The founder and chairman of the Honeywell Group, Oba Otudeko gained a whopping N690 million from his Honeywell Flour Mills Plc stake in a single session on the Nigerian Stock Exchange, as local investors bid up the shares of his flour milling company.

Otudeko who is also well known for his investment in the oceanfront Radisson Blu in Lagos, is the single majority shareholder of Honeywell Flour Mills, considering his ownership stake in the company which runs to about 5.29 billion units, out of the 7.93 billion total issued shares of the company.

Otudeko’s stake in Honeywell Flour Mills has a valuation of about N7.58 billion

His 75% ownership stake in Honeywell Flour Mills of about 5.29 billion issued shares of the company which he holds indirectly through Siloam Global Services Limited, is presently worth about N7.57 billion, up from a N6.88 billion valuation at market open yesterday 20th of April 2021.

The recent gains in Otudeko stake were driven by buying pressure in the shares of his company as the move saw the shares of Honeywell surge by 10% in a single session, from N1.30 at the open of the market on the 20th of April, to N1.43 at the close of the market.

This bullish move in the shares of the miller pushed its market capitalization up by about N1.03 billion on the exchange yesterday, from N10.31 billion as of Monday, 19th April to N11.34 billion at the close of the market.

What you should know

At the close of trading activities yesterday on the exchange, the market capitalization of all the issued shares of Honeywell flour mills Plc was put at N11.34 billion.

The shares of the flour miller cleared at N1.43 per share. This is 10% higher than Monday’s N1.30 closing price, with about 8,935,946 ordinary shares of the company exchanged in 150 executed deals on the Exchange yesterday, worth about N12.56 million.

Honeywell’s shares are currently trading at 62.5% higher than its 52-week low of N0.88 per share, and 8.33% lower than its 52-week high.

The prevailing market price presents bargain hunters who bought shares of the company low with the opportunity to book some profits.

Market performance

• The Nigerian Stock Exchange All-Share Index and Market Capitalization appreciated by 0.43% to close higher at 39,015.58 index points and N20.418 trillion respectively, at the end of trading activities yesterday.
• The NSE Consumer Goods Index, an investable benchmark designed to track the performance of consumer goods companies like Honeywell Flour Mills, appreciated by 0.38% to close the day higher at 555.22 index points.

It’s been roughly three months since the Central bank restricted Nigeria’s financial institutions from dealing with anything crypto-related, yet recent data suggests its citizens have increasingly found other alternatives to access the world’s flagship crypto.

Data retrieved from Usefultulips (a Bitcoin analytic data provider) shows that the usage of Bitcoin’s peer to peer trading in Nigeria surged by 27% since the CBN directive took effect about 85 days ago, as Nigerians moved about $103 million worth of Bitcoins on just Paxful and LocalBitcoins channels alone.

Bitcoin recorded gains and its suitability in hedging against inflation, coupled with access to other crypto assets that offer more viable options, seem not to have weakened despite the recent N5/$ rebate scheme introduced by the Central Bank of Nigeria to encourage Nigerians in the diaspora to use official channels to remit their funds instead of doing so through Cryptocurrencies.

The world’s most popular crypto has rallied by almost 500% since its latest bull run began at the start of Q4 2020, hitting record highs of almost $65,000 this month before pulling back to $55,000 at the time of drafting this report amid strong institutional purchases sighted in emerged markets.

Some market analysts argue that Nigeria’s apex bank’s hold on the country’s financial system has further complicated transactional processes in Africa’s largest economy because Bitcoin still relies heavily on fiat currencies despite being virtual, from pricing its value to how its ownership is being ascertained. In spite of this, the growing interest in Bitcoin has not weakened.

Adding credence to Nigeria’s grip on Bitcoin includes data collated from Google trends, printing that Africa’s largest crypto market, emerged as the first amongst other countries by a long-distance over its interest in Bitcoin with a perfect score of 100%.

Nigeria’s relatively young educated population coupled with its growing internet adoption and smartphone penetration has facilitated Bitcoin to thrive exponentially amid rising inflation that has eroded the savings of many Nigerians.

The borderless feature of Bitcoin also makes payment effortless for Nigerians in addition to offering outrageously low transaction fees.

To give context, many Nigerian banks charge 1–2.5%. For a $1 million offshore transfer, bank charges may go up to $10,000, but with the flagship crypto, transfer of such amount would not exceed $300, even at peak periods.

Consequently, a significant number of Nigerians already pay a premium for accessing the crypto market, as data from Binance, the world’s largest crypto exchange by volume, at the time of writing, posted a rate of N607 to 1 USDT with Nigerian banking channels close to the global crypto ecosystem.

Bottom line

A growing number of Nigerians are not giving up on the crypto that has outperformed any Nigerian-based financial asset. They are thus ready to pay a premium to hold on to Crypto irrespective of the Central Bank’s ban.