Nigerian Stock Market Records N43bn Decline In Market Capitalization

Trading activities on the Nigerian Exchange took a negative turn on Thursday, resulting in a loss of N43 billion in market capitalization. This decline was attributed to price depreciation in the shares of Nestle Nigeria Plc, Zenith Bank, GTCO Plc, Transcorp, RTBriscoe, and 20 other listed companies. Market capitalization of listed equities declined by 0.12 percent, falling from N36.896 trillion to N36.853 trillion compared to the previous day. The NGX All Share Index also depreciated, dropping by 79.10 basis points to reach 67,335.30 points, down from the 67,414.40 points traded on Wednesday. In the daily trading results, Chellaram Plc led the gainers’ table with a 10 percent increase in share price, closing at N3.85 per share. Learn Africa followed with a gain of 9.97 percent, closing at N3.31 per share. Academy Press gained 9.94 percent, closing at N1.88 per share, while Chi Plc added 9.52 percent to close at N0.92 per share. Courtvellle Business Solutions also added 9.26 percent, closing at N0.59 per unit. On the contrary, ETranzact topped the losers’ chart with a 10 percent drop, closing at N7.20 per share. Ikeja Hotel trailed with a loss of 9.84 percent, closing at N2.75 per share. ABC Transport fell by 9.78 percent, closing at N0.83 per unit. Guinea Insurance dipped by 9.38 percent, closing at N0.29 per share, and RTBriscoe declined by 9.09 percent, closing at N0.40 per unit. The volume of trades increased significantly by 218.91 million shares, representing a 38.43 percent rise. Investors traded 788.536 million shares valued at N14.169 billion in 8,810 deals, compared to 569.626 million shares worth N8.697 billion exchanged the previous day in 8,404 deals. Transactions in the shares of United Bank for Africa led market activity, with 304.025 million shares valued at N4.892 billion. Sterling Bank followed with an account of 82.476 million shares worth N313.285 million. Chi Plc traded 46.031 million shares, costing N37.801 million, while Oando Plc traded 36.690 million shares, costing N383.746 million. Fidelity Bank exchanged 31.399 million shares, costing N261.255 million.

DMO auctions FGN bonds worth N360bn

The Debt Management Office (DMO), acting on behalf of the Federal Government of Nigeria (FGN), has recently conducted an auction for the subscription of four FGN bonds valued at a total of N360 billion for the month of August 2023. As outlined in the offer circular released by the DMO on Thursday, the first bond on offer is an April 2029 FGN bond, with a value of N90 billion and an interest rate of 14.55 percent per annum. This particular bond constitutes a 10-year re-opening of the existing issue. Similarly, the second bond available for subscription is a June 2033 FGN bond, also valued at N90 billion, and carrying an interest rate of 14.70 percent per annum, serving as a 10-year reopening. Furthermore, the DMO has presented a June 2038 FGN bond, valued at N90 billion, with an interest rate of 15.45 percent per annum. This bond represents a 15-year reopening of a previous issuance. The last offering is the June 2053 FGN bond, also valued at N90 billion, and featuring an interest rate of 15.70 percent per annum. This bond represents a 30-year reopening of the original issuance. “They qualify as securities in which trustees can invest under the Trustee Investment Act “They qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds amongst other investors. “They are listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange. “All FGN bonds qualify as liquid assets for liquidity ratio calculation for banks,” the DMO said.  All of the mentioned FGN bonds are available for subscription at a unit cost of N1,000, with a minimum subscription requirement of N50 million and subsequent subscriptions in multiples of N1,000. For bonds that are re-openings of previously issued bonds with fixed coupons, bidders are expected to pay a price corresponding to the yield-to-maturity bid that successfully clears the auction volume, along with any accrued interest on the instrument. Interest on these bonds is paid semi-annually, and the principal repayment is set as a bullet payment due on the maturity date. It’s noteworthy that FGN bonds enjoy the full backing of the Federal Government’s faith and credit, with their security secured by the general assets of Nigeria. These FGN bonds have multiple benefits, including qualification as securities in which trustees can invest under the Trustee Investment Act. They also fall under the category of government securities in accordance with the Company Income Tax Act and Personal Income Tax Act, qualifying for tax exemptions for pension funds and other investors. Additionally, these bonds are listed on both the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange. Furthermore, all FGN bonds are considered liquid assets for the calculation of liquidity ratios for banks. The DMO’s auction of these FGN bonds reflects the government’s continued efforts to manage its debt and financial obligations while providing investment opportunities for both institutional and retail investors.