Economy
Eyebrows Raised as Key Investor in UAC Nigeria Sells 40 million Stocks
By Dipo Olowookere
News of a major shareholder in UAC of Nigeria Plc selling up to 40 million units of the company’s stocks recently has caused some raised eyebrows.
Some members of the investing community who spoke with Business Post on the matter said trades like this by a key investor of a firm like UAC Nigeria call for concern.
Last Wednesday, June 17, 2020, a “substantial shareholder” in UAC Nigeria, Blakeney LLP, freed its portfolio with 40 million units of the firm’s stocks.
According to a notice from the organisation, the shareholder sold the equities at a unit of N7, amounting to N280 million.
Since the global health crisis, Coronavirus, thickened in Nigeria in March 2020, the consumer goods sector of the economy, which UAC Nigeria also has a presence in, has been greatly hit.
Though the industry boomed in April when governments, corporate bodies, politicians, individuals and others distributed food items as palliatives to Nigerians because of a five-week lockdown imposed in Abuja, Lagos and Ogun States to suppress the spread of the virus, things took a worse turn when the restriction was eased in May.
In June, most businesses were allowed to operate, while citizens were told to use face masks whenever they were in public places.
But the buying power of consumers has made it difficult for the sector to boom like it did in April despite allowing them to go about their normal business activities.
Some firms have had to cut the salaries of workers and in other cases, the staff strength has been reduced, affecting the consumer goods industry, while those in few sectors yet to allowed to operate like the aviation and education sectors have not paid salaries to their employees.
“The volume of the shares sold by Blakeney is substantial and it is expected to make investors want to ask questions,” an active participant in the nation’s stock market, Mr. Adegbite Oloyede, submitted.
For Mrs Modupe Adediran, “Selling 40 million units of your holdings in a company says a lot about some things we retail investors do not know about. So, the worry is expected.”
“This is a normal situation and it is nothing new,” a stockbroker, who asked not to be named, said, but stressed that, “I will just advice investors to keep a close tab on the stock.”
Recall that last month, Business Post reported that Blakeney offloaded 10 million units of UAC Nigeria shares in two separate transactions.
In the first trade, the company sold 6 million stocks at N6.20 each, while for the second tranche, it sold 4 million units at about N6.21 each, raking about N62.0 million from the sales.
UAC Nigeria, a leading diversified company, operates in foods and beverage, real estate, paints and logistics sectors of the economy. Yesterday, the consumer goods index, was the heaviest loser at the market, going down by 1.38 percent.
At the market on Tuesday, June 23, 2020, UAC Nigeria was one of the nine price gainers, appreciating by 5 kobo or 0.71 percent to sell at N7.05 per unit.
By Adedapo Adesanya
Three securities lifted the NASD Over-the-Counter (OTC) Securities Exchange by 1.38 per cent on Friday, July 3, with the NASD Security Index (NSI) up by 58.80 points to 4,307.26 points from 4,248.46 points, and the market capitalisation closing higher by N35.30 billion to N2.585 trillion from N2.549 trillion.
The price gainers were led by 11 Plc, which expanded by N20.05 to close at N220.55 per share compared with the previous day’s N200.50 per share, FrieslandCampina Wamco Nigeria Plc increased by N5.36 to N151.82 per unit from N146.46 per unit, and Central Securities Clearing System (CSCS) Plc appreciated by N3.52 to N90.74 per share from N87.22 per share.
Yesterday, the value of transactions surged by 1,431.2 per cent to N160.1 million from the preceding session’s N10.5 million, and the volume of trades rose by 303.7 per cent to 1.8 million units from 440,653 units, while the number of deals decreased by 34.4 per cent to 21 deals from 32 deals.
Great Nigeria Insurance (GNI) Plc was the most traded stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 70.7 million units transacted for N4.9 billion.
GNI Plc was also the most traded stock by volume on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
By Dipo Olowookere
The losing streak on the Nigerian Exchange (NGX) Limited was halted on Friday after the bourse closed higher by 2.19 per cent at the close of trading activities.
The gains reported by Nigerian stocks were buoyed by renewed bargain-hunting by investors, which resulted in all the key sectors of Customs Street ended in the green territory.
The banking space rose by 2.78 per cent, the insurance counter appreciated by 1.26 per cent, the energy segment expanded by 0.36 per cent, the consumer goods index chalked up 0.06 per cent, and the industrial goods sector grew by 0.05 per cent.
Consequently, the All-Share Index (ASI) went up by 4,918.37 points to 229,240.34 points from 224,321.97 points, and the market capitalisation increased by N3.156 trillion to N147.103 trillion from N143.947 trillion.
Investor sentiment was bullish after 34 stocks ended on the price gainers’ chart and 18 stocks finished on the losers’ log, representing a positive market breadth index.
The quintet of The Initiates, Universal Insurance, DAAR Communications, Omatek, and Airtel Africa surged by 10.00 per cent to sell for N25.85, 88 Kobo, N1.65, N1.76, and N5,274.00, respectively.
On the flip side, International Energy Insurance lost 9.96 per cent to trade at N4.70, Meyer shed 9.95 per cent to close at N18.55, Veritas Kapital dropped 5.07 per cent to finish at N1.31, Fidelity Bank slipped by 2.17 per cent to N18.00, and Jaiz Bank crashed by 1.84 per cent to N28.12.
During the session, a total of 414.7 million equities worth N25.1 billion exchanged hands in 47,106 deals compared with the 855.4 million equities valued at N28.4 billion transacted in the preceding day in 51,609 deals, implying a contraction in the trading volume, value, and number of deals by 51.52 per cent, 11.62 per cent, and 8.73 per cent, respectively.
By Adedapo Adesanya
The Naira closed flat against the United States Dollar at N1,370.19/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, July 3.
However, it appreciated against the Pound Sterling in the same market segment by N2.29 to settle at N1,829.88/£1 compared with the previous day’s N1,832.17/£1, and marginally depreciated against the Euro by 4 Kobo to close at N1,568.32/€1 versus Thursday’s closing price of N1,568.28/€1.
At the parallel market, the Naira also traded flat against the US Dollar at N1,390/$1, and at the GTBank forex desk, it also maintained stability at N1,832/$1.
Market conditions improved shortly after the following minimal intervention by the Central Bank of Nigeria (CBN) through modest Dollar sales, which boosted liquidity and supported stronger trading activity.
Easing pressure came after half-year profit-taking tapered down, while continued stronger policy signals from the central bank add to near-term support.
Deals executed at the official market on Friday came in at $70.430 million across 82 interbank deals, from $85.517 million the previous day.
Meanwhile, the cryptocurrency market continued its recovery after June non-farm payrolls printed at 57,000, less than half the 113,000 consensus, sending the implied probability of a September Federal Reserve rate hike from 64 per cent to 54 per cent and dragging AI stocks sharply lower.
Weak labour data reduces inflationary pressure and, by extension, the Federal Reserve’s justification for holding rates elevated. That transmission mechanism is direct: lower rate-hike odds compress the opportunity cost of holding non-yielding assets like crypto.
Bitcoin regained the $62,000 mark after it rose by 1.3 per cent to $62,475.29.
Cardano (ADA) gained 6.6 per cent to trade at $0.1759, Ripple (XRP) appreciated by 3.5 per cent to $1.14, Ethereum (ETH) expanded by 2.4 per cent to $1,756.82, Dogecoin (DOGE) improved by 2.1 per cent to $0.0768, Solana (SOL) chalked up 1.8 per cent to $82.65, TRON (TRX) increased by 1.5 per cent to $0.3235, and Binance Coin (BNB) soared by 1.4 per cent to $569.12, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
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