Economy

How Stock Market Investors ‘Pocketed’ N916bn During Lockdown—Analysis

Published

5 years ago

08/05/2020

Dipo Olowookere

By Dipo Olowookere

**As Market Recorded 15 Gains, 8 Losses During Period

When on Sunday, March 29, 2020, President Muhammadu Buhari announced in a nationwide broadcast that activities and offices in Abuja, Lagos and Ogun State would be totally shut down from the next day except for those rendering essential services, many thought the stock market would be badly affected.

The outcome of the Nigerian Stock Exchange (NSE) on Monday, March 30, 2020, confirmed the fears of many about this as on the first day of the lockdown, the market went down by 2.43 percent.

Though the trading floor of the bourse remained closed, the management of the exchange activated its business continuity plan to allow stockbrokers and investors trade remotely using electronic devices.

The next day, the market fell by 0.14 percent and prices were trading low, and the next day, which was April Fool’s Day, another loss was recorded, this time, by 0.94 percent.

When the next day the market appreciated by 0.10 percent, some analysts said it would be short-lived and they guessed right because at the next trading session, the market returned to its familiar territory, losing 0.13 percent on the last trading session of that week.

When activities resumed the next Monday, investors were greeted with a 2.02 percent loss and for some traders, they quickly positioned themselves by buying equities at cheap prices with the hopes of selling high when things normalise probably after the lockdown or when vaccine for the COVID-19, which caused the initial stay-at-home order, is found by scientists.

But Business Post observed that for the next seven consecutive sessions, the market was acting like it was on steroids, closing in the green territory until it was halted on April 20 and 21, 2020.

On April 22, it closed bullish, but slipped the next day by 1.36 percent, before staging a comeback from April 23 till the last day of the lockdown on May 4, 2020.

Many have wondered why the stock market remained bullish despite the economy struggling for life as a result of the coronavirus pandemic.

Few days ago, Business Post attributed the sudden rise in the market to foreign portfolio investors choosing to reinvest their funds in the local market when they could not take away their trapped Dollars out of the country because of the stoppage of forex sales to dealers at the Investors and Exporters segment of the market.

From Business Post’s analysis, there were a total of 23 trading sessions from when the lockdown became effective in Nigeria till it was lifted by President Buhari.

It was observed that of the 23 trading days, the market recorded 18 gains and eight losses. Putting this into percentage, bulls dominated by 76 percent, while the bears managed only 24 percent.

During the 23 trading days, the All-Share Index (ASI) appreciated by 1,759.07 points to 23,089.86 points from 21,330.79 points, while the market capitalisation increased by N916 billion to N12.033 trillion from N11.117 trillion.

Since the movement cessation was eased, the market has remained bullish, closing higher at the close of transactions on Thursday.

However, as at the time of filing this report, the market was down by 1.20 percent.

Economy

Aradel Holdings Acquires Equity Stake in Chappal Energies

Published

4 hours ago

11/12/2024

Aduragbemi Omiyale

By Aduragbemi Omiyale

A minority equity stake in Chappal Energies Mauritius Limited has been acquired by a Nigerian energy firm, Aradel Holdings Plc.

This deal came a few days after Chappal Energies purchased a 53.85 per cent equity stake in Equinor Nigeria Energy Company Limited (ENEC).

Chappal Energies went into the deal with Equinor to take part in the oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.

Since production started in 2008, the Agbami field has produced more than one billion barrels of oil, creating value for Nigerian society and various stakeholders.

As part of the deal, Chappal will assume the operatorship of OML 129, which includes several significant prospects and undeveloped discoveries (Nnwa, Bilah and Sehki).

The Nnwa discovery is part of the giant Nnwa-Doro field, a major gas resource with significant potential to deliver value for Nigeria.

In a separate transaction, on July 17, 2024, Chappal and Total Energies sealed an SPA for the acquisition by Chappal of 10 per cent of the SPDC JV.

The relevant parties to this transaction are working towards closing out this transaction and Ministerial Approval and NNPC consent to accede to the Joint Operating Agreement have been obtained.

“This acquisition is in line with diversifying our asset base, deepening our gas competencies and gaining access to offshore basins using low-risk approaches.

“We recognise the strategic role of gas in Nigeria’s energy future and are happy to expand our equity holding in this critical resource.

“We are committed to the cause of developing the significant value inherent in the assets, which will be extremely beneficial to the country.

“Aradel hopes to bring its proven execution competencies to bear in supporting Chappal’s development of these opportunities,” the chief executive of Aradel Holdings, Mr Adegbite Falade, stated.

Economy

Afriland Properties Lifts NASD OTC Securities Exchange by 0.04%

Published

7 hours ago

11/12/2024

Adedapo Adesanya

By Adedapo Adesanya

Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.

As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.

But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.

The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.

During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.

However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.

Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc 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.

Economy

Naira Trades N1,542/$1 as FX Speculators Dump Dollars in Panic

Published

8 hours ago

11/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The Naira continued to appreciate on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), gaining 0.7 per cent or N10.23 on Tuesday, December 10 to trade at N1,542.27/$1 compared with the preceding day’s N1,552.50/$1.

The Central Bank of Nigeria (CBN)-backed Electronic Foreign Exchange Matching System (EFEMS) platform introduced to tackle speculation and improve transparency in Nigeria’s FX market has been attributed as the source of the Naira’s appreciation.

Speculators holding foreign currencies, particularly the US Dollar, have seen the value of their money drastically drop due to the appreciation of the local currency. This is forcing them to dump greenback into the system and take the domestic currency alternative- a move that has seen available FX increase.

Equally, the domestic currency improved its value against the Pound Sterling in the official market during the trading day by N6.81 to sell for N1,955.12/£1 compared with Monday’s closing price of N1,961.93/£1 and against the Euro, it gained N10.84 to close at N1,613.00/€1, in contrast to the previous day’s rate of N1,623.84/€1.

Data from the FMDQ Securities Exchange showed that the value of forex transactions significantly increased yesterday by $228.85 million or 257.2 per cent to $401.17 million from the preceding session’s $112.32 million.

However, in the parallel market, the Nigerian currency weakened against the US Dollar on Tuesday by N5 to settle at N1,625/$1 compared with the previous day’s value of N1,620/$1.

In the cryptocurrency market, Dogecoin (DOGE) lost 4.8 per cent to sell at $0.39116, Litecoin (LTC) depreciated by 3.3 per cent to trade at $110.25, Binance Coin (BNB) went south by 2.3 per cent to $681.44, Ethereum (ETH) dropped 1.6 per cent to finish at $3,671.08, and Cardano (ADA) slid by 0.5 per cent to $0.8837

Conversely, Ripple (XRP) jumped by 5.4 per cent to $2.23 amid a continued shift for the coin with its parent company seeing the benefits of a crypto-friendly regulatory environment for US-based companies.

XRP is closely related to Ripple Labs, a high-profile payments company targeted by the SEC in 2020 on allegations of selling the token as a security to U.S. investors. Ripple fully cleared a long-drawn court case in 2024.

Further, Solana (SOL) expanded by 0.8 per cent to $219.75, Bitcoin (BTC) grew by 0.4 per cent to $97,446.95, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.