Stocks to watch this week comprises the top gainers and losers of the previous week and companies that released results or made announcements after Friday’s trading session.
It is not a Buy/Sell/Hold recommendation.
Here are stocks that will be on our radar this week.
Transnational Corporation of Nigeria Plc
Transnational Corporation (commonly known as Transcorp) tops our stocks to watch list by virtue of reports of key shareholder, Heirs Holdings, raising funds to purchase blocks owned by Shell. Heirs Holdings is ultimately controlled by Tony Elumelu.
The deal, if successful, would lead to Transcorp running a power plant owned by Shell.
United Capital Plc
United Capital also occupies a spot on our watchlist due to the potential fundraise by Heirs Holdings. Tony Elumelu, the main party behind Heirs, also owns a stake in United Capital. As an investment bank, the company would play a key role in the transaction.
Linkage Assurance Plc
Linkage Assurance Plc makes our watchlist this week by virtue of being the highest gaining stock last week. The stock gained 9.72% last week, closing at N0.72.
Union Diagnostic and Clinical Services Plc
Union Diagnostics Plc is on our watchlist this week by virtue of being the worst performing stock last week. The stock shed 34.29% to close at N0.23.
Capital Oil Plc
Capital Oil Plc will be holding an Extraordinary General Meeting (EGM) on the 26th of July, 2018. The agenda of the meeting is the acquisition of a stake by Pinnacle Oil and Gas through a private placement.
Royal Exchange Plc
A suspension placed on the company was lifted last week Friday. The company has since released its results for the full year ended December 2017 and first quarter ended March 2018. Companies lifted from suspension tend to either fall or rise sharply.
Niger Insurance Plc
Niger Insurance Plc makes our watchlist this week by virtue of its holding its Annual General meeting on the 23rd of July, 2018. AGMs are opportunities for investors to be briefed about management teams’ plans for the year.
Livestock Feeds Plc
Livestock Feeds Plc will be holding its Annual General Meeting on the 23rd of July, 2018.
Abbey Mortgage Bank Plc
Abbey Mortgage Bank will be holding its Annual General Meeting (AGM) on the 24th of July, 2018.
Great Nigeria Insurance Plc
Great Nigeria Insurance Plc will be holding an Extraordinary General Meeting (EGM) and Annual General Meeting (AGM) on the 24th and 25th of July respectively. The two meetings are pertinent because the company has indicated interest in delisting from the NSE, a move which retail investors may kick against.
Presco Plc will be holding its Annual General Meeting on the 25th of July, 2018.
Studio Press Plc
Studio Press Plc will be holding its Annual General Meeting (AGM) on the 25th of July, 2018.
Capital Oil Plc
Capital Oil Plc will be holding its Annual General Meeting (AGM) on the 26th of July, 2018.
Omoluabi Mortgage Bank Plc
Omoluabi Mortgage Bank Plc will be holding its Annual General Meeting (AGM) on the 26th of July, 2018.
Champion Breweries Plc
Champion Breweries will be holding its Annual General Meeting (AGM) on the 26th of July, 2018.
The Initiates Plc
The Initiates Plc is into waste management, Industrial Cleaning, and decontamination services. The company will be holding its Annual General Meeting (AGM) on the 27th of July, 2018.
Oando Plc will be holding its Annual General Meeting (AGM) on the 27th of July, 2018. This AGM would be of note due to reports of the company’s Group CEO Wale Tinubu and Deputy CEO Mofe Boyo being asked to pay the sum of $680 million to Ansbury Incorporated, owned by Gabriele Volpi.
COVID-19 Update in Nigeria
On the 9th of July 2020, 499 new confirmed cases and 5 deaths were recorded in Nigeria.
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continue to record significant increase as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 30,748 confirmed cases.
On the 9th of July 2020, 499 new confirmed cases and 5 deaths were recorded in Nigeria, having carried out a total daily test of 2,302 samples across the country.
To date, 30,748 cases have been confirmed, 12,546 cases have been discharged and 689 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 171,931 tests have been carried out as of July 9th, 2020 compared to 169,629 tests a day earlier.
COVID-19 Case Updates- 9th July 2020,
- Total Number of Cases – 30,748
- Total Number Discharged – 12,546
- Total Deaths – 689
- Total Tests Carried out – 171,931
According to the NCDC, the 499 new cases were reported from 24 states- Lagos (157); Edo (59); Ondo (56); Oyo (31); Akwa Ibom (22); Borno (21); Plateau (19); Kaduna (18); Katsina (18); Bayelsa (17); FCT (17); Delta (14); Kano (11); Rivers (10); Enugu (8); Ogun (6); Kwara (4); Imo (3); Nasarawa (2); Osun (2); Abia (1); Ekiti (1); Niger (1); Yobe (1).
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 11,827, followed by Abuja (2,365), Oyo (1,604), Edo (1,562), Delta (1,337), Kano (1,302), Rivers (1,294), Ogun (1,063), Kaduna (907), Katsina (646), Ondo (606), Borno (584), Gombe (524), Bauchi (519), Ebonyi (503), Plateau (497), Enugu (439), Abia (401), Imo (359), Jigawa (318).
Kwara state has recorded 311 cases, Bayelsa (299), Nasarawa (236), Osun (212), Sokoto (153), Akwa Ibom (134), Niger (125), Benue (121), Adamawa (100), Anambra (93), Kebbi (86), Zamfara (76), Yobe (62), Ekiti (46), Taraba (27), while Kogi and Cross River state have recorded 5 cases each.
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020.
|Date||Confirmed case||New cases||Total deaths||New deaths||Total recovery||Active cases||Critical cases|
|July 9, 2020||30748||499||689||5||12546||17513||7|
|July 8, 2020||30249||460||684||15||12373||17192||7|
|July 7, 2020||29789||503||669||15||12108||17012||7|
|July 6, 2020||29286||575||654||9||11828||16804||7|
|July 5, 2020||28711||544||645||11||11665||16401||7|
|July 4, 2020||28167||603||634||6||11462||16071||7|
|July 3, 2020||27564||454||628||12||11069||15867||7|
|July 2, 2020||27110||626||616||13||10801||15693||7|
|July 1, 2020||26484||790||603||13||10152||15729||7|
|June 30, 2020||25694||561||590||17||9746||15358||7|
|June 29, 2020||25133||566||573||8||9402||15158||7|
|June 28, 2020||24867||490||565||7||9007||14995||7|
|June 27, 2020||24077||779||558||4||8625||14894||7|
|June 26, 2020||23298||684||554||5||8253||14491||7|
|June 25, 2020||22614||594||549||7||7822||14243||7|
|June 24, 2020||22020||649||542||9||7613||13865||7|
|June 23, 2020||21371||452||533||8||7338||13500||7|
|June 22, 2020||20919||675||525||7||7109||13285||7|
|June 21, 2020||20242||436||518||12||6879||12847||7|
|June 20, 2020||19808||661||506||19||6718||12584||7|
|June 19, 2020||19147||667||487||12||6581||12079||7|
|June 18, 2020||18480||745||475||6||6307||11698||7|
|June 17, 2020||17735||587||469||14||5967||11299||7|
|June 16, 2020||17148||490||455||31||5623||11070||7|
|June 15, 2020||16658||573||424||4||5349||10885||7|
|June 14, 2020||16085||403||420||13||5220||10445||7|
|June 13, 2020||15682||501||407||8||5101||10174||7|
|June 12, 2020||15181||627||399||12||4891||9891||7|
|June 11, 2020||14554||681||387||5||4494||9673||7|
|June 10, 2020||13873||409||382||17||4351||9140||7|
|June 9, 2020||13464||663||365||4||4206||8893||7|
|June 8, 2020||12801||315||361||7||4040||8400||7|
|June 7, 2020||12486||260||354||12||3959||8173||7|
|June 6, 2020||12233||389||342||9||3826||8065||7|
|June 5, 2020||11844||328||333||10||3696||7815||7|
|June 4, 2020||11516||350||323||8||3535||7646||7|
|June 3, 2020||11166||348||315||1||3329||7522||7|
|June 2, 2020||10819||241||314||15||3239||7266||7|
|June 1, 2020||10578||416||299||12||3122||7157||9|
|May 31, 2020||10162||307||287||14||3007||6868||7|
|May 30, 2020||9855||553||273||12||2856||6726||7|
|May 29, 2020||9302||387||261||2||2697||6344||7|
|May 28, 2020||8915||182||259||5||2592||6064||7|
|May 27, 2020||8733||389||254||5||2501||5978||7|
|May 26, 2020||8344||276||249||16||2385||5710||7|
|May 25, 2020||8068||229||233||7||2311||5524||7|
|May 24, 2020||7839||313||226||5||2263||5360||7|
|May 23, 2020||7526||265||221||0||2174||5131||7|
|May 22, 2020||7261||245||221||10||2007||5033||7|
|May 21, 2020||7016||339||211||11||1907||4898||7|
|May 20, 2020||6677||284||200||8||1840||4637||7|
|May 19, 2020||6401||226||192||1||1734||4475||7|
|May 18, 2020||6175||216||191||9||1644||4340||7|
|May 17, 2020||5959||388||182||6||1594||4183||7|
|May 16, 2020||5621||176||176||5||1472||3973||7|
|May 15, 2020||5445||288||171||3||1320||3954||4|
|May 14, 2020||5162||193||168||3||1180||3815||4|
|May 13, 2020||4971||184||164||6||1070||3737||4|
|May 12, 2020||4787||146||158||6||959||3670||4|
|May 11, 2020||4641||242||152||10||902||3589||4|
|May 10, 2020||4399||248||142||17||778||3479||4|
|May 9, 2020||4151||239||127||11||745||3278||4|
|May 8, 2020||3912||386||118||10||679||3115||4|
|May 7, 2020||3526||381||108||4||601||2818||4|
|May 6, 2020||3145||195||104||5||534||2507||1|
|May 5, 2020||2950||148||99||5||481||2370||4|
|May 4, 2020||2802||245||94||6||417||2291||2|
|May 3, 2020||2558||170||88||2||400||2070||2|
|May 2, 2020||2388||220||86||17||351||1952||2|
|May 1, 2020||2170||238||69||10||351||1751||2|
|April 30, 2020||1932||204||59||7||317||1556||2|
|April 29, 2020||1728||196||52||7||307||1369||2|
|April 28, 2020||1532||195||45||4||255||1232||2|
|April 27, 2020||1337||64||41||0||255||994||2|
|April 26, 2020||1273||91||41||5||239||994||2|
|April 25, 2020||1182||87||36||3||222||925||2|
|April 24, 2020||1095||114||33||1||208||855||2|
|April 23, 2020||981||108||32||3||197||753||2|
|April 22, 2020||873||91||29||3||197||648||2|
|April 21, 2020||782||117||26||3||197||560||2|
|April 20, 2020||665||38||23||1||188||466||2|
|April 19, 2020||627||86||22||2||170||436||2|
|April 18, 2020||541||48||20||2||166||356||2|
|April 17, 2020||493||51||18||4||159||317||2|
|April 16, 2020||442||35||13||1||152||277||2|
|April 15, 2020||407||34||12||1||128||267||2|
|April 14, 2020||373||30||11||1||99||263||2|
|April 13, 2020||343||20||10||0||91||242||2|
|April 12, 2020||323||5||10||0||85||228||2|
|April 11, 2020||318||13||10||3||70||238||2|
|April 10, 2020||305||17||7||0||58||240||2|
|April 9, 2020||288||14||7||1||51||230||2|
|April 8, 2020||274||22||6||0||44||226||2|
|April 7, 2020||254||16||6||1||44||204||2|
|April 6, 2020||238||6||5||0||35||198||2|
|April 5, 2020||232||18||5||1||33||194||2|
|April 4, 2020||214||5||4||0||25||185||0|
|April 3, 2020||209||25||4||2||25||180||0|
|April 2, 2020||184||10||2||0||20||162||0|
|April 1, 2020||174||35||2||0||9||163||0|
|March 31, 2020||139||8||2||0||9||128||0|
|March 30, 2020||131||20||2||1||8||121||0|
|March 29, 2020||111||22||1||0||3||107||0|
|March 28, 2020||89||19||1||0||3||85||0|
|March 27, 2020||70||5||1||0||3||66||0|
|March 26, 2020||65||14||1||0||2||62||0|
|March 25, 2020||51||7||1||0||2||48||0|
|March 24, 2020||44||4||1||0||2||41||0|
|March 23, 2020||40||10||1||1||2||37||0|
|March 22, 2020||30||8||0||0||2||28||0|
|March 21, 2020||22||10||0||0||1||21||0|
|March 20, 2020||12||4||0||0||1||11||0|
|March 19, 2020||8||0||0||0||1||7||0|
|March 18, 2020||8||5||0||0||1||7||0|
|March 17, 2020||3||1||0||0||0||3||0|
|March 16, 2020||2||0||0||0||0||2||0|
|March 15, 2020||2||0||0||0||0||2||0|
|March 14, 2020||2||0||0||0||0||2||0|
|March 13, 2020||2||0||0||0||0||2||0|
|March 12, 2020||2||0||0||0||0||2||0|
|March 11, 2020||2||0||0||0||0||2||0|
|March 10, 2020||2||0||0||0||0||2||0|
|March 9, 2020||2||1||0||0||0||2||0|
|March 8, 2020||1||0||0||0||0||1||0|
|March 7, 2020||1||0||0||0||0||1||0|
|March 6, 2020||1||0||0||0||0||1||0|
|March 5, 2020||1||0||0||0||0||1||0|
|March 4, 2020||1||0||0||0||0||1||0|
|March 3, 2020||1||0||0||0||0||1||0|
|March 2, 2020||1||0||0||0||0||1||0|
|March 1, 2020||1||0||0||0||0||1||0|
|February 29, 2020||1||0||0||0||0||1||0|
|February 28, 2020||1||1||0||0||0||1||0|
How fund managers can help in period of low yield
With inflation holding steady, the low yields end up translating to negative returns.
It is often said that he who must find gold, must dig deeper because such is not found on the surface. With the current trends in interest rate, yield has become like gold, and those that must find it, should dig deeper than they have done before. It is no longer news that yield in traditional asset classes is approaching historically low levels. Indeed, yields are so low that yielder hunters are literally stuck. In one of my last pieces, I noted that the low yield had driven pension funds to the point of abandoning treasury bills as an asset class. The picture gets scarier and disheartening when viewed in real terms. With inflation holding steady, the low yields end up translating to negative returns when discounted for inflation.
Now that Treasury bills seem to be out of the question due to sub-zero yields, what can investors turn to? Here are a few things that investors could think of doing;
Invest in Money Market Funds: Money market funds have been the darling asset class for most Nigerians, due to their conservative nature and the fact that money market funds seem to be much easier to understand. The present low yield in the World market is also affecting money market funds but they still remain much higher than what is obtainable from Treasury Bills. Unfortunately, a great majority of fund managers do not have the yield of their money market funds on display when I visited their websites, below is a list of the prevailing money market yields in Nigeria for those that could be gleaned from the various website:
It may pay to shop around for yield as different funds present with different yields, as can be seen from the table above.
Fund Managers to the Rescue: One of the implications, if not the major implication of the ultra-low interest rate is that investors in yield driven asset classes, like money market funds, will either make minimal returns or no returns at all, especially when inflation is factored in. Unfortunately, most of these money market funds pay fees to the fund managers. To help the situation, it is time for fund managers to reduce or waive some of the fixed fees they charge investors like management fees. Investors should, therefore, ask fund managers for a renegotiation of the fee structure in such a way that the burden of low-interest rate is shared between the fund managers and the investors. Fund managers in places like the US are already doing this.
Loss Carryforward Provisions: Another way that investors can manage this situation is for them to ask fund managers to insert loss carry-forward provisions into the mutual fund agreement or prospectus. A loss carryforward provision is one which states that the fund manager does not get paid any incentive fee unless and until the fund attains its last known highest asset value. By having loss carryforward provisions, investors are afforded the time to recoup on losses before being charged further incentive fees.
Look for High Dividend Yield Stocks: Though stock investment remains riskier than money market funds and fixed income fund investments, in a low yield environment, it may pay to look for and invest in high dividend stocks that have a history of regular and consistent dividend payments.
Warning: Nothing in this article should be taken as investment advice and the author should not be held liable for using it as such.
Naira weakens as forex turnover falls by 88%
The opening indicative rate was N387.32 to a dollar on Wednesday.
Forex turnover fell by 88% on Wednesday at the I&E window weakening the exchange rate to N386.76/$1. The exchange rate at the black market however remained flat at N461/$1 for the third consecutive day this week.
NAFEX: The naira depreciated against the dollar at the Investors and Exporters (I&E) window on Wednesday, closing at N386.75 to a dollar, compared to the N386.50 that was reported on Tuesday, July 7, representing a 25 kobo drop. This is as traders continue to mull over CBN’s adjustment of the exchange rate at the SMIS window. The opening indicative rate was N387.32 to a dollar on Wednesday. This represents a 14 kobo drop when compared to the N387.18 to a dollar that was recorded on Tuesday.
Parallel Market: At the black market where forex is traded unofficially, the naira remained stable as it closed at N461 to a dollar on Wednesday which was the same rate that it exchanged on Tuesday.
Nigeria maintains multiple exchange rates comprising the CBN official rate, the BDC rates, SMIS and the NAFEX (I&E window). Nairametrics reported last week that the government has set plans in motion to unify the multiple exchange rates in line with requirements from the World Bank. Nigeria is seeking a world bank loan of up to $3 billion.
Meanwhile, forex turnover at the Investor and Exporters (I&E) window recorded a decline on Wednesday, July 8, 2020, as it dropped by 88.4% day on day, a huge decline from the figure that it achieved on Tuesday at the foreign exchange market. This is according to data from the FMDQOTC, an exchange where forex is traded by foreign investors and exporters.
According to the data tracked by Nairametrics, forex turnover decreased from $103.37 million on Tuesday, July 7, 2020, to $11.96 million on Wednesday, July 8, 2020, representing an 88.4% drop on a day-to-day basis. This is a reversal from the decent turnover that was recorded the previous day and is a far cry from the $200 million mark that was achieved in January and last week.
Nairametrics reported on Wednesday that the CBN official rate has been adjusted from N360 to a dollar to N381 to a dollar as reflected on the website of the FMDQ. However, the official rate quoted on the website of the CBN remains at N360/$1.
According to Reuters, “the naira eased 5.5% on the official market on Tuesday, after the central bank sold dollars to lenders at a lower rate, bowing to pressure from international lenders to unify its multiple exchange rates.” Reuters also reported “the naira eased to 380.50 in off-market trades, from 360.50 close on Monday” quoting sources from traders.
Nairametrics cannot confirm if the latest adjustment is reflective of the SMIS rates or if the central bank has now taken a bold step towards unification and adjusted its official rate. Reuters claims it’s a move to “unify the exchange rate”.
What this means: Unifying the Naira around the NAFEX rate is effectively another round of devaluation. If this is carried out and forex liquidity improves, then it could lead to an exchange rate strengthen in the parallel market just like it occurred in 2017.
The parallel market rate is currently N461/$1 and could converge to the NAFEX rate meaning those who bought above the NAFEX rate could lose money if they sell.