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Economy

Nigerian Bourse Shrinks 6.67% as Investors Panic Over Scary Economic Forecast

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nigerian bourse

By Dipo Olowookere

The Nigerian bourse fell by 6.67 per cent week-on-week last week after 29 equities came under heavy selling pressure caused by macroeconomic uncertainty.

Last week, investors were faced with a scary economic forecast from Moody’s, which raised doubts over the ability of Nigerian banks to meet their obligations due to the foreign exchange (forex) crisis in the country.

The global rating agency later downgraded the rating of Nigeria over concerns that the government would find it difficult to boost its earnings despite the price of crude oil rising in the global market.

Traders of stocks at the Nigerian Exchange (NGX) Limited reacted to these fears last week, as they quickly trimmed their exposure in the asset class so as not to get their fingers burnt.

Data showed that the All-Share Index (ASI) and the market capitalisation depreciated by 6.67 per cent to 44,396.73 points and N24.182 trillion, respectively.

Similarly, all other indices finished lower except NGX CG, banking, pension, NGX AFR bank, NGX AFR Div Yield, NGX MERI growth, NGX MERI Value, and industrial indices, which appreciated by 0.17 per cent, 0.15 per cent, 0.58 per cent, 2.10 per cent, 2.45 per cent, 1.22 per cent, 3.12 per cent, and 3.22 per cent, apiece, as the ASeM, growth and sovereign bond indices closed flat.

Business Post reports that Customs Street printed 33 price gainers, 29 price losers, and 95 price flatters in the week, in contrast to the 25 price gainers, 24 price losers and 108 price flatters recorded the earlier week.

Airtel Africa was the worst-performing stock as its value went down by 27.10 per cent to N1,312.20, NEM Insurance lost 9.98 per cent to trade at N4.42, Beta Glass also depreciated by 9.98 per cent to N41.50, Royal Exchange fell by 9.78 per cent to 83 Kobo, and MRS Oil lost 9.76 per cent to close at N12.95.

The best-performing stock for the week was Academy Press, which rose by 11.45 per cent to N1.46, Fidelity Bank gained 10.14 per cent to sell for N3.80, United Capital appreciated by 10.13 per cent to N12.50, BUA Cement improved by 9.73 per cent to N62.00, and PZ Cussons stretched by 9.52 per cent to N9.20 per cent.

In the five-day trading week, traders bought and sold 938.020 million shares worth N16.701 billion in 15,700 deals as against the 491.815 million shares worth N11.922 billion transacted in 14,350 deals a week earlier.

Financial equities dominated the activity chart with 501.278 million units valued at N5.080 billion carried out in 8,279 deals, accounting for 53.44 per cent and 30.42 per cent of the total trading volume and value, respectively.

ICT stocks trailed with 316.347 million units valued at N8.729 billion executed in 1,249 deals, while energy shares recorded the sale of 28.244 million units worth N983.561 million in 846 deals.

A breakdown indicated that CWG, GTCO and Fidelity Bank attracted most of the transactions, with 490.324 million units worth N2.905 billion traded in 2,860 deals, contributing 52.27 per cent and 17.39 per cent to the total trading volume and value, respectively.

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

Economy

Honeywell Flour, MTN, Others Pull Market Back by 0.01%

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Honeywell Flour

By Dipo Olowookere

The depreciation printed by the shares of Honeywell Flour, MTN Nigeria, Ecobank and 10 others pulled back the Nigerian Exchange (NGX) Limited from the bulls’ territory into the danger zone by 0.01 per cent on Thursday.

It was the first trading session in December, and the stock market could not sustain the positive moment it recorded on the last day of the previous month due to the selling pressure on the equities mentioned above, though investor sentiment remained strong.

According to data from the bourse, the market breadth was positive yesterday as there were 15 price advancers and 13 price decliners led by Honeywell Flour, which dropped 7.89 per cent to trade at N2.10. RT Briscoe went down by 7.41 per cent to 25 Kobo, Wema Bank declined by 5.45 per cent to N3.12, FCMB contracted by 4.18 per cent to N3.21, and Cutix retreated by 2.84 per cent to N2.05.

On top of the gainers’ log was UPDC REIT, which improved its share value by 9.09 per cent to N3.00, McNichols rose by 8.93 per cent to 61 Kobo, Japaul jumped by 7.41 per cent to 29 Kobo, Nigerian Breweries 7.14 per cent to N45.00, and Royal Exchange grew by 4.76 per cent to 66 Kobo.

Yesterday, investors transacted 172.9 million shares valued at N2.8 billion in 3,073 deals compared with the 107.0 million shares valued at N1.3 billion traded in 3,227 deals in the midweek session, representing a decline in the number of deals by 4.77 per cent, an increase in the trading volume by 61.55 per cent, and a surge in the trading value by 115.63 per cent.

The increase in the market turnover was driven by the 49.8 million shares of FCMB traded by investors during the session. Courteville traded 16.9 million stocks, Access Holdings sold 12.0 million equities, UBA traded 10.8 million shares, and Zenith Bank exchanged 9.8 million shares.

Business Post reports that the insurance and energy counters went down by 0.12 per cent and 0.08 per cent, respectively, while the banking and consumer goods sectors went up by 2.16 per cent and 0.77 per cent apiece, with the industrial goods space closing flat.

At the close of trades, the All-Share Index (ASI) receded by 3.40 points to 47,656.64 points from 47,660.04 points, and the market capitalisation retreated by N2 billion to N25.957 trillion from N25.959 trillion.

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Economy

Ecobank Q3 Earnings Swell Amid 12% Jump in Non-Interest Income

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Ecobank non-interest income

By Dipo Olowookere

In the third quarter of 2022, Ecobank Transnational Incorporated (ETI) improved its gross earnings by 11 per cent to N761.3 billion from N686.8 billion in the same period of last year, with interest income growing by 9 per cent to N485.8 billion from N445.1 billion, and interest expense surging by 8 per cent to N174.2 billion from N160.7 billion.

In the period under consideration, fee and commission income expanded by 15 per cent to N165.5 billion from N144.0 billion, driven by higher cash management and related fees, as well as more card management fees, which offset the shortfall in other fees and portfolio and other management fees.

Business Post reports that bank charges, brokerage fees paid, and other fees paid by the lender triggered a 41 per cent increase in the fee and commission expense by Ecobank in the first nine months of this year to N21.0 billion from N14.9 billion.

The trading income generated by the bank grew to N93.2 billion in Q3 of 2022 from N85.5 billion in Q2 of 2021, other operating income rose to N16.7 billion from N11.6 billion, but the net investment income declined to N4.4 billion from N5.6 billion.

In the first nine months of 2022, Ecobank improved its non-interest income by 12 per cent to N258.7 billion from N231.7 billion, while operating income jumped by 11 per cent to N570.4 billion from N516.2 billion.

In the period under consideration, the operating costs of the company increased by 7 per cent to N320.9 billion from N300.7 billion, with personnel costs rising to N138.6 billion from N132.4 billion.

The bank, in the financial statements filed to the Nigerian Exchange (NGX) Limited, said its pre-tax profit improved by 17 per cent to N168.7 billion from N143.7 billion, while the post-tax profit gained 12 per cent to N1177.4 billion from N104.5 billion.

On a year-to-date basis, its loans disbursement to customers was marginally down to N4.03 trillion from N4.06 trillion in FY 2021, while deposits from customers went down to N8.06 trillion from N8.36 trillion.

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Economy

NGX Helps Governments, Corporates Secure N3.5trn Debts

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Cross Deals

By Aduragbemi Omiyale

Debt instruments worth N3.5 trillion have been raised from the capital market in 2022 with the assistance of the Nigerian Exchange (NGX) Limited.

These funds were secured by the federal, state governments, and corporate organisations through the issuance of bonds and commercial papers, with the proceeds used to finance projects and business operations.

The NGX has always provided an avenue for organisations to seek cheap capital from investors by positioning itself as the prime location for raising funds.

According to the Divisional Head of Capital Markets at the NGX, Mr Jude Chiemeka, the capital market could serve as the primary source of bulk mobilisation of capital to finance developmental projects, and NGX had implemented an array of incentives, programmes and capacity building workshops for investors.

“The pension fund industry, for example, has been able to leverage the issuances done by the DMO in recent times, and a lot of financing has come from them,” he said at the Nigeria Integrated National Financing Framework (INFF) dialogue on Channels TV with the theme How Can Nigeria Finance its Development Priorities.

“As an exchange, we provide the platform that will enable the government to finance projects through green instruments that these investors can invest in and ultimately benefit from the returns. And that is why it’s critical to ensure there’s constant investor education, sound governance and regulation.

“If you take a look at the recently revamped Capital Market Master Plan, there’s a conversation there around increasing retail investor participation in our markets,” he added.

INFF emanated as a result of a partnership among the FG, the United Nations Development Programme (UNDP), and European Union (EU) to support Nigeria in mobilising greater amounts of private and public resources to finance its development agenda.

Speaking further, Mr Chiemeka said the goal is to revamp the current active retail participation level to 5 million by 2025.

“NGX has been able to facilitate the raise of about N3.5 trillion since January 2022 for corporates, federal and state governments. We are very well equipped to support the financing of these capital projects because we have the right platform.

“Today, you talk about the African Exchanges Linkage Project, which commenced on November 18 and will be launched in December. That gives Nigeria the ability to leverage the investor base in other capital markets to fund the projects to grow the economy and lift people out of poverty,” he stated.

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