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Markets

CAP increases staff benefits despite flat profit

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CAP Plc recently financial statements for the year ended December 2017. While revenue increased slightly, the bottom line declined. Revenue increased by 4% from N6.8 billion in 2016 to N7.1 billion in 2017. Profit before tax however dropped by 5% from N2.2 billion in 2016 to N2.1 billion in 2017. Profit after tax also fell by 7% from N1.6 billion in 2016 to N1.4 billion in 2017.

Management costs jump
Despite the flat results, the company opted to increase salaries and wages. This rose from N507 million in 2016 to N621 million in 2017.  Senior management took a larger percentage of staff costs as they accounted for 69% or N485 million of staff costs up from 65% or N382 million in 2016.
In terms of value added, the percentage applied to paying employees increased from 19% in 2016 to 23% in 2017. The percentage accrued to shareholders as dividends, however, dropped by 4% from 54% in 2016 to 50% in 2017.

Lower dividends
Shareholders may have less cause to smile if nothing improves in the current year as the company has opted to cut its dividend payments in line with lower earnings per share. CAP Plc has declared a final dividend of N2.03 kobo per share for the 2017 financial year, from earnings per share of N2.14. This is the lowest dividend the company has paid in the last 5 years.

Chemical and Allied Products Plc (CAP Plc), a subsidiary of UAC of Nigeria Plc, is the technological licensee of AkzoNobel, the world’s largest paint producer. UACN first bought a 35.7% stake in 1992 when parent company, ICI, sold its minority stake.Currently, UAC of Nigeria Plc holds about 50.09% of the company’s equity.

CAP Plc closed at N38.75 on Friday’s trading session, up 13.97% year to date.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training.He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE).He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy.You can contact him via [email protected]

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Markets

US economic performance bolster Wall Street surge 

U.S. stocks made a late-session turnaround on Thursday, closing at session highs.

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U.S stocks futures rebound , cryptocurrency, ExxonMobil, JP Morgan Chase, MasterCard Up by over 10%

Following upbeat corporate earnings and signs of continuing progress in the labour market, U.S. stocks made a late-session turnaround on Thursday, closing at session highs.

After jumping around the flatline earlier in the day, the S&P 500 ended just short of a new high, while the Dow Jones Industrial Average jumped more than 300 points, setting a new high. The Nasdaq Composite gained ground as well, ending the day in the black and breaking a four-day losing streak. Earnings were a factor in the stock market’s biggest gainers, as Kellogg led the S&P 500 higher after outperforming analysts’ expectations.

Treasuries remained stable, with the 10-year yield remaining about 1.57%, a far cry from recent peaks. The Fed said in its semi-annual financial stability report that a growing appetite for risk across a variety of asset markets is stretching valuations and creating vulnerabilities in the US financial system. Meanwhile, applications for state unemployment benefits in the United States hit a new pandemic low, and separate data revealed a productivity rebound. Traders are now looking forward to Friday’s payroll figures.

Economists expect Friday’s report to show that the US economy added 1 million jobs in April, as the economy recovers from losses suffered during the coronavirus shutdowns. The non-farm payrolls report will be closely scrutinized by investors for information about the Federal Reserve’s next steps, as the central bank has said that it will continue to buy $120 billion in bonds every month until the labour market improves.

Although markets are benefiting from stronger growth in the world’s largest economy, investors are worried that a faster-than-expected recovery from unprecedented government and central bank stimulus would result in excessive inflation. The Federal Reserve remains committed to near-zero interest rates in order to achieve a complete recovery, but in the second half of this year, an announcement of a reduction in its large monthly bond purchases seems increasingly imminent.

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Cryptocurrency

Crypto aftershocks send Doge crashing by 10%

The fast-rising crypto was trading at below 60 cent posting losses of about 10% for the day on the FTX exchange.

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doge

The Crypto market is currently undergoing some form of price correction amid intensified profit-taking and fear of regulatory oversights, thereby pushing Dogecoin below the 60-cent price levels.

On the broader crypto market, for the day, about 171,444 traders were liquidated. The largest single liquidation order happened on Bybit-ETH valued at $5.98 million.

The fast-rising crypto was trading at below 60 cent posting losses of about 10% for the day on the FTX exchange, after trading near 70 cents some hours ago.

Consequently, market pundits argue that the crypto asset doesn’t have any real case use.

READ: Crypto crash: 3 major risks involved in investing in Crypto

I worry that, once the enthusiasm rolls out, there are no developers on it, there are no institutions coming in. But it’s got this moniker of the people’s coin right now,” Galaxy Digital’s Michael Novogratz said on Squawk Box.

Dark clouds seem to be building upon recent reports that the Crypto market is about to face a wave of regulatory oversights when Janet Yellen the custodian of the world’s most powerful economy stated that the United States is yet to have the needed framework to deal with a host of money laundering, terrorist financing, and consumer risk protection that crypto raises.

Also, the U.S. Securities and Exchange Commission Chair, Gary Gensler advised U.S lawmakers on providing more regulatory oversight to the cryptoverse.

“Right now, the exchanges, trading in these crypto assets, do not have a regulatory framework either at the SEC or our sister agency, the Commodity Futures Trading Commission,” said Gensler, who further added, “there’s not a market regulator around these crypto exchanges, and thus, there’s really no protection against fraud or manipulation.”

READ: Altcoins giving investors weekly returns of at least 100%

That being said, the crypto’s stellar performance over the past few months can’t be ignored as Dogecoin maximalists try to convince the world that crypto is a serious asset class with powerful billionaires like Elon Musk and Mark Cuban giving the Crypto asset endless support.

Crypto experts further anticipate that ongoing institutional interest will make it difficult to predict if the Doge bubble is ripe as they try to take advantage of its incredible bullish momentum, which could in turn, push the crypto value higher.

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