Economy
39 Stocks Depreciate NSE Index by 2.48% in Four Trading Days
Dipo Olowookere
A total of 39 stocks trading on the Nigerian Stock Exchange (NSE) caused the All-Share Index (ASI) to depreciate by 2.48 percent to settle at 26,987.45 points in the four trading days last week.
The market opened for only four days in the week as a result of the public holiday declared by the federal government to celebrate the 59th anniversary of Nigeria’s independence from Britain in 1960.
The local stock market was mostly bearish for the week as investors stayed back to watch happenings from both the local and the global scenes, especially with the impeachment threat staring at President Donald Trump of the United States of America (USA) as well as activities on the global oil market, which is giving many investors serious concerns because of the price of the Brent crude, which fell below Nigeria’s benchmark of $60 per barrel in the week.
Shares in the oil and gas sector had a feel of this heat as they went down in the week at the domestic bourse by 2.25 percent.
CBN’s Fine Affects Banking Stocks
On the local scene, investors pondered on the action of the Central Bank of Nigeria (CBN) on 12 financial institutions, six of which are listed on the stock exchange. The dozen of banks were punished by the industry watchdog for failing to loan a certain amount of money in their custody to their customers as directed by the CBN.
In July 2019, the central bank had ordered lenders operating in the country to give 60 percent of their deposits to customers as loan so as to boost the economy.
The apex bank was hoping to use its loan policy to promote lending to the real sector of the economy so as to fast-track its recovery process after it slipped into recession over three year ago.
In the circular issued to the banks in July, the central bank had warned that failure do adhere to the 60 percent loan-to-deposit ratio would attract a sanction, which involves taking certain amount from their deposits to their cash reserves with the apex bank.
After the holiday, the CBN fined the 12 financial institutions the sum of N499.2 billion and this development caused selloffs in the banking space in the week, resulting into a 3.94 percent weekly loss.
Also, on the local scene, the persistent low purchasing power of Nigerians affected stocks in the consumer goods space at the market, leaving its barometer going down by 4.92 percent in the week.
Stock Performance In The Week
From the data harvested by Business Post on the NSE, Fidson Healthcare was the week’s heaviest loser as its stocks went down by 18.89 percent to close at N3.65 per share, while Ecobank followed with a loss of 14.61 percent to finish at N7.60 per unit.
UAC Nigeria fell by 14.38 percent to end at N6.55 per share, Africa Prudential depreciated by 9.97 percent to settle at N3.52 per unit, while Beta Glass declined by 9.96 percent to close at N53.80 per share.
At the other end, Continental Reinsurance shares went up by 20.11 percent to finish at N2.27 per unit, while Law Union and Rock Insurance followed with 12.82 percent appreciation to close at 44 kobo per unit.
Niger Insurance gained 10.00 percent to finish at 22 kobo per share, CAP improved by 9.89 percent to close at N25.55 per unit, while Caverton appreciated by 8.33 percent to settle at N2.60 per share.
In all, a total of 15 equities appreciated in price during the week, lower than 22 equities in the previous week, while 39 equities depreciated in price, lower than 42 equities in the previous week, with 112 equities remaining unchanged, higher than 102 equities recorded in the preceding week.
During the week, the market capitalisation also depreciated by 2.48 percent like the index to close and N13.137 trillion. Similarly, all other indices finished lower with the exception of NSE insurance and NSE industrial goods indices, which appreciated by 5.71 percent and 0.14 percent respectively, while the NSE ASeM index closed flat.
Activity Level In The Week
For the market turnover, a total of 660.7 million shares worth N9.2 billion were traded by investors in the week in 12,032 deals against the total of 1.1 billion shares valued at N16.7 billion that exchanged hands a week earlier in 14,717 deals.
A breakdown of the transactions showed that the financial services industry (measured by volume) led the activity chart with 458.2 million shares valued at N5.9 billion traded in 6,720 deals, contributing 69.35 percent and 64.27 percent to the total equity turnover volume and value respectively.
The conglomerates industry followed with 55.8 million shares worth N124.5 million in 545 deals, while the third place was occupied by construction/real estate sector with a turnover of 54.3 million shares worth N62.6 million in 135 deals.
Trading in GTBank Access Bank and FBN Holdings measured by volume accounted for 280.7 million shares worth N4.9 billion in 2,985 deals, contributing 42.49 percent and 53.43 percent to the total equity turnover volume and value respectively.
Other Transactions In The Week
Away from the stock market, investors traded a total of 3,015 units of Extended Traded Funds (ETFs) valued at N701,234.17 in the week in 16 deals compared with a total of 16,253 units valued at N1.103 million transacted the previous week in 13 deals.
For the bond market, a total of 4,250 units of Federal Government Bonds valued at N4.305 million were traded in the week in 6 deals compared with a total of 36,581 units valued at N37.504 million transacted a week earlier in 16 deals.
What to Expect This Week
Business Post returns that as investors prepare for the new week, they would be anticipating the return of bulls to the market, though happenings around don’t indicate this would occur.
At the moment, attention is focused on the decision of the United States Fed on whether it would lower interest rate, which is very much likely to happen. In addition, there would be huge expectations on the proposed talks between Washington DC and Beijing on the trade spat.
Further attention would be on oil, which rose slightly on Friday after enduring series of falls last week. Investors would hope to have things better in the week with news that Saudi’s Aramco has recovered from the attacks on its oil facilities few weeks ago by Yemen’s Iran-backed Houthi rebels.
On the local scene, there are more to worry about especially with the steady decline in the nation’s foreign reserves, which have fallen below $42 billion. This development is expected to put pressure on the Naira at the foreign exchange (forex) market this week.
By Adedapo Adesanya
Oil prices jumped early on Thursday as Iran declared the critical energy chokepoint, the Strait of Hormuz, closed after the US launched additional strikes against the Middle East oil producer.
Brent futures rose $1.48 or 1.59 per cent to $94.58 per barrel, and the US West Texas Intermediate (WTI) crude climbed $1.71 or 1.90 per cent to $91.74 a barrel.
Iran’s top joint military command announced the closure of the Strait of Hormuz on Thursday, including oil tankers and commercial ships, saying any vessel attempting passage will be shot at.
Market analysts noted that the renewed escalation in fighting prompted oil prices to rally in early morning trading.
On Wednesday, the US military said on X that commercial ships continue to transit in and out of the strait. It also said no US warships have been struck in the strait, after Iran’s state media reported US ships near the waterway were targeted by missiles and drones.
US forces began launching additional strikes against multiple targets in Iran on Wednesday, the latest in an escalating exchange of attacks that threaten to reignite a full-scale war, which was paused in early April when the two sides agreed to a fragile ceasefire.
Defence Secretary Pete Hegseth held a press briefing announcing further attacks on Iran, saying, “If we need to negotiate with bombs, we’ll negotiate with bombs.” US Central Command later described those attacks as targeting “Iranian military surveillance capabilities, communication systems, and air defence sites across Iran.”
In response to the attacks, Iran’s top joint military command then announced that the Strait was closed to all shipping.
President Donald Trump said the strikes would stop shortly, but that they would continue if Iran’s leaders did not sign an agreement with the US immediately.
Iran’s months-long blockade of the strait, which normally carries a fifth of global oil and gas shipments, has kept oil prices elevated.
The latest exchange of strikes between the US and Iran marks the most significant escalation in the conflict since both countries agreed to a fragile ceasefire in April. Since then, oil inventories have drained dramatically, and no tangible breakthroughs have been announced.
Crude oil inventories in the US decreased by 7.2 million barrels during the week ending June 5, according to new data from the Energy Information Administration (EIA). The EIA’s data release follows figures that were released by the American Petroleum Institute (API) a day earlier, which reported that crude oil inventories saw a draw of 9.119 million barrels in the period.
By Dipo Olowookere
A marginal 0.06 per cent was recorded by Customs Street at the close of business on Wednesday, extending the dominance of the bulls for another trading session.
The uptick printed by the Nigerian Exchange (NGX) Limited was despite weak investor sentiment after reporting 30 price gainers and 36 price losers, representing a positive market breadth index.
Livestock Feeds gained 10.00 per cent to close at N9.35, Deap Capital expanded by 9.86 per cent to N5.35, Abbey Mortgage Bank appreciated by 9.78 per cent to N12.35, Vitafoam grew by 8.25 per cent to N210.00, and FTN Cocoa chalked up 6.54 per cent to finish at N9.45.
On the flip side, Neimeth lost 10.00 per cent to trade at N9.00, International Energy Insurance slipped by 9.92 per cent to N7.90, John Holt shrank by 9.73 per cent to N13.45, Union Homes REIT declined by 8.56 per cent to N70.00, and eTranzact went down by 8.06 per cent to N16.55.
Though activity level contracted yesterday, it remained on the high side, as market participants transacted 1.2 billion equities worth N38.8 billion in 54,193 deals compared with the 1.3 billion equities valued at N57.9 billion traded in 59,956 deals on Tuesday, indicating a shortfall in the trading volume, value, and number of deals by 7.69 per cent, 32.99 per cent, and 9.61 per cent, respectively.
Sterling Holdings sold 565.3 million shares valued at N4.5 billion to emerge as the busiest during the session. FCMB transacted 122.1 million equities for N1.5 billion, Access Holdings sold 49.5 million stocks worth N1.3 billion, Jaiz Bank exchanged 34.9 million shares valued at N313.8 million, and Universal Insurance traded 32.4 million stocks worth N35.6 million.
Business Post reports that the banking and industrial goods sectors respectively lost 0.79 per cent and 0.09 per cent yesterday as a result of profit-taking.
However, the consumer goods index rose 0.42 per cent, the energy counter increased by 0.14 per cent, and the insurance segment improved by 0.03 per cent due to bargain-hunting.
As a result, the All-Share Index (ASI) went up by 154.59 points to 244,852.21 points from 244,697.62 points, and the market capitalisation soared by N99 billion to N157.043 trillion from N156.944 trillion.
By Aduragbemi Omiyale
A strategic non-equity capital of N2 billion has been pumped into one of Nigeria’s emerging integrated agribusiness companies, Zichis Agro Allied Industries Plc.
Chilla Entertainment is one of the promoters of Zichis. The capital injection reaffirms the investor’s confidence in the company’s vision, growth prospects, and long-term value creation strategy.
In a note to the Nigerian Exchange (NGX) Limited, the funds will be a long-term liability in the company’s balance sheet to be redeemed at a future date in terms of debt conversion to equity during a public offer or rights issues.
It is designed to transform Zichis into one of Nigeria’s leading agro-industrial enterprises with a fully integrated value chain spanning feed production, poultry farming, palm cultivation, and agro-processing.
The newly injected capital will primarily be deployed towards expanding the firm’s operational capacity and strengthening its working capital position.
Key areas of investment include a significant increase in poultry production capacity, strengthening of the company’s integrated livestock value chain, and enhancement of operational efficiency and output levels.
In addition, the N2 billion would be used to increase the procurement of raw materials to support higher production volumes, grow the supply chain for the organisation’s feed mill operations, and position the business to meet growing demand within Nigeria’s livestock and poultry sectors.
Also, Zichis will accelerate the cultivation of its newly acquired 2,000-acre agricultural land in Ogun State to significantly increase its agricultural asset base and future revenue-generating capacity.
Zichis is strategically positioning itself to capitalise on these opportunities through its diversified agribusiness model, expanding production footprint, and disciplined execution strategy.
The endgame is to enhance shareholder value, expand operational capacity, build sustainable competitive advantages, and deliver long-term returns to investors.
Recently, the board and management visited the Nigerian Institute for Oil Palm Research (NIFOR) in Edo State for a strategic partnership on the acquisition of high-yield oil palm seedlings and the implementation of modern cultivation techniques across its expanding palm estate.
This collaboration is expected to enhance productivity, improve long-term yields, and support the company’s objective of becoming a major participant in Nigeria’s growing palm oil value chain.
Zichis reaffirmed its commitment to maintaining the highest standards of corporate governance, transparency, accountability, and regulatory compliance.
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