Stock market rises further, investors gain N71bn

Investors gained N71bn in two consecutive days following the sustained positive performance of equities listed on the Nigerian Stock Exchange.

The market capitalisation of the equities increased from N10.952tn on Tuesday to N10.965tn and N11.023tn on Wednesday and Thursday respectively.

The equities market advanced by 0.53 per cent on Thursday to settle at 29,347.62 basis points following gains in bellwether stocks such as Guaranty Trust Bank Plc, FBN Holdings Plc and United Bank for Africa Plc.

Following sustained gains recorded on two days, the market year-to-date return moderated to -6.6 per cent.

However, activity level weakened as volume and value traded shed 45.5 per cent and 18.2 per cent to 224.028 million units and N2.013bn, respectively.

The top traded stocks by volume were Zenith Bank Plc (45.4 million units), Lasaco Assurance Plc (42.3 million units) and Access Bank Plc (21.7 million units) while Zenith Bank (N927.7m), GTB (N376.9m) and Stanbic IBTC Holdings Plc (N135.3m) led the top trades by value.

The performance across sectors was largely bullish as three of the five indices closed on a positive note, one closed on a negative note, while the last one closed flat.

The insurance index led advancers with a 1.9 per cent gain following bargain hunting in NEM Insurance Plc and Niger Insurance Plc.

The banking and industrial goods indices appreciated by 1.1 per cent and 0.8 per cent, respectively, on the back of buying interest in GTB, FBN Holdings, United Bank for Africa Plc and Lafarge Africa Plc.

The oil and gas index closed flat for the second consecutive trading session despite profit-taking in Eterna Plc.

On the flip side, the consumer goods depreciated by 0.1 per cent on account of profit-taking in PZ Cussons Nigeria Plc and Dangote Flour Mills Plc.

Investor sentiment strengthened to 2.1x from the 1.3x recorded on Wednesday as 15 gainers outnumbered seven decliners.

The top five gainers were NEM Insurance, Niger Insurance Plc, Fidelity Bank Plc, United Capital Plc and FBN Holdings Plc, whose share prices rose by 10 per cent, 10 per cent, 8.70 per cent, 6.54 per cent and 6.12 per cent respectively.

The seven losers were Ikeja Hotel Plc, Associated Bus Company Plc, Eterna, Chams Plc, Flour Mills Nigeria Plc, Cutix Plc and Zenith Bank, whose respective share prices shed 9.76 per cent, 8.33 per cent, 8.05 per cent, 7.14 per cent, 2.35 per cent, 1.23 per cent and 0.73 per cent.

Analysts at Afrinvest Securities Limited said, “Although we witnessed bargain hunting by investors during mid-week, we still maintain an overall bearish outlook in the near term.”

First Aluminium seeks voluntary delisting from NSE

First Aluminium Nigeria Plc says “the current illiquidity nature of the capital market” has rendered the primary corporate objective of its listing to raise capital and provide liquidity unattainable.

The company, in an explanatory note to shareholders, said it was seeking a voluntary delisting from the main board of the Nigerian Stock Exchange as there had been little or no trading activity on the shares held by the minority shareholders over the last seven years.

First Aluminium, which is one of the first Nigerian listed companies, has seen its share price stuck at 50 kobo for about six years between June 2011 and June 2017, and thereafter experienced further diminution both in share price and trading volumes.

The company’s daily average volume ranged between 2,815 to roughly 2,918 units during the period July 2017 to December 2018.

It said there was a significant fall in its average daily trading volumes to 2,918 units between July 2017 and June 2018 and a further decline to 2,816 units between July 2018 and December 2018.

The company said neither it nor any shareholder was benefitting from the continued listing on the NSE.

It said the rationalisation of operational expenses to support the business and to meet the needs of various stakeholders as the attendant cost required to comply with its listing requirements (including filing fees, penalties or sanctions) were not commensurate with the benefits to the company.

The statement read in part, “Shareholders are not benefitting from the continued listing as they are not getting exit opportunities and their investments have been locked up, thereby finding it difficult to dispose of their shareholding. Neither the company nor its shareholders have benefitted as the company’s shares continue to trade at a significant discount to the intrinsic value.

“The increasing competitive environment and the struggle to defend market share have resulted in market pressure to reduce price and this may significantly impact operating margin.

“The majority shareholders (with over 75 per cent shareholding) are the promoters of the transaction and the majority shareholders wish to offer other shareholders (the minority shareholders) the opportunity to either remain shareholders of the unlisted company or accept a consideration for their shares, which the majority shareholders are willing to purchase.”

According to First Aluminium, in line with NSE regulatory requirements for a voluntary delisting, an exit opportunity had been provided for shareholders that do not wish to be part of the delisted company.

It added that at the meeting of the board of directors of the company, which held on August 8, 2018, the board approved and resolved to recommend to the shareholders of the company the delisting of all the 2,110,359,242 units ordinary issued share capital of the company from the daily official list and from trading on the main board of the Exchange.

It said the delisting would afford the company to carry out an imminent corporate restructuring exercise to take advantage of emerging opportunities.

The statement said, “The company may consider re-listing in the future if the market conditions are favourable. The voluntary delisting will not occasion loss of business opportunities as there are similar unlisted aluminium companies that are commanding significant share of the aluminium market.

“Also, minority shareholders will not lose their shares because of the voluntary delisting and such shareholders may retain their membership in the unlisted company. However, through the voluntary delisting process, the minority shareholders who do not wish to be members of an unlisted company will have an opportunity to exit the company, in accordance with the rules of the NSE.”

It stated that the shareholders approved the proposal for the voluntary delisting via a poll vote at its annual general meeting on September 25, 2018.

AfDB approves $4.8m for AfCFTA, Nigeria assesses impact

The board of the African Development Bank has approved an institutional support grant of $4.8m to the African Union, to accelerate the momentum of the African Continental Free Trade Area Agreement.

AfCFTA received its 22nd ratification on April 2, bringing the agreement into force.

Nigeria, has however been assessing the impact the AfCFTA would have on its economy, before ratifying the agreement.

The AfCFTA is a major force for continental integration aimed at expanding intra-African trade by up to $35bn per year and ushering in freedom of movement for goods, services and people across the continent’s internal borders.

The agreement, which comes with a regime of reduced tariffs and non-tariff barriers to cut the cost of doing business on the continent is also aimed at boosting agriculture and industrial exports by up to $66bn per year.

AfDB’s grant is targeted at laying the institutional foundation for the AfCFTA’s implementation secretariat and the roll out of the implementation programmes.

The Manager, Trade and Investment Climate Division, AfDB, Andoh Mensah, said, “The momentum is now in full swing. It is now crucial to establish a robust, efficient, purpose-driven secretariat, capable of addressing improved stakeholder engagement, inclusiveness and ownership in the AfCFTA implementation.”

The bank stated that the grant would also assist efforts towards full ratification of the agreement by all AU member states including the application of tariff reductions and related commitments, while generating stakeholder support for the AfCFTA to ensure inclusiveness and common ownership.

During an Africa trade forum on AfCFTA ratification and implementation in Lagos, the Minister for Industry, Trade and Investment, Dr Okechukwu Enelamah, said Nigeria was following developments on AfCFTA keenly.

“We have our eyes not just on the ball, but on the entire game.  We are very much in technical play,” he said.

The minister said that a presidential committee had been established on AfCFTA’s impact assessment and preparedness of Nigeria.

The Chartered Institute of Bankers of Nigeria had however encouraged the government to ratify the AfCFTA, which was designed to create a single continental market for goods and services as well as the free movement of business persons and investments across the continent.

Stock market rebounds on N16.5bn gain

The Nigerian stock market witnessed a rebound on Wednesday as 24 stocks led by Livestock Feeds Plc recorded price appreciation.

The market capitalisation of equities listed on the Nigerian Stock Exchange increased from N10.952tn on Tuesday to N10.965tn on Wednesday.

The All-Share Index gained 0.12 per cent to settle at 29,202.54 basis points while the year-to-date loss moderated to -7.1 per cent.

Activity level was mixed as volume traded advanced by 9.9 per cent to 411.2 million units while value traded declined by 19.5 per cent to N2.5bn.

Transnational Corporation of Nigeria Plc (174.5 million units), Sterling Bank Plc (48.8 million units) and Access Bank Plc (37.6 million units) were the top traded stocks by volume while Guaranty Trust Bank Plc (N758.5m), Zenith Bank Plc (N240.5m) and Access Bank (N220.1m) were the top traded stocks by volume.

Performance across sectors was largely bearish as three indices closed in the red, two closed in the green and one closed flat.

The industrial goods index led decliners, down by 1.3 per cent following sell-offs in Cutix Plc and Cement Company of Northern Nigeria Plc.

The insurance and consumer goods indices declined by 0.6 per cent and 0.4 per cent, respectively, on the back of losses in NEM Insurance Plc, Cornerstone Insurance Plc, PZ Cussons Nigeria Plc and Dangote Flour Mills Plc.

The oil and gas index closed flat despite gains in Eterna Plc.

On the flip side, the banking index rose by 0.8 per cent on account of bargain hunting in Zenith Bank and FBN Holdings Plc.

Investor sentiment strengthened to 1.3x from the 0.8x recorded in on Tuesday.

The top five gainers were Livestock Feeds, Custodian Investment Plc, Learn Africa Plc, Transnationwide Express Plc and NPF Microfinance Bank Plc.

“Following Wednesday’s positive performance, we do not rule out the possibility of bargain hunting in Thursday’s trading session,” analysts at Afrinvest Securities Limited said.

Stock market declines further as 28 firms lose

The nation’s stock market declined further on Tuesday as bearish sentiments persisted, making investors lose N4.8bn.

The market capitalisation of equities listed on the Nigerian Stock Exchange dropped from N10.954tn on Monday to N10.948tn on Tuesday while the year-to-date loss stood at -7.3 per cent.

On Tuesday, the stock market drew closer to a two-year low level of 25,780.02 basis points on April 21, 2017 and a one-year low level of 28,780.02bps as the All Share Index depreciated by 0.04 per cent to settle at 29,149.46 basis points on the back of sell-offs in Ecobank Transnational Incorporated, Dangote Cement Plc and Dangote Sugar Refinery Plc.

Activity level declined as volume and value traded fell by 17.7 per cent and 41.8 per cent to 374.026 million units and N3.057bn, respectively.

The top traded stocks by volume were Sterling Bank Plc (119.7 million units), Chams Plc (50.3 million units) and FBN Holdings Plc (44.6 million units) while the top traded stocks by value were Guaranty Trust Bank Plc (N788m), Zenith Bank Plc (N471.3m) and FBN Holdings Plc (N323.1m).

Performance across sectors was bearish as all indices closed on a negative note. The insurance index led losers, down by 1.8 per cent largely on the back of losses in NEM Insurance Plc.

The banking and oil and gas indices dipped by 0.5 per cent and 0.4 per cent, respectively, due to profit-taking in Zenith Bank, FBN Holdings and Oando Plc.

The consumer goods index fell by 0.2 per cent due to sell-offs in Nascon Allied Industries Plc and Dangote Sugar Refinery.

Major losses recorded in Dangote Cement dragged the industrial goods index down by 0.1 per cent.

Investor sentiment improved to 0.8x from the 0.4x recorded on Monday as 12 stocks advanced against 15 decliners.

The top five losers were NEM Insurance, Ecobank, Livestock Feeds Plc, Niger Insurance Plc and Nascon Allied Industries, whose respective share prices shed 9.87 per cent, 6.67 per cent, 5.66 per cent, 4.76 per cent and 4.75 per cent.

Analysts at Afrinvest Securities Limited said following the mild improvement in Tuesday’s trading session, relative to the prior session, they did not rule out the possibility of a positive performance in Wednesday’s trading session buoyed by the improving investor sentiment.

“However, we advise investors to remain cautious while seeking for opportunities as we maintain our bearish outlook over the near term,” they added.

N33bn OMO bills to mature this week

Image result for N33bn OMO bills to mature this weekOPEN Market Operation bills worth N33bn are expected to mature this week.

The Treasury bills secondary market started the second quarter of 2019 on a bullish note largely buoyed by increased system liquidity from the Federation Account Allocation Committee injection almost two weeks ago.

As the Central Bank of Nigeria resumed its aggressive liquidity mop-ups through OMO auctions after a one-week break, average yields across all tenors shed marginally by two basis points week-on-week to settle at 13.4 per cent from 13.6 per cent the previous week.

Demand was witnessed largely on the short- and medium-term bills causing yields to drop by 60bps and 20bps week-on-week, respectively, while the long-term bills advanced by 11bps week-on-week as sell-offs were experienced on the 02-JAN-20 and 23-JAN-20 bills.

Last week, the apex bank also offered a total of N350bn in two OMO auctions. At the first auction on Tuesday, N200bn was offered across the 86-, 153- and 364-day bills, while on Thursday, N150bn was offered across the 203- and 364-day bills.

Investors exhibited preference for longer- tenor OMO instruments, which recorded 2.1x over-subscription while the short- and medium-term were under subscribed by 0.6x and 0.1x, respectively.

In addition, the CBN offered N95.7bn worth of bills across 91-, 182- and 364-day tenors at the primary market auction on Wednesday last week with a total bid-to-cover ratio of 2.1x and stop rates inching by 40bps and 51bps on medium- and long-term bills in tandem with the secondary market levels.

The bills were all oversubscribed, however, only the long-term bill was fully allotted while the 91-day and 182-day bills received 0.5x and 0.8x allotment, respectively.

Analysts at Afrinvest Securities Limited said going into this week, they expected yields to remain high on the back of tightened liquidity and the possibility of a CBN mop-up exercise as OMO maturities worth N33bn were expected to hit the system.

“Investors are advised to take advantage of medium to long-term bills with attractive yields,” they said.

In the bond market, performance was bearish as average yield advanced by 14bps week-on-week to settle at 14.1 per cent last week due to sell-offs experienced across all segments of the curve.

However, it intensified in JAN-22, FEB-28 and NOV-28 maturities whose yields advanced by 38bps, 38bps and 37bps, respectively.

Last week, the Debt Management Office released the Federal Government bonds issuance calendar for the second quarter of 2019 where it announced to issue its first 30-year bond.

“We anticipate quiet trading sessions in the bond market this week as investors trade cautiously, awaiting clear policy directions,” analysts at Afrinvest said.

World Bank cuts sub-Saharan Africa’s growth forecast

‘World Bank’s funded project on course’The World Bank on Monday cut its growth forecast for sub-Saharan Africa this year to 2.8 per cent from an initial 3.3 per cent.

The commodity price slump of 2015 cut short a decade of rapid growth for the region, and the bank said growth would take longer to recover as a decline in industrial production and a trade dispute between China and the United States (U.S.) take their toll.

The bank’s 2019 forecast means economic growth will lag population growth for the fourth year in a row and it will remain stuck below three per cent, which it slipped to in 2015.

In its latest report on the regional economy, the bank also cut its 2018 growth estimate to 2.3 per cent from last October’s prediction of 2.7 per cent growth for last year.

“The slower-than-expected overall growth reflects ongoing global uncertainty, but increasingly comes from domestic macroeconomic instability including poorly managed debt, inflation and deficits,” the bank said.

Nigeria, South Africa and Angola, which make up about 60 per cent of sub-Saharan Africa’s annual economic output, were all facing various challenges, curbing their contribution to the growth momentum, the bank said.

“This downward revision reflects slower growth in Nigeria and Angola, due to challenges in the oil sector, and subdued investment growth in South Africa, due to low business confidence,” it said.

Nigeria’s economy grew by an estimated 1.9 per cent last year, up from 0.8 per cent the previous year, the World Bank said, reflecting a modest pick-up in the non-oil sector.

South Africa came out of recession in the third quarter of last year but investors were still cautious due to policy uncertainty, the bank said.

In the meantime Angola, the region’s third-biggest economy, remained stuck in recession, as oil production remained weak.

High inflation and heavy debt loads discouraged investors in economies like Zambia and Liberia, hitting their growth prospects, the World Bank said.

Economies that do not depend on commodities like Rwanda, Uganda, Kenya, Benin and Ivory Coast, continued to grow strongly, the bank said in the report.

Albert Zeufack, the chief economist for Africa at the bank, said the region could boost annual growth by about nearly two percentage points if it harnesses information technology more effectively. “This is a game-changer for Africa,” he said.

NSE lifts suspension on Afromedia’s shares

THE Nigerian Stock Exchange has lifted the suspension it placed on trading in the shares of Afromedia Plc.

The NSE, in a statement on Monday, referred to its Market Bulletin dated April 9, 2018, which notified the public of the suspension of Afromedia for non-compliance with the rules for filing of accounts and treatment of default filing and the rulebook of the exchange (issuers’ rules).

It said the rule provided that if an issuer failed to file the relevant accounts by the expiration of the cure period, the Exchange would send to the issuer a ‘Second Filing Deficiency Notification’ within two business days after the end of the cure period.

The bourse added that trading in the issuer’s securities would be suspended and the Securities and Exchange Commission and the market would be notified within 24 hours of the suspension.

The statement read in part, “Afromedia Plc has now filed its outstanding financial statements to the Exchange.

“In view of the submission of the company’s accounts and pursuant to rule 3.3 of the default filing rules, which provides that ‘The suspension of trading in the issuer’s securities will be lifted upon submission of the relevant accounts provided the Exchange is satisfied that the accounts comply with all applicable rules of the Exchange.’”

According to the rule, the Exchange shall thereafter also announce through the medium by which the public and the SEC was initially notified of the suspension.

“The general public is hereby notified that the suspension placed in the trading of the company’s shares has been lifted, effective Monday, April 8, 2018.”

SEC urges youth participation in capital market

The Securities and Exchange Commission has encouraged Nigerian youths to avail themselves of the investment opportunities in the capital market.

The acting Director-General, SEC, Ms Mary Uduk, who stated this, said there were various products and funds available in the market that would appeal to the youth populace in Nigeria.

She encouraged them to take advantages of the opportunities and invest wisely.

Uduk said, “We have mutual funds and it covers every asset in the capital market whether it is money market, insurance, capital market, and real estate or infrastructure, among others.

“The youths can invest in these; rather than leave your money in savings account, you can invest in mutual funds.

“It runs like savings account and after three months, you can withdraw your money the same way as you do with the banks. Youths don’t have to go and gamble as there are so many products in the capital market that they can invest in.”

She said the commission had commenced investor education and enlightenment for Nigerians to understand the benefits of mutual funds, which she said gave more interest than saving money in bank accounts.

Uduk also urged those that had already invested in the market to register to claim their dividends electronically as a means of reducing the unclaimed dividends profile.

She said, “For every account that is mandated, all accrued dividends are automatically paid. Then there is the use of regularisation of multiple accounts. We discovered that while dividend was growing and increasing the pace is not as satisfactory as when we observe that multiple accounts, which have not been claimed for many years, are still being paid dividends.

“Those people that have multiple accounts can only lay claim on dividends in one account; all the others will keep warehousing dividends as long as they are not regularised.

“We, therefore, urge all those with multiple accounts to regularise such accounts so that they can also claim their dividends”.

Stock investors lose N170bn, market cap falls below N11tn

THE nation’s stock market opened the week on a bearish note as investors lost N170bn on Monday.

The equities market, which lost N343bn on four trading sessions last week, saw its market capitalisation drop from N11.124tn on Friday to N10.954tn on Monday.

The All Share Index shed 1.53 per cent to close at 29,162.24 basis points, which dragged the year-to-date loss to -7.2 per cent.

The equities market was broadly negative last week, closing in the red in the first four sessions with a mild recovery on Friday.

The ASI dropped below 30,000bps last week. Analysts said the release of mostly unimpressive earnings results further soured sentiment in the market as significant losses across the banking, consumer goods, and industrial goods sectors dragged the performance of the market.

Activity level strengthened on Monday as volume and value traded rose by 13.4 per cent and 50.6 per cent to 455.875 million units and N5.26bn, respectively.

The top traded stocks by volume were Sterling Bank Plc (93.4 million units), Guaranty Trust Bank (78.3 million units) and Tripple Gee and Company Plc (60 million units), while GTB (N2.7bn), Zenith Bank Plc (N540.7m) and 11 Plc were the top traded stocks by value.

Performance across sectors was mostly negative as three of five indices closed in the red.

The banking and industrial goods indices led losers, shedding 2.15 per cent and 0.88 per cent, respectively, following sell-offs in Stanbic IBTC Holdings Plc, GTB, Dangote Cement Plc and First Aluminium Nigeria Plc.

The consumer goods index depreciated by 0.35 per cent following sell pressures in Guinness Nigeria Plc and Dangote Sugar Refinery Plc.

On the flip side, the insurance and oil and gas indices advanced by 0.20 per cent and 0.08 per cent, respectively, due to gains recorded in Mutual Benefits Assurance Plc, Niger Insurance Plc, Eterna Plc and 11 Plc.

Investor sentiment as measured by market breadth dropped to 0.4x from 1.2x recorded last Friday as 13 stocks advanced against 30 decliners.

The top five losers were Fidson Healthcare Plc, Tripple Gee, NPF Microfinance Bank Plc, Chi Plc and Mcnichols Plc, whose respective share prices shed 10 per cent, 9.09 per cent, 8.72 per cent, 7.41 per cent and 7.35 per cent.

The top five gainers were Mutual Benefits, Neimeth Pharmaceuticals Plc, Learn Africa Plc, Chams Plc and Eterna Plc, which gained 10 per cent, 9.80 per cent, 8.94 per cent, 8.33 per cent and 6.25 per cent, respectively.

Analysts at Afrinvest Securities Limited said, “In the near term, we expect to see bargain hunting activities due to the attractive entry prices of several fundamentally sound stocks in the market, although this may be short-lived in the absence of the much needed economic reforms to attract investors.”