Nigeria’s Equity Market Sheds N464bn Amid Profit-Taking
The nation’s equity market Monday opened the week bearish, shedding N464 billion. The downward trend followed profit-taking in the shares of GTCO, United Bank for Africa, Zenith, AccessCorp, Nascon, NGX group and others. Market capitalisation of listed equities declined by 1.24 per cent to N36.831 trillion from N37.295 trillion reported the previous day. The NGX also depreciated by 847.16 basis points to 67296.18 points from 68143.34 points traded on Friday. An analysis of the investment showed that Northern Nigeria Flour Mills Nigeria Plc led gainers table, appreciating by 9.96 per cent to N13.25 per unit, Oando Plc followed with a gain of 9.74 per cent to close at N8.45 per share, CWG increased by 9.0 per cent to close at N6.30 per share, NPF Micro Finance Bank added 8.20 per cent to close at N1.98 per share while RTBriscoe up by 7.32 per cent to close at N0.44 per unit. On the contrary, ETranzact, Nascon and NSL Tech topped losers’ chart, dropping by 10 per cent each to close at N9.00, N52.20 and N0.27 per share respectively. Dangote Sugar Refinery followed with a drop of 9.98 per cent to close at N57.75 per unit while Learn Africa declined by 9.86 per cent to close at N3.29 per unit. Investors traded 520.133 million shares valued at N8.334 billion in 9914 deals against 483.489 million shares worth N8.340 billion in 6660 deals. Transactions in the shares of United Bank for Africa led market activities with 75.932 million shares valued at N1.049 billion, AccessCorp followed with 57.668 million shares valued at N957.323 million, Transnational Corporation of Nigeria traded 53.724 million shares cost N331.528 million, Zenith Bank traded 43.128 million shares worth N1.523 billion while FBNHoldings exchanged 26.573 million shares valued at N480.793 million. Zenith Bank declares N15.70bn as interim dividend to shareholders Zenith Bank Plc has declared an interim dividend of N15.70 billion (representing N0.50 per share) to be paid to shareholders for the half year ended June 2023. This was disclosed in the company’s corporate action announcement to the Nigerian Exchange Limited (NGX) on Monday. The Board of Directors of the company proposed the payment of an interim dividend in the sum of N0.50kobo per ordinary share on the issued capital of 31,396,493,786 Ordinary Shares. At its 32nd Annual General Meeting (AGM) in May, shareholders of the bank unanimously approved the proposed final dividend payment of NGN2.90 per share. This brings the total dividend for the 2022 financial year to NGN3.20 per share, with a total value of NGN100.47 billion. The board of Zenith Bank Plc had earlier announced a delay in the release of its 2023 Half-Year (HY) financial results due to post-audit issues. According to the statement signed by the Company Secretary, Michael Osilama Otu, the delay in the publication of the Audited Interim Financial Statements for the Half Year ended June 30, 2023, is due to some outstanding post-audit issues. The bank said the results will be delivered on or before September 14, 2023. The statement reads: “Zenith Bank Plc (the Bank) wishes to notify its shareholders, the Nigerian Exchange Limited (the Exchange), and the investing public of a slight delay in the release of the Audited half-year financial reports by the Bank for the period ended June 2023. “The delay is to enable the bank to attend to some outstanding post-audit issues in the course of approval of the financial statements. “The Bank is, however, optimistic that the Audited half-year financial reports will be submitted to the Exchange on or before September 14, 2023, and regrets any inconveniences this delay might cause its esteemed stakeholders.
FG’s Fiscal Deficit To Further Decline In Q3, Q4 -MPC
Some members of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) have projected that the federal government’s fiscal deficit will continue to decline in the third and fourth quarters of 2023. Their projections are predicated on the recent efforts by the government to manage expenditures better and also improve oil and non-oil revenues. Their prediction contained in their various personal statements during the last MPC meeting, as posted on the CBN website. In his personal statement, the Permanent Secretary, the Federal Ministry of Finance, Budget, and National Planning, Aliyu Ahmed, said: “The fiscal deficit is expected to decline in the third and fourth quarters of 2023 on the back of recent efforts by the new government to manage expenditures better and also improve oil and non-oil revenues. “With expenditure reprioritization and fiscal wisdom at both the federal and state levels, there is an expectation that the government debt ratio may fall at least marginally by the end of 2023. “Speaking on the fiscal sector, Adenikinju Adeola, a member, explained that both government revenue and expenditure underperformed between January and May 2023. He explained that the Federal Government’s retained revenue stood at N1.67 trillion, lower than the pro-rata target of N1.96 trillion due to the underperformance of Federation Account Allocation Committee (FAAC) receipts and gross independent revenue. However, on the positive side, he stated: “Total FGN expenditure as of May 2023 was N4.76 trillion, 27.8 percent lower than the budget estimate of N6.606 trillion. The shortfall came mainly from allocations for debt service, interest on Ways and Means, and capital expenditure. “Overall budget deficit reduced by -18.15 percent in the first five months of 2023. “The underperformance of the budget is especially felt in the capital expenditures, thus impacting negatively on economic development”, he added. On his part, another member, Obadan Mike, noted that although the new government is making serious efforts to boost revenue generation, fiscal deficits and associated public debt accumulation will continue to elicit deep concerns. Meanwhile, the MPC members also called for a review of border closures to increase food supply in the country while expressing concern about the decline in growth of the agricultural sector in the first quarter of 2023. Adenikinju said, “The continuous closure of the borders should also be reviewed. This is to expand food and non-food supply to the economy and force down domestic prices, especially food. Also expressing concern about the declining growth in the agricultural sector, Ahmed said: “The decline in growth in the agriculture sector is particularly worrisome, given its role in food production and employment generation. “Targeted intervention by the fiscal and monetary authorities in the agriculture sector is crucial to ensuring medium- to long-term food security and price moderation. The recent initiative by the CBN to offload grains from the national strategic grain reserves to lower food prices could not have come at a more auspicious time. “There is also a need to leverage the African Development Bank (AfDB) Agro Pocket Wallet to support farmers in the production of grains and fertilizers.”
As profit taking persists, Nigeria’s equity market sheds N112bn
Trading activities on the floor of Nigerian Exchange (NGX) Thursday continued on a negative note, shedding N112 billion as profit taking by investors persisted in the market. Profit taking in the shares of Dangote Sugar, Dangote Cement, Nascon impacted on the market at the end of the trading session. Specifically, market capitalisation of listed equities declined by 0.30 per cent to N37.261 trillion from N37.373 trillion reported the previous day. The NGX All Share Index also depreciated by 204.17 basis points to 68082.11 points from 68286.28 points reported on Wednesday. Betaglass led gainers table, gaining 9.97 per cent to close at N51.85 per unit, Cadbury Nigeria Plc followed with a gain of 9.86 per cent to close at N15.60 per share, CWG gained 9.81 per cent to N5.26 per unit, Tantalizer gained 9.52 per cent to close at N0.46 per share, Guinea Insurance added 9.09 per cent to close at N0.36 per share. On the contrary, Morison Industry recorded the highest loss with 9.89 per cent to close at N2.55 per unit, Courtvellle Business Solutions trailed with a loss of 7.69 per cent to close at N0.60 per unit, Nascon dipped by 6.83 per cent to close at N56.60 per unit, RTBriscoe went down by 6.82 per cent to close at N0.41 per share while Wema Bank dipped by 6.42 per cent to close at N5.10 per share. Investors traded 378.089 million shares valued at N8.376 billion in 8106 deals against 378.654 million shares valued at N5.482 billion in 7671 deals. Transactions in the shares of Oando led market activities with 91.635 million shares valued at N678.965 million, Omatek trailed with account of 29.972 million shares valued at N19.207 million, Dangote Sugar Refinery traded 23.393 million shares valued at N1.483 million, Fidelity Bank exchanged 22.165 million shares cost N193.576 million, AccessCorp exchanged 20.803 million shares cost N361.865 million.
Naira Devaluation: Dangote, 8 others take N113.63bn hit
Dangote Cement led eight other companies on the NGX in foreign exchange losses recording a significant foreign exchange loss of N113.63 billion, representing a 179.47 per cent year-on-year increase, the highest in the past five years as a result of the devaluation of the Naira. The Naira went from N465/$ at the end of May 2023 to N756/$ in June 2023, resulting in a net exchange loss of N116.1 billion on third-party loans and payables within the Nigerian entities. While some companies experienced significant declines in some performance indicators, others performed relatively better. A review of the financial performance of Berger Paints, Beta Glass, BUA Cement, CAP, Dangote Cement, MEYER, Notore, and WAPC, reveals that among these companies, Dangote Cement, Notore, and BUA Cement, reported a combined foreign exchange losses of -N129.811 billion, while Beta Glass, CAP, and WAPCO reported an aggregate foreign exchange gain of N3.49 billion. However, when considering the cumulative impact of foreign exchange fluctuations, it led to an overall reduction of 8.19 per cent in their total pre-tax profit, which amounted to N372.573 billion in the first half of 2023 Dangote Cement led in foreign exchange losses recording a significant foreign exchange loss of N113.63 billion, representing a 179.47 per cent year-on-year increase, the highest in the past five years. According to the first half of 2023 financial notes, the net exchange loss on foreign-denominated transactions was primarily attributed to the sharp devaluation of the Nigerian Naira in June 2023. These losses had a direct effect on the decline in pre-tax profit, which decreased from N264.89 billion to N239.86 billion during the reviewed period. Notore also reported a substantial foreign exchange loss of N14.05 billion in the first half of 2023. Coupled with low revenue and a significant increase in finance costs, this contributed to a pre-tax loss of N38 billion, representing a 1,558 per cent decline. The company managed to generate revenue of N7.92 billion, a substantial decline of 68.97 per cent for the first half of 2023. BUA Cement reported a foreign exchange loss of N2.137 billion in the first half 2023, marking a significant year-on-year increase of about 103 per cent. Coupled with elevated interest expenses, this dampened pre-tax profit, resulting in only a marginal increase of 2.75 per cent to N76.425 billion when compared to the first half of 2022. WAPCO – Lafarge led the foreign exchange gainers, recording a N2.237 billion gain in foreign exchange. This contributed to a growth of 18 per cent in pre-tax profit. However, despite this positive performance, the company experienced a year-on-year decline of 5.16 per cent in profit after tax, primarily due to high-income tax expenses.
GTCO’s H1 profit before tax increases by 217%
Guaranty Trust Holding Company Plc, has reported a profit before tax of N327.4billion, representing an increase of 217.1 per cent over N103.2billion recorded in the corresponding period ended June 2 The group released its Audited Consolidated and Separate Financial Statements for the period ended June 30, 2023, to the Nigerian Exchange Group (NGX) and London Stock Exchange (LSE). The Group’s loan book increased by 22.8 per cent from N1.89 trillion recorded as at December 2022 to N2.32 trillion in June 2023, while deposit liabilities grew by 37.0 per cent from N4.61 trillion in December 2022 to N6.32 trillion in June 2023. The Group’s balance sheet remained well structured and resilient with total assets and shareholders’ funds closing at N8.5trillion and N1.2 trillion, respectively. Full Impact Capital Adequacy Ratio (CAR) remained very strong, closing at 24.7 per cent, while asset quality was sustained as IFRS 9 Stage 3 Loans improved to 4.6 per cent in June 2023 from 5.2 per cent December 2022, however, Cost of Risk (COR) closed at 3.7 per cent from 0.6 per cent in December 2022 owing to worsening macros which caused significant increase in ECL variables. The Group Chief Executive Officer of Guaranty Trust Holding Company Plc, Mr. Segun Agbaje, said; “Our half year audited results reflect the strong business fundamentals underpinning the GTCO franchise, the quality of our past decisions in future proofing our balance sheet for challenging times, and the sound practices that guide our day-to-day operations. “Despite the challenges in the business environment, notably inflationary pressures and exchange rate fluctuations, we are starting to see the gains in the transformation of our businesses following our transition to a Holding Company structure. Improved profitability and a solid performance across key metrics reflect efficiencies and justify the investments we continue to make in technology, product development, and our people.” “We recognise the impact prevailing economic and market conditions have on people and livelihoods and we remain committed to seeking better outcomes for our customers by ensuring that our products and service offerings support our customers and their businesses through their evolving realities, whilst also taking every opportunity to optimise stakeholder value,” he added. Overall, the Group continues to post one of the best metrics in the Nigerian Financial Services industry in terms of key financial ratios i.e., Pre-Tax Return on Equity (ROAE) of 61.4 per cent, Pre-Tax Return on Assets (ROAA) of 8.8%, Full Impact Capital Adequacy Ratio (CAR) of 24.7 per cent and Cost to Income ratio of 27.7 per cent. GTCO is a leading financial services group with banking operations in Nigeria, West Africa, East Africa, and the United Kingdom alongside new businesses in payment, funds management and Pension Fund Administration. Its leadership in the banking industry and efforts at empowering people and communities has earned it many prestigious awards over the years.
IADI–ARC appoints NDIC’s Bello Vice Chairperson
The International Association of Deposit Insurers, African Regional Committee (IADI-ARC), has named Mr. Bello Hassan, the Managing Director/Chief Executive of the Nigeria Deposit Insurance Corporation (NDIC), as its Vice Chairperson. The announcement came during the IADI-ARC Annual General Meeting (AGM) held recently in Dakar, Senegal. Bashir Alhassan Nuhu, Director of Communication & Public Affairs at NDIC, made the announcement on behalf of the organization on Monday in a press statement sent to NIGERIAN ANCHOR. IADI, which was established in May 2002, serves as the global standard-setting body for deposit insurance systems. It also acts as a platform for knowledge exchange, offering international conferences, workshops, attachments, capacity-building programs, and research and guidance on deposit insurance matters for its members. In pursuit of its mission, the Association develops core principles, standards, and guidelines aimed at improving the effectiveness of deposit insurance systems across various jurisdictions. Mr. Bello Hassan’s appointment as Vice Chairperson follows his election to the IADI Executive Council (EXCO) in October of the previous year during the IADI’s Annual General Meeting held in Buenos Aires, Argentina. The EXCO serves as the governing body of IADI, responsible for ensuring the Association’s smooth operations. The leadership of IADI-ARC highlighted that Mr. Bello’s inclusion in the Association’s EXCO and his subsequent appointment as Vice-Chairperson reflects the recognition of his remarkable contributions, unwavering commitment, and significant leadership in advancing deposit insurance practices in Africa and worldwide. The appointment signifies Nigeria’s growing prominence and influence within the global financial community, particularly in the field of deposit insurance.
Unclaimed dividends in capital market hits N190bn —SEC
The Securities and Exchange Commission (SEC) says that the unclaimed dividends figure in the nation’s capital market currently stands at N190 billion. Mr Lamido Yuguda, the Director-General of SEC, said this at the second post Capital Market Committee (CMC) media briefing in Abuja on Friday. He said the figure increased due to issues concerning identity management in the country. Yuguda also attributed the rising figure to multiple subscriptions by investors during banking consolidation and identity management. According to him, “we have legacy issues that have aggravated unclaimed dividends.” Yuguda, however, said the commission was working with the Nigeria Inter-Bank Settlement System (NIBSS), on the e-dividend portal. He added that the SEC was working with NIBSS to make changes to the electronic dividend portal currently going through some form of upgrading and repair. “We are working very hard to ensure we reduce the number of unclaimed dividends. “This is why we are upgrading the e-dividend portal with NIBSS to restore investors’ dividend and reduce unclaimed dividends. “We reiterate that every person, who has come to the capital market and invested money, should be able to get his dividends as and when due,” he said. On dollar denominated bonds listed on NGX, the director-general said it was not a problem as long as it was a corporate one. He said that the road ahead of the market was undeniably challenging but that the capital market would step forward in whatever way to lend its helping hand to the current economic reforms. “We introduced the Know Your Customer (KYC) requirement so that all information needed will be collated. “The market must make sacrifices to help drive the economic transformation that will change our nation’s fortunes for the better. “The Chairman informed the meeting that the Investments and Securities Bill (ISB) 2023 was under consideration by the 10th National Assembly. “The Bill aims to align regulations with the modern dynamics of the market and it is hoped that if passed into law, it will enable optimal contribution of the capital market to national development,” he said. The director-general said that market players were urged during the meeting to prioritise cyber-security measures to safeguard sensitive financial data and transactions. He lamented the trend where companies chose to de-list from the capital market. Also speaking, the Commissioner, Operations at SEC, Mr Dayo Obisan, said one of the major issues bedeviling the commission was for beneficiaries to get access to claim their dividends. “We keep putting our efforts to ensure that investors update their bank details, information and claim their dividends. “But we still have some of them who fill in details wrongly. “We at SEC are working very hard and we want to ensure bonuses get transferred to beneficiaries, capture everyone who is in the market so that our data is more robust. “We can be able to work effectively on reducing unclaimed dividends,” Obisan said.
Naira loses, exchanges at N773.42 at investors, exporters window
The naira depreciated against the dollar on Wednesday as it exchanged at N773.42 at the Investors and Exporters window. It lost by 0.35 per cent compared with N770.72 for which it exchanged for the dollar on Tuesday. The open indicative rate closed at N781.49 to the dollar on Wednesday. A spot exchange rate of N799.90 to the dollar was the highest rate recorded within the day’s trading before it settled at N773.42. The naira sold for as low as N738 to the dollar within the day’s trading. A total of 169.07 million dollar was traded at the investors and exporters window on Wednesday.
Again, equity market sheds N96bn
The local stock market closed trading on Thursday on a negative note, shedding N96 billion with the anticipated rise in exchange rate and fuel prices.The market capitalisation of listed equities declined further by 0.27 per cent to N35.273 trillion from N35.369 trillion reported the previous day.The decline led the benchmark index, NGX ASI, to witness a decline of 176.32 basis points, concluding at 64448.96 points from 64,625.28 points reported on Wednesday.An analysis of the investment showed that JohnHolt led gainers table in percentage terms, gaining 10 per cent to close at N1.32 per share, CWG followed with a gain of 9.76 per cent to close at N3.60 per share, Prestige insurance gained 8.33 per cent to close at N0.52 per unit, Cutix Plc added 8.00 per cent to close at N2.70 while Linkage Assurance gained 7.69 per cent to close at N0.98 per unit.On the contrary Guinness Nigeria Plc topped losers chart, dropping by 8.57 per cent to close at N0.32 per unit, RTBriscoe trailed with 8.16 per cent to close at N0.45 per unit, Chi Plc loss 7.61 per cent to close at N0.85 per share, SUNU Assurance dipped by 6.98 per cent to close at N0.80 per unit, Deep Capital declined by 6.67 per cent to close at N0.28 per share.The volume of trades increased by 28.63 million, representing 9.82 per cent as investors traded 320.346 million shares valued at N3.729 billion in 5176 deals against 291.714 million shares costing N7.432 billion in 6213 deals.Transactions in the shares of Fidelity Bank led market activities with 80.045 million shares valued at N595.543 million, Transnational Corporation of Nigeria followed with 34.268 million shares worth N137.206 million, United Bank for Africa traded 24.398 million shares cost N340.020 million , Universal Insurance traded 22.429 million shares worth N5.062 million , FBNHoldings exchanged 19.096 million shares cost N353.481 million.
NNPC secures $3bn loan from AFRIEXIM Bank to boost FX market, bolster naira
In a significant move, the Nigerian National Petroleum Corporation Limited (NNPCL) has entered into a substantial crude repayment loan agreement amounting to $3 billion with the esteemed AFRIEXIM Bank. This financial endeavor is set to play a pivotal role in the stabilization of the foreign exchange market and the support of the Nigerian currency, the naira. The NNPC Ltd., in collaboration with AfriEXIM bank, has formalized their commitment through the signing of a letter of commitment and a Termsheet for a crucial $3 billion crude oil repayment loan. This momentous event unfolded at the headquarters of the bank, situated in Cairo, Egypt. The loan’s provisions encompass immediate disbursement, thereby empowering NNPC Ltd. with the resources necessary to provide substantial backing to the Federal Government’s ongoing fiscal and monetary policy reforms. These reforms are meticulously crafted to achieve a fundamental goal: the stabilization of the exchange rate market. By securing this substantial loan, NNPC Ltd. has taken a substantial step towards reinforcing the Nigerian economy. A statement from the company on Wednesday read: “The NNPC Ltd. and AfriEXIM bank have jointly signed a commitment letter and Termsheet for an emergency $3 billion crude oil repayment loan. “The signing, which took place today at the bank’s headquarters in Cairo, Egypt, will provide some immediate disbursement that will enable the NNPC Ltd. to support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market.”