to the growing influence of Fintechs, saying that there is the need for the capital market to take advantage of the Fintech offerings in moving the capital market forward.
She equally emphasised the focus of the commission on capacity building, knowledge sharing, advocacy and collaboration with relevant entities.
“The capital market needs to create an enabling environment that is attractive enough for FinTechs to innovate as the Market should engage actively with the new trend in technology and provide the adequate regulatory framework for proper adoption of suitable technology and that is one of the reasons why we have invited FinTech here today for this presentation,” she said. Attachments area
The stock market wednesday recorded its biggest daily loss in the last eight months following continued sell-offs in big counters.
Specifically, the Nigerian Stock Exchange (NSE) All-Share Index went down by 3.46 per cent to close at 32,292.79, while market capitalisation shed N422.2 billion to close N11.8 trillion. Consequently, the year-to-date decline worsened to 15.6 per cent.
According to analysts at Meristem Securities Limited said significant selloffs on top counters across all sectors today dragged market performance.
“Weak investor sentiment was adequately captured by a poor market breadth of 0.30x, as investors flee the Nigerian bourse. We do not expect a deviation from this trend in the remaining trading days this week, implying a negative close to the market this week,” they said.
A total of 37 stocks declined compared with only 10 that appreciated. The price losers were dominated by heavy weights such as Dangote Cement Plc, Nigerian Breweries Plc, Zenith Bank Plc, FBN Holdings Plc and Stanbic IBTC Holdings Plc.
However, Universal Insurance Plc led the price losers with 10 per cent, trailed by Cement Company of Northern Nigeria Plc with 9.8 per cent. On the positive side, Law Union & Rock Insurance Plc led the price gainers with 9.0 per cent, followed by Skye Bank Plc with 8.9 per cent.
From every indication, investors are ignoring strong fundamentals of some of the stocks and continued to exit due to their apprehension over the current political situation.
Analysts at Afrinvest (W.A) have made some stocks in the banking, consumer goods and industrial goods sectors to be attractive. In the banking sector, for instance, the said United Bank for Africa Plc has upside potential of 56 per cent and Zenith Bank Plc 52 per cent. GTBank Plc has 27 per cent growth potential, while Access Bank Plc has 11.3 per cent.
In consumer goods sector, the analysts said UAC of Nigeria Plc has upside potential of 122 per cent; Nigerian Breweries Plc has the potential to gain 60 per cent; PZ Cussons Nigeria Plc 48.5 per cent and Flour Mills of Nigeria Plc 29.9 per cent. In the industrial goods sector, Lafarge Africa Plc can rise by 158 per cent and Dangote Cement Plc 28.5 per cent.
According to them, while risk factors remain on the horizon, they are optimistic of an impending bullish streak in the market as equities near trough points.
“We advise investors to be on standby as we perceive the turning point imminent whilst echoing our long-term focus on fundamentally sound stocks with attractive entry prices and prospects of, at least, double digit upside potential,” they stressed.
Amidst the ravaging bears that has pushed the equities market to a 15-month low on Monday, analysts at Afrinvest West Africa have unveiled some stocks that have upside potential to fetch investors significant capital growth.
The stocks are in the banking, consumer goods and industrial goods sectors. In the banking sector, for instance, the said United Bank for Africa Plc was identified to have upside potential of 56 per cent and Zenith Bank Plc 52 per cent. GTBank Plc has 27 per cent growth potential, while Access Bank Plc has 11.3 per cent.
In consumer goods sector, the analysts said UAC of Nigeria Plc has upside potential of 122 per cent; Nigerian Breweries Plc has the potential to gain 60 per cent; PZ Cussons Nigeria Plc 48.5 per cent and Flour Mills of Nigeria Plc 29.9 per cent. In the industrial goods sector, Lafarge Africa Plc can rise by 158 per cent and Dangote Cement Plc 28.5 per cent. According to them, while risk factors remain on the horizon, they are optimistic of an impending bullish streak in the market as equities near trough points.
“We advise investors to be on standby as we perceive the turning point imminent whilst echoing our long term focus on fundamentally sound stocks with attractive entry prices and prospects of, at least, double digit upside potential,” they stressed.
Analysts at Meristem Securities Limited had last week said rather than panic, investors should take advantage of the bear market, noting that the bearish days would be over soon. “With stock prices bottoming out, light gleams at the end of the tunnel. The low prices in the market provide investment opportunities for players in the market, but of course, with a focus on the fundamentally justified stocks,” they said.
The analysts explained that the 2019 elections have posed a major concern for most investors which has caused them to withdraw their funds from the market, thus making profit volume opportunities after the election become more visible. “We believe that after the elections in February 2019, calm will be restored in the market. It is only fair that you don’t get caught sleeping so why not you buy now, ahead of 2019?,” they said.
In buying stocks now, the analysts advised investors to consider the fundamentally justified stocks, stressing that “the market always remembers these stocks and given their very attractive prices now, your patience will be rewarded.” They added that investors should also consider companies which are important to the growth of the economy.
“Consumption is a given and the government will always carry out infrastructural projects and works. Consumer staples and the elephant in the industrial goods sector lead the way here,” they said. Other stocks investors should consider, according to the analysts, are dividend yielding stocks.
“Dividend yielding stocks always provide an extra income stream for their holders. Even when stock prices are falling and there is no capital appreciation, dividend income provides some comfort. With prices on the low end, dividend yield becomes even more attractive,” they said.
The stock market fell further yesterday following losses by bellwether counters.
Consequently, the Nigerian Stock Exchange All-Share Index (NSE ASI) that hit a-15 month low on Monday, went down further by another 0.48 per cent to close lower at 33,449.17, while market capitalisation shed N59.3 billion to close at N12.2 trillion.
However, the decline in the index resulted majorly from losses suffered by bellwether tickers such as Zenith Bank, GTBank, UBA, and Nigerian Breweries Plc among others.
Commenting on the market performance, analysts at Meristem Securities Limited said: “Profit taking activities on some heavyweight counters dictated market direction today, maintaining its downward trend. Although consumer goods heavyweight, Nestle Nigeria Plc gained significantly today, selling pressure still prevailed. We maintain our stance of a negative close to the market at the end of the trading week.”
Dangote Sugar Refinery Plc led the price losers and NAHCO Plc with 10 apiece. Universal Insurance Plc and Sunu Assurance Plc trailed with 9.0 per cent each. Japaul Oil and Maritime Services Plc and Consolidated Hallmark Insurance Plc went down by 8.3 per cent and 7.8 per cent respectively.
Other top price losers included: Niger Insurance Plc (7.6 per cent); Cornerstone Insurance Plc (7.4 per cent); UAC of Nigeria Plc (7.2 per cent); United Capital Plc (7.1 per cent); Standard Insurance Plc (6.9 per cent); GTBank (5.8 per cent) and Skye Bank Plc (5.0 per cent).
In all, 30 stocks shed value, while only 14 stocks appreciated. Law Union and Rock Insurance Plc led the gainers with 10 per cent, followed by Nestle Nigeria Plc with 9.5 per cent.
Regency Alliance Insurance Plc chalked up 9.5 per cent, while Neimeth International Pharmaceuticals Plc garnered 9.0 per cent. Learn Africa Plc, Dangote Flour Mills Plc, WAPIC Insurance Plc went up by 8.9 per cent, 7.0 per cent and 5.1 per cent in that order.
Meanwhile, volume and value of trading increased 9.5 per cent and 17.7 per cent to 150.7 million shares and N1.6 billion respectively. The top traded by volume were GTBank (17.5 million shares ), UBA (15.6 million shares ) and Diamond Bank (13.8 million shares ) while GTBank (N562.8 million ), Nestle (N250.7 million) and Zenith Bank (N236.0 million ) were the top trade by value.
In terms of sectoral performance, the NSE Banking Index led the bears, sliding by 3.0 per cent due to continuous selloffs in GTBank, Zenith Bank and UBA. The NSE Insurance Index shed 0.9 per cent, while the NSE Oil & Gas Index fell by 0.8 per cent.
Shareholders PZ Cussons Nigeria Plc are to receive the 15 kobo dividend recommended by the board of directors for the year ended May 30, 2018 on Friday October 19, 2018. The payment will be after the approval by the shareholders at the annual general meeting (AGM) a day earlier.
PZ Cussons Nigeria Plc disclosed this in a notification to the Nigerian Stock Exchange (NSE). However, the 15 kobo dividend, which amount to N595.572 million is lower than the 50 kobo or N1.985 billion paid last year.
The company had cut the dividend payout due to a decline of 44 per cent in the company’s profit after tax (PAT) for the year.
In its audited results, PZ Cussons reported a revenue of N80.553 billion, up by 3.0 per cent from N78.216 billion recorded in 2017. Cost of sale rose from N50.267 billion to N56.097 billion, bringing the gross profit to N24.455 billion compared with N27.947 billion the previous year.
Sales and distribution costs equally went up to N9.601 billion from N9.095 billion, while administrative expenses hit N6.626 billion compared with N5.637 billion in 2017. Net financing cost increased significantly by 234 per cent to N652 million, from N195 million in 2017.
Consequently, profit before tax fell 52 per cent to N2.313 billion from N4.811 billion, the decrease in PAT was lower due to 66 per cent reduction in taxation, which was N386 million in 2018 compared with N1.125 billion in 2017. As a result, PZ Cussons posted PAT of N1.927 billion in 2018, showing a decline of 44 per cent compared with N3.686 billion in 2017.
Chairman of PZ Cussons Nigeria Plc, Chief Kola Jamodu had said the weaker revenue growth, increased operating expenses due to inflation resulted in a reduction in the group’s PAT.
According to him, there have been no structural changes in the landscape of the segments in which the company operate and the market share of its brands remain strong.
However, he said to buttress and sustain the position of the company in the market, improve efficiency and improve performance of the business into the future, a number of initiatives are being implemented.
“They include: a further streamling and optimisation of product portfolio to bring more focus on key brands and categories and restore margins; optimisation of the operating model to reduce overheads as well as improve the speed at which new products are brought to the market and a review of product costs across all categories with a focus on areas such as packaging reduction and a drive to reduce plastic consumption,” Jamodu said.
The stock market opened the month of September on negative note on Monday. As a result, the Nigerian Stock Exchange (NSE) All-Share Index shed 0.03 per cent to close at 34,837.50. Although it decline was lower than the 0.68 per cent recorded on the last day of August, analysts said the market remained under the strong control of the bears. The market had declined by 5.86 per cent in August reflecting prevailing negative investors’ sentiments. About 1.63 per cent of the decline in the month recorded last week.
Although trading has been bearish over the months due continued sell down by foreign and domestic investors, analysts said the lower-than-expected gross domestic product (GDP) growth released last week sent negative signals to the market.
“News of the apex Central Bank of Nigeria (CBN)’s fine on Stanbic IBTC Bank and Diamond Bank Plc for illegally repatriating funds on behalf of telecommunications company MTN Nigeria also contributed to the market’s negative sentiments,” some analysts had said.
It is expected that some level of bargain hunting will be seen this week, following the low prices of many stocks. However, that is yet to materialise as stocks continue to plummet.
Some other analysts had guided investors to trade cautiously in the short-to-medium term, saying the absence of a positive one-off catalyst and brewing political concerns, continue to cast a shadow on our outlook for risky assets. “However, the likelihood of recovery in the long term remains supported by stable macroeconomic fundamentals,” they said.
A total of 19 stocks depreciated yesterday while 18 appreciated. Jaiz Bank Plc led the price losers with 10 per cent, trailed by Flour Mills of Nigeria Plc with 9.6 per cent, while Transcorp Plc went down by 7.9 per cent. Prestige Assurance Plc, Veritas Kapital Insurance Plc and Mutual Benefits Assurance Plc dipped by 7.6, 6.9 per cent and 6.6 per cent in that order.
On the positive side, Consolidated Hallmark Insurance Plc led the price gainers with 10 per cent, trailed by AIICO Insurance Plc with 9.7 per cent, just as Continental Reinsurance Plc garnered 9.4 per cent.
NPF Microfinance Bank Plc, WAPIC Insurance Plc and Union Diagnostic and Clinical Services Plc appreciated by8.9 per cent, 8.3 per cent and 7.6 per cent respectively.
Meanwhile, activity level waned as volume and value traded fell 65.8 per cent and 68.0 per cent to 131.5 million shares and N3.1 billion respectively. The top traded stocks by volume were Nigerian Breweries Plc (19.1 million), Stanbic IBTC Bank Plc (11.8 million shares) and AIICO Insurance Plc (11.2 million) while Nigerian Breweries Plc (N1.8 billion), Stanbic IBTC Bank (N0.6 billion) and Zenith Bank Plc (N0.1 billion) were the top traded stocks by value.