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Economy

NGX Records Low Weekly Turnover on Weak Appetite for Stocks

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NGX Financial Inclusion

By Dipo Olowookere

The appetite for stocks waned last week on the floor of the Nigerian Exchange (NGX) Limited, leading to a lower trading volume as investors reconsider their exposure to high-risk investments.

A total of 705.6 million shares worth N12.850 billion exchanged hands in 22,124 deals in the week compared with the 1.546 billion shares worth N16.289 billion transacted a week earlier in 23,873 deals.

It was observed that GTCO, Zenith Bank and FBN Holdings were the most attractive equities during the week, pulling 173.852 million units valued at N3.073 billion in 4,324 deals, accounting for 24.64 per cent and 23.91 per cent of the total trading volume and value respectively.

A further breakdown indicated that financial stocks dominated the activity chart with the sale of 442.525 million units valued at N4.345 billion in 9,995 deals, contributing 62.71 per cent and 33.81 per cent to the total trading volume and value respectively.

Consumer goods equities followed with 82.126 million units worth N2.176 billion in 3,875 deals, while conglomerates shares traded 51.083 million units worth N242.084 million in 694 deals.

Amid the weak trading activity, the All-Share Index (ASI) and the market capitalisation appreciated by 0.70 per cent and 0.72 per cent respectively to 50,722.33 points and N27.358 trillion.

Similarly, all other indices finished higher with the exception of the main board, insurance, industrial goods and sovereign bond indices, which depreciated by 1.16 per cent, 0.37 per cent, 5.76 per cent and 0.07 per cent while ASeM index closed flat.

Japaul recorded the biggest price increase as its value rose by 47.83 per cent to 34 Kobo, Honeywell Flour leapt by 36.10 per cent to N2.79, PZ Cussons grew by 20.59 per cent to N10.25, Courteville expanded by 17.50 per cent to 47 Kobo, while Caverton improved by 17.00 per cent to N1.17.

However, McNichols was the heaviest price loser, declining by 18.68 per cent to 74 Kobo, Learn Africa lost 15.38 per cent to trade at N2.20, BUA Cement went down by 15.15 per cent to N58.80, University Press fell by 9.79 per cent to N2.12, while Neimeth depreciated by 9.68 per cent to N1.40.

In the five-day trading week, a total of 41 stocks gained points, higher than 11 stocks of the previous week, while 22 stocks lost weight, lower than 53 stocks of the preceding week, with 93 stocks closing flat, higher than 92 stocks of the earlier week.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Economy

NGX All-Share Index Outperforms Inflation Over Three Years

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All-Share Index

The 3-year trailing performance of the All-Share Index (ASI) of the Nigerian Exchange (NGX) Limited surpasses the average inflation during the same period.

The annual inflation measured by the Consumer Price Index (CPI) released in September by the National Bureau of Statistics (NBS) was 20.52 per cent in August 2022.

Meanwhile, the NGX ASI, a market capitalisation weighted index of all companies listed on the NGX’s platform, had a year-to-date performance of 15.68 per cent during the same period. This could be misleading about the market performance until you view it through a longer-term lens.

British Economist, Benjamin Graham, made a quote popularly used by Warren Buffett, the Fund Manager of Berkshire Hathaway Inc and widely regarded as the best living investor: “Markets are a voting machine in the short term, and a weighing machine in the long run.” On a 3-year trailing basis, the NGX ASI has outperformed the CPI average in the same period, ensuring that investors with a longer-term hold on their investments remain in the positive region.

Analysis of data of closing prices gathered from the NGX’s website showed that the index has a 3-year moving average of 22.97 per cent, compared to an inflation average of 15.72 per cent.

The year 2022 has been a slow year for global stocks due to volatility resulting from the hiking of interest rates by central banks in the United States and Europe amidst inflationary pressures.

The NGX ASI’s 15.62% YTD return is a significant positive performance compared to the US S&P 500, which has plunged by 22.46% or the FTSE 100, which has declined by 7.68%, according to Google Finance. The local bourse has exhibited resilience and insulated investors from negative return on investment over three years.

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Economy

Laolu Martins Was Minority Shareholder of Bukka Hut—Management

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Bukka Hut Laolu Martins

By Modupe Gbadeyanka

The management of an online restaurant in Nigeria, Bukka Hut, has clarified that one of its late directors, Mr Laolu Martins, was a minority shareholder in the company.

On Wednesday, it was reported that the deceased breathed his last in Lagos. He was said to have co-founded the firm with Mr Rasheed Jaiyeola, who is the Chief Executive Officer.

The deceased was reportedly invited to join the firm by Mr Jaiyeola, who jointly owns majority shares of the company with his wife and sister.

Mr Jaiyeola and Mr Martins were co-owners of the Nigerian International Securities Limited (NISL) before the former resigned from his position as director to focus on Bukka Hut in 2016.

According to the statement from the organisation, Mr Jaiyeola established Bukka Hut but only invited the deceased and two others to invest in the eatery when it was established.

“To clarify, Rasheed Jaiyeola is the founder/CEO of Bukka Hut, a proudly Nigerian brand he built from inception in August 2011 from one outlet to 24 outlets comprising of restaurants, lounges and suya and grill spots, and a learning facility, BH Academy, as at today. He jointly owns the majority shares of the company with his wife and sister.

“Bukka Hut is not a one-man business as there are two other shareholders/directors, but they are not involved in the daily management of the business.

“Rasheed and the late Olaolu Martins were co-owners of Nigerian International Securities Lid (NISL), and naturally, Laolu was one of the three people he invited to invest in Bukka Hut when he founded it in 2011; Rasheed resigned from NISL as a director in 2016 to focus solely on building Bukka Hut while Olaolu remained the MD/CEO of NISL and its related businesses,” the statement explained.

Mr Martins was reported to have died from suicide, but fresh information revealed that he slumped at Lenox Mall after a cardiac arrest and was taken to a hospital in Lekki, where he passed on.

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Economy

Usman Laments Nigeria, Saudi Arabia Trade Volume of $5m

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trade volume of $5m

By Aduragbemi Omiyale

The president of the newly-establishment Nigeria-Saudi Arabia Chamber of Commerce, Industry, Mines and Agriculture, Mr Ibrahim Usman, has lamented the low trade volume between both countries despite their historical relationship.

Mr Usman expressed this frustration when he visited the Minister of Information and Culture, Mr Lai Mohammed, at his office in Abuja.

He said at the moment, the trade volume between Nigeria and Saudi Arabia is about $5 million, promising to deepen the relations between the two countries.

“And whereas many Saudi investors are looking out for profitable investment windows in friendly countries like Nigeria, our businesses have been unable to capitalise on such opportunities due to lack of an organised, reliable, safe and very secure private sector platform like a chamber of commerce,” he said.

Mr Usman said a 60-member inter-ministerial delegation from Saudi Arabia will be in Nigeria next week for the second session of the Nigeria-Saudi Arabia Joint Commission, which will further create opportunities for the chamber to set up trade missions.

On his part, Mr Mohammed praised his guest for his effort to establish the organisation after over 10 years of trial, saying he has proven himself as a man of vision and deep conviction.

“Clearly from your presentation, it’s clear that the major objective is to change the narrative and ensure that the relations between Saudi Arabia and Nigeria should not be seen just from the narrow prism of Hajj and Umrah pilgrimage, but from the prism of two very important nations of the world creating a bridge through better cooperation for the two countries and their citizens,” the Minister said.

Mr Mohammed described the chamber as a clearing house for proposals from business people from the two countries in order to open new vistas for trade opportunities.

He said the absence of such a chamber has led to the decline in the volume of trade and also bred trust deficit between business people from the two countries.

“The absence of this vehicle has led to loss of businesses between the two countries and it has also aggravated the trust deficit between them,” he said.

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