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
Seplat Energy Plc will revive hundreds of Nigerian oil wells laying fallow after completing the acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil.
The company said it aims to lift oil output to about 200,000 barrels a day, a move that will help boost Nigeria’s oil production levels, as it aims to reach 2 million barrels per day next year.
The transaction, according to Seplat, “is transformative for Seplat Energy, more than doubling production and positioning the company to drive growth and profitability, whilst contributing significantly to Nigeria’s future prosperity.”
The completion of the Seplat-ExxonMobil deal has created Nigeria’s leading independent energy company, with the enlarged company having equity in 11 blocks (onshore and shallow water Nigeria); 48 producing oil and gas fields; 5 gas processing facilities; and 3 export terminals.
Recall that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in October approved the deal as part of a series of approvals, while it blocked Shell’s asset sale of up to $2.4 billion to the Renaissance consortium.
The acquisition of the entire issued share capital of MPNU adds the following assets to the Seplat Group: 40 per cent operated interest in OML 67, 68, 70 and 104; 40 per cent operated interest in the Qua Iboe export terminal and the Yoho FSO; 51 per cent operated interest in the Bonny River Terminal (‘BRT’) NGL recovery plant; 9.6 per cent participating interest in the Aneman-Kpono field; and approximately 1,000 staff and 500 contractors will transition to the Seplat Group.
MPNU adds substantial reserves and production to Seplat Energy; 409 million barrels of oil equivalent (MMboe) 2P reserves and 670 MMboe 2P + 2C reserves and resources as at 30 June 2024 and 6M 2024 average daily production of 71.4 kboepd (thousand barrels of oil equivalent).
Business Post reports that Seplat will be part of the payment this year, and will defer some to next year,
Speaking on the transaction, the Chairman of Seplat Energy, Mr Udoma Udo Udoma commended President Bola Tinubu for supporting this transaction and appreciated the support and diligence of the various ministries and regulators for all the work to reach a successful conclusion.
“We are delighted to welcome the MPNU employees to Seplat Energy. We are excited to begin our journey in a new region of the country, and we look forward to replicating the positive impacts we have achieved within our communities in our current areas of operations.
“Seplat’s mission is to deliver value to all our stakeholders, and we treasure the good relationships we have developed with the government, regulators, communities and our staff.”
On his part, the chief executive of Seplat Energy, Mr Roger Brown, described the acquisition as a major milestone, adding, “I extend my thanks to the entire Seplat team for their hard work and perseverance to complete this transaction.
“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I welcome them to the Seplat Energy Group.
“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world-class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximising value for all our stakeholders.
“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders”.
By Adedapo Adesanya
The National Pension Commission (PenCom) is projected to close the year with over N22 trillion in pension assets impacted by challenges like inflation and monetary policies.
This is according to PenCom Director-General, Mrs Omolola Oloworaran, at a press conference in Abuja on Thursday.
She said as of October 2024, the Contributory Pension Scheme (CPS) had 10.53 million registered contributors and pension fund assets worth N21.92 trillion.
Speaking at the conference-themed Tech-driven Transformation Shaping the Pension Landscape, which showcased PenCom’s strategic commitment to innovation, she said that the numbers reflected the agency’s unwavering commitment to fund safety, prudent management, and sustainable growth.
She explained that the pension environment was impacted by the wider economic challenges facing the country, noting that the sector battled multi-year high inflation, Naira devaluation, and the lingering effects of unorthodox monetary policies by the Central Bank of Nigeria (CBN).
Business Post reports that the apex bank hiked interest rates by 875 basis points this year alone to tackle persistent inflation which peaked at 33.8 per cent as of October.
She said that these challenges eroded the real value of pension funds and impacted contributors’ purchasing power.
“To address these issues, the commission has initiated a comprehensive review of its investment regulations.
“It is focusing on diversifying pension fund investments into inflation-protected instruments, alternative assets, and foreign currency-denominated investments.
“The goal is to safeguard contributor savings and ensure resilience against future economic volatility,” she said.
She restated the commission’s commitment to expanding pension coverage, particularly through the advanced micro-pension plan designed to encourage participation from the informal sector using technology.
“This initiative will make it easier for everyday Nigerians to save for retirement, aligning with our vision of inclusive growth and financial stability for all.
“The backlog in retirement benefits for retirees of the Federal Government’s Ministries, Departments, and Agencies (MDAs) will soon be settled.
“The federal government recently disbursed N44 billion under the 2024 budget to settle approved pension rights.
“We are collaborating with the Federal Government to institutionalise a sustainable solution to ensure retirees receive their benefits promptly, eliminating delays,” Mrs Oloworaran said.
She said that PenCom’s technology-driven transformation aimed to make the CPS more accessible, reliable, and sustainable.
“From data management to seamless contributions and regulatory supervision, we are paving the way for a future where the pension industry serves all Nigerians effectively,” she said,
Mrs Oloworaran also said that the e-application portal for pension clearance certificates has replaced the manual processes and enhanced the ease of doing business in the sector.
“Since its deployment, 38,528 pension clearance certificates have been issued. This initiative ensures compliance and secures the future of Nigerians working in organisations that interact with the government,” she said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.
As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.
However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.
In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.
But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.
When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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