Nigerian bourse ended Monday’s trading session near a stalemate, as the All Share Index dropped slightly by 0.04% to close at 34,121.78 points. Thus, the YTD performance currently stands at 27.56%.

A total volume of 568million units of shares, valued at N7.32billion exchanged hands in 8,928 deals. ZENITHBANK was the most traded shares by volume and valued at 79.7million units and N1.91billion.

• Market sentiment was negative, as market breadth came in at 9.2x  with 46 decliners and 5 advancers.
• The sectorial performance was bearish as Banking, Consumer Goods, Insurance, Oil & Gas were down by 4.72%, 2.07%, 2.07%, and 1.62% respectively, while the Industrial index closed as the lone gainer, up by +2.72%.

Sector performance

• NSE Banking Index: Down by -4.72%, on sell-offs in WEMABANK (-9.09%), ACCESS (-8.14%), UBA (-6.10%), and ZENITHBANK (-5.66%).
• NSE Consumer Goods Index: Fell by -2.07%, due to sustained losses in GUINNESS (-9.55%), PZ (-9.43%), and FLOURMILL (-8.43%).
• NSE Insurance Index: Dipped by -2.07%, on price decline in CUSTODIAN (-10.00%), CHIPLC (-9.38%), and LINKASSURE (-9.09%).
• NSE Oil & Gas Index: Dipped by -1.62%, as ARDOVA (-10.00%) and OANDO (-9.97%) declined in price.
• NSE Industrial Index: Up by +2.72% due to the price appreciation in BUACEMENT (+4.77%) and DANGCEM (+3.42%)

Top gainers

1. AIRTELAFRI up 5.00% to close at N500
2. BUACEMENT up 4.77% to close at N53.45
3. DANGCEM up 3.42% to close at N193.2
4. NESTLE up 1.82% to close at N1400
5. NEM up 0.78% to close at N2.6

Top Losers

1. ARDOVA down 10.00% to close at N13.5
2. WAPCO down 10.00% to close at N22.05
3. GUINNESS down 9.55% to close at N18
4. FLOURMILL down 8.47% to close at N25.4
5. STANBIC down 8.02% to close at N39.55

Outlook

Nigerian Stocks began the first trading session on a slightly bearish note, amid soaring oil prices prevailing at the U.S trading session. At the time of writing this report, Brent crude was trading above $45/barrel.

• That said, significant gains seen from NSE30 Stocks that include Nestle, Airtel, Dangote, BUACement couldn’t stop Nigerian stocks from closing slightly red, as sell-offs intensified among top brewery stocks and medium capitalized stocks.
• Nairametrics envisage cautious buying, on the sentiments that recent price action shows further market correction in the near term, however, stock traders anticipate the bullish run is still in play for the long term.

The Association of Bureau De Change Operators of Nigeria (ABCON) has strongly warned foreign exchange speculators, who have been pushing for the forceful depreciation of the naira through their illegal activities, that they run the risk of losing their money.

According to a report from ThisDay, this is contained in a statement issued by ABCON on Sunday, November 22, 2020, and titled, “ABCON warns speculators will lose money as CBN has enough reserves to fund market, defend naira“.

The President of ABCON, Alhaji Aminu Gwadabe, said foreign exchange speculators run the risk of losing their funds, as the Central Bank of Nigeria (CBN) has enough in its reserve to defend the naira and close the widening gap between official and parallel market rates.

The demand pressure on the naira from importers and currency speculators has seen the local currency depreciate to N484 to a dollar in the parallel market, otherwise known as the black market as at last week Friday, whereas the official CBN rate still remained stable at N379 to a dollar.

Gwadabe, pointed out that with almost $36 billion in foreign reserves, the CBN has what it takes to punish the enemies of the economy, who are forcing the naira to depreciate through speculative activities.

He said the CBN Governor, Godwin Emefiele, has continued to take the right steps and measures to stabilize the exchange rate and ensure that foreign exchange is made available to manufacturers and end users, who need the funds for their medical trips, school fees payment, travel allowances, amongst others.

He also acknowledged that the allocation of dollars to Bureau De Change operators (BDCs) has also helped to deepen the forex market and reduce the level of forex scarcity that usually encouraged speculative activities.

He pointed out that the gap between the official rate and the black market will soon be narrowed down to the barest minimum, with the CBN having the needed financial strength to fund the forex market.

Gwadebe said, “I think that the CBN by pushing the official foreign exchange rate from N306 to N379 to the dollar is in line with market demand. It has also helped to narrow the official-parallel market rates gap that formed the basis of ridiculous speculations among unpatriotic forex dealers and spectators.’’

Gwadabe advised the FG to enhance security surveillance at the nation’s borders to checkmate illegal foreign currency cash transactions.

He further called for BDC operators’ liquidity ratios to be raised to discourage dollar holdings. He said ABCON Executives will from this week begin enforcement of regulatory compliance of its members in BDC design market, saying it was helping to overheat that market.

Gwadabe disclosed that ABCON Executive Council under his leadership will continue to promote transparency and efficient market dealings, while commending the CBN Management for its progressive policies towards a stable exchange rate that aligns with its mandate of exchange rate stability.

What you should know

It can be recalled that despite the intervention of the CBN with the allocation of forex to BDCs and formulation of policies to help conserve forex and increase the dollar inflow into the country, the exchange rate disparity appears to widen further.

Some capital market experts, represented by the Chairman of the Association of Securities Dealing Houses of Nigeria, have rejected plans by the Federal Government of Nigeria to manage unclaimed dividends – which is projected to hit N200bn by the end of this year, according to a report by Punch.

The Chairman, Association of Securities Dealing Houses of Nigeria, Onyenwechukwu Ezeagu, explained that capital market regulators and operators had leveraged technology to put in place many initiatives to address the issue of unclaimed dividends. Some of these initiatives include de-materialization of shares, which entails upload of quoted companies share in the Central Securities Clearing System for ease of reconciliation, adoption of e-dividend and e-mandate, consolidation of multiple accounts, identity management engagements, and introduction of electronic Initial Public Offering.

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What they are saying

Commenting on the recent development, Mr. Ezeagu said, “Generally, the incentives for savers and capital providers in the capital market is the expectation of dividends and capital appreciation.

“It is, therefore, our considered view that the proposed legislation, if passed, will be a great disincentive to savings, long-term capital mobilization, and serious disruption of the Nigerian economy, since it will take away the only expectation of investors in the market.”

Corroborating him, the President, Chartered Institute of Stockbrokers, Mr. Olatunde Amolegbe, said the Securities and Exchange Commission would always ensure the transfer of unclaimed dividends to the capital reserves of the company for restricted utilization, such as capital expansion and issuance of bonus shares to the company’s shareholders.

What you should know

Nairametrics had earlier reported that some law makers (Reps) raised alarm over N200 billion unclaimed dividends in 2020. In lieu of this perceived need, a proposal for the creation of an unclaimed dividend and utilized bank balance trust fund was emphasized in the 2020 Finance Bill — wherein, dividends declared and unclaimed would be warehoused and owed as a perpetual debt to shareholders.