Economy
NASD Plc Suffers 50.1% Decline in Profit in 2019
By Adedapo Adesanya
The profit after tax of NASD Plc recorded a 50.1 per cent plunge in the 2019 financial year, closing at N45.1 million as against N90.4 million it ended in the 2018 fiscal year.
This information was contained in the company’s annual report, which also showed that the company recorded a lower profit before tax (PBT) of N36.1 million versus N62.0 million a year earlier, indicating a decline of 41.8 per cent.
Business Post reports that during the period under review, the amount paid as tax was low at N8.9 million as against N28.3 million in the previous year.
The breakdown showed that the company had a ‘Nil’ company income tax for 2019 (2018: nil) due to its carried forward unrelieved losses situation. The minimum tax has been computed as the company is liable to be assessed under the minimum tax law.
It, however, explained that education tax is not included as a result of the assessable loss situation.
NASD’s profit per share also took a slide to N10.14 from N20.34 while the company’s total liabilities and equity stood at N660.8 million compared to N617.9 million, indicating a rise of 6.9 per cent.
It said in the year, there was a drop in fees and commission by 3.2 per cent to N161.95 million from N167.38 million in the preceding period.
In terms of the company’s employees benefits and compensation costs, it rose by 27.4 per cent to N90.1 million from N70.7 million in the previous year.
The company saw N510,000 made on write-back no longer required in the year while N102.9 million was expended on other operating expenses whereas N92.3 million was published in 2018.
These spurred NASD Plc to end the year with an operating loss of N30.6 million compared to a gain of N4.3 million marked in the 2018 financial period.
There was, however, a rise in the interest income made on treasury bills, money market placements and bonds during the period; N65.7 million versus N57.7 million in 2018.
Other income (gains from asset disposal) raked in N890,000 compared to N529,000 recorded in the same period in 2018.
Speaking on the result, the Managing Director of NASD, Mr Bola Ajomale, explained that “the decrease in market activity experienced in 2019 is a sharp change in trend from what was witnessed in 2018 and was a direct result of a downturn in market activity as well as a reduction in the number of new securities admitted to the market.
“The continued decline in the country’s risk profile coupled with the sustained dominance of the fixed income sector of the market also contributed to investor apathy.”
However, he assured that, “NASD will continue to build confidence in the OTC market by working with issuers to improve their reporting and information disclosure.”
“Consistent with this, in 2019, new rules and policies were developed to identify and appropriately treat market infractions and disputes. In 2019, we also successfully implemented our Trade Guarantee Fund and got approval with SEC to execute Negotiated Deals on our market.
“As the market continues to grow, we shall not relent in increasing stakeholder confidence by ensuring an organised, transparent and efficiently run market,” he added.
Looking forward, Mr Ajomale said despite the disruptions brought about by the novel coronavirus pandemic, “new opportunities that are arising out of this situation and intend to remain versatile and flexible to maintain market operations while providing capital raise services to enterprises that now have an even more pronounced need for the capital market.”
By Dipo Olowookere
The last trading session of the week on the floor of the Nigerian Exchange (NGX) Limited ended on a positive note with a 0.26 per cent growth on Friday.
It was the first trading day after the two-day break observed on Wednesday and Thursday for Sallah celebrations by Muslims.
Market participants returned to Customs Street yesterday in high spirits, though keeping an eye on happenings in the macroeconomic environment.
This resulted in the market breadth index closing bearish after recording 32 price gainers and 33 price losers, implying weak investor sentiment.
Sovereign Trust Insurance and Zichis gained 10.00 per cent each to sell for N2.75 and N33.00 apiece, International Energy Insurance rose by 9.98 per cent to N4.52, McNichols grew by 9.85 per cent to N8.70, and Aradel Holdings increased by 9.59 per cent to N1,933.80.
Conversely, the trio of CAP, Austin Lax, and Premier Paints lost 10.00 per cent each to settle at N179.10, N3.96, and N33.75 apiece, LivingTrust Mortgage Bank decreased by 9.89 per cent to N4.01, and John Holt fell by 9.84 per cent to N16.95.
As for the performance of the key market sectors yesterday, the banking space shed 2.51 per cent, the consumer goods index depleted by 1.26 per cent, and the industrial goods sector tumbled by 0.05 per cent.
However, bargain-hunting raised the energy segment by 4.38 per cent and lifted the insurance counter by 0.86 per cent.
Consequently, the All-Share Index (ASI) closed higher by 646.63 points to 250,385.47 points from 249,738.84 points, and the market capitalisation improved by N415 billion to N160.509 trillion from N160.094 trillion.
A total of 1.2 billion stocks worth N43.4 billion exchanged hands in 93,626 deals during the session compared with the 564.1 million stocks valued at N27.2 billion traded in 65,666 deals in the preceding session. This showed that the trading volume, value, and number of deals went up by 112.73 per cent, 59.56 per cent, and 42.58 per cent, respectively.
Fidelity Bank ended the day as the busiest equity with a turnover of 483.0 million units valued at N8.7 billion, Access Holdings transacted 133.3 million units worth N3.2 billion, The Initiates sold 81.7 million units for N2.2 billion, Chams exchanged 43.9 million units valued at N173.8 million, and Dangote Sugar traded 28.4 million units worth N2.0 billion.
By Adedapo Adesanya
The Naira returned from a two-day break on Friday, May 29, stronger against the United States Dollar by 16 Kobo or 0.01 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX), trading at N1,375.25/$1 compared with N1,375.41/$1 it was exchanged on Tuesday.
The local currency also appreciated in the same market window against the Pound Sterling during the trading session by N3.62 to sell for N1,848.62/£1 versus N1,852.26/£1, but lost N2.16 against the Euro to close at N1,601.48/€1 compared with the previous rate of N1,599.32/€1.
The official forex market was closed on Wednesday and Thursday for the Sallah break.
A look at the GTBank FX desk showed that the Naira gained N4 against the Dollar yesterday to quote at N1,379/$1, in contrast to Tuesday’s closing value of N1,383/$1, and at the black market, it improved its value by N5 to N1,380/$1 versus the preceding session’s N1,385/$1.
Market analysts noted that the Nigerian Naira outlook remains stable, citing the latest round of FX inflows, which have lifted gross external reserves to $49.259 billion. Some projected that the domestic currency will close the first half of 2026 stronger as the Central Bank of Nigeria (CBN) continues to inject FX inflows into the official market.
Also supporting expected stability is the continued government signal of growth. In his third year in office, in a speech on Friday, President Bola Tinubu inherited severe economic and structural challenges in 2023, including exchange-rate distortions, which he said have since been reformed.
“Multiple exchange rate windows and forex arbitrage created massive distortions, with Nigeria losing more than N8 trillion over three years to rent-seeking and speculative practices.”
According to the president, the situation required urgent and courageous decisions to avert a deeper economic crisis and fiscal collapse.
In the cryptocurrency market, US-Iran ceasefire hopes have failed to pull Bitcoin (BTC) and Ethereum (ETH) higher, with the two largest cryptocurrencies losing almost 3 per cent as cooling spot bitcoin ETF inflows reinforced the pullback. BTC dropped 0.3 per cent to sell for $73,456.95, while ETH dipped 0.1 per cent to trade at $2,013.29.
Further, TRON (TRX) went down by 2.1 per cent to $0.3427, and Cardano (ADA) dipped 0.4 per cent to close at $0.2348.
On the other hand, Binance Coin (BNB) jumped 4.7 per cent to $667.52, Ripple (XRP) grew by 2.00 per cent to $1.34, and Solana (SOL) expanded by 0.1 per cent to $82.27, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
The crude oil market shrank by more than 2 per cent on Friday as traders awaited a possible ceasefire deal among the United States, Israel and Iran.
Brent crude settled at $92.05 a barrel after it lost $1.66 or 1.8 per cent, while the US West Texas Intermediate (WTI) finished at $87.36 a barrel, down $1.54 or 1.7 per cent.
The latest reports as of Friday suggest that the US and Iran are set to extend the ceasefire, which will include the reopening of the Strait of Hormuz. However, such an extension would need to be endorsed by U.S. President Donald Trump.
The US and Iran reportedly reached a tentative agreement on Thursday to extend a ceasefire and lift restrictions on shipping through the Strait of Hormuz.
The three-month war between the US and Iran has been marked by frequent chatter of an impending end to the conflict that would open the crucial Strait of Hormuz, used to transit one-fifth of the world’s oil and gas supply. Even with both sides suggesting an agreement was forthcoming, their characterisations of the deal were still somewhat different.
The closure of the waterway has driven energy prices sharply higher worldwide. Recent sessions have been volatile, with swings by as much as $6 for both benchmarks on conflicting signals over a potential reopening of the strait.
Traffic through the maritime chokepoint remains a small fraction of levels before the conflict, with analysts saying a reopening of the waterway would offer some immediate relief to the oil market, but a recovery is still uncertain.
Japan, which relies heavily on oil from the Middle East, last month registered a 66 per cent drop in crude oil imports compared with April last year.
Prices plunged by 19 per cent in May as traders and speculators bet on an extended ceasefire and an eventual US-Iran deal despite the biggest physical supply disruption in history. The slump in prices in May follows the biggest monthly surge in history in April, when oil rallied amid the worst supply disruption ever.
Traders spent most of the week looking beyond current supply shortages and focusing on the possibility that a ceasefire agreement could eventually bring barrels back to market, leading to selloffs.
US crude, petrol, and distillate stockpiles fell last week, according to the Energy Information Administration (EIA), as demand from refiners and consumers rose, while exports fell by 1.16 million barrels per day to 4.4 million barrels per day.
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