Markets
Corporate Actions: 41 for 100, An IPO and offices unsealed
These are the corporate actions that took place on the Nigerian Stock Exchange WTD November 16 2018.
Corporate actions are decisions taken by companies’ boards of directors or management teams, that could have impacts on the firms themselves or shareholders.
Examples of corporate actions include the payment of dividends, closing of shareholders’ registers, announcing qualification dates and Annual General Meeting (AGM) dates.
Here is a review of corporate actions that took place last week, and those expected this week.
Seplat Petroleum Development Company
Seplat Petroleum Development Company announced that it had obtained presidential approval for the renewal of its core OMLs 4, 38 and 41 till 2038.
The move is a key one, as the OMLs accounted for 92% of Seplat’s total oil production and 100% of its gas production.
The firm also disclosed that it had paid in full a renewal bonus of US$25.9 million, thus ensuring that all conditions for license renewal have been met.
The stock was also marked down, following the payment of a N15.31 interim dividend. Ex-dividend price was N652.69.
Stanbic IBTC Holdings makes key appointments
Tier two lender, Stanbic IBTC Holdings, last week announced several key appointments.
Mr. Wole Adeniyi, who until recently was the Executive Director, Operations, Stanbic IBTC Bank, has been appointed Executive Director, Personal and Business Banking, Stanbic IBTC Bank, following the appointment of Mr. Babatunde Macaulay, the erstwhile Executive Director, as Regional Head, Personal and Business Banking for Standard Bank West Africa, based in Johannesburg, South Africa.
The Chief Executive Officer, Stanbic IBTC Asset Management Limited, Mrs Bunmi Dayo-Olagunju, assumes a new role as Deputy Head, Operations, Stanbic IBTC Bank.
Mrs Binta Max-Gbinije has been named Head, Commercial Banking and Public Sector Group, Stanbic IBTC Bank. Prior to this, she was the Chief Executive Officer, Stanbic IBTC Trustees.
Mr Babatunde Akindele is Zonal Head, Lagos Island, Stanbic IBTC Bank. Mrs Nike Bajomo was appointed as Executive Director, Business Development, Stanbic IBTC Pension Managers Limited, while Ms Olusola Carrena and Mrs Oyinda Akinyemi were appointed Executive Directors of Stanbic IBTC Capital.
Regulatory approvals have been secured for all appointments.
Sunu Assurances Plc
Sunu Assurances Plc (formerly Equity Assurance Plc) has released its results for the third quarter ended September 30, 2018. The underwriter remains mired in losses.
Two denials
Tier two lender, Diamond Bank Plc, and one of the FUGAZ Banks, Access Bank Plc, denied media reports published last week that the latter was interested in acquiring the former.
Diamond had been dogged by several media reports last week, ranging from alleged poor liquidity to reports of investors interested in injecting fresh capital, with condition being the bank’s GMD stepping down.
Diamond has, however, issued a robust denial.
41 for 100
It’s not a new mathematical formula, nor alcohol. Prestige Assurance Plc has declared a bonus issue of 41 new shares for every 100 held. Qualification date is November 27, 2018, while closure of the shareholders’ register will take place from November 28, 2018 to December 5, 2018.
History made
Last week witnessed the opening of a Initial Public Offer for the year.
Skyway Aviation Handling Company Plc’s Initial Public Offering by way of an offer for sale of 406,074,000 ordinary shares of 50 kobo each at N4.65 per share was opened for subscription as shown below: offer opened on Monday, November 12, 2018, and closes on Wednesday, December 19, 2018.
Goldlink Insurance Plc
Goldlink Insurance Plc held an emergency board meeting to approve the company’s audited results for the 2017 financial year. The results will then be sent to the industry regulator, NAICOM for approval.
The company has been under NAICOM’s supervision in the last few years.
Offices unsealed
In a notice sent to the Nigerian Stock Exchange (NSE) this week, Nigerian Breweries Plc announced that its offices in Abuja and Lagos were briefly sealed by the National Lottery Regulatory Commission (NLRC).
The commission had demanded from the company, fees pertaining to consumer promotions it had held. The company had resisted, due to a pending suit filed against the NLRC by NECA challenging the commission’s right to regulate consumer promotions in the country.
DAAR gives an update
In a notice issued last week, the company announced that it would hold its 2017 and 2018 Annual General Meetings in the second quarter of 2019.
The firm also stated that it was restructuring its business and had concluded a staff audit and restructuring exercise.
Courteville Business Solutions
Last week, the company announced the appointment of Oladimeji Sanni as an independent Non-Executive Director, and the resignation of Ms Helen Emore from its board. Emore was appointed in December 2016.
Corporate Actions taking place this week
UPDC may hold AGM
UAC Property Development Company is scheduled to hold its Annual General Meeting on Tuesday, November 20, 2018. However, the AGM may be rescheduled in view of the public holiday declared by the Federal Government.
Cryptocurrency
DeFi crypto market value gains over 1000% from June
Defi based crypto market value had risen from $1 billion in June to $10.71 Billion
DeFi cryptos are now a force to reckon with, especially since the era of the worst pandemic known to man came to play.
It’s important to note that DeFi-related assets are gaining traction, as data feeds from Defipulse revealed that Defi based crypto market value had risen from $1 billion in June to $10.71 billion, at the time this report was written, showing an astronomical gain of 1071%.
Why investors are flocking to DeFI cryptos
Several DeFi crypto assets have had their share of the spotlight in recent times, with cryptos such as Chainlink, Compound, YAM, UniSwap, Cream finance, and Melon gaining investors’ capital inflows.
- Using “Defi” technology, one can build smart contracts with codes that facilitate the actions of intermediaries, including managing and accepting deposits, handling collateralized loans, and liquidating collateral assets as per the terms of the contracts, should their values fluctuate.
- Although DeFi assets, about few days back, had experienced some price corrections due to the rebound of the dollar and overbought indicators, the market seems to show a bullish bias relatively in the midterm, as Defi based investors increase their asset purchases momentarily.
- DeFi crypto owners in some cases can typically receive better interest rates than they would from traditional banks on the basis that lower operating costs is enabled by operating on an automated decentralized network
As a credit to blockchain technology, the contract codes cannot be terminated or manipulated by any entity, and are executed with specific conditions.
What DeFi means: Defi means “decentralized finance.” By definition, it’s a crypto ecosystem made up of financial apps designed on leading blockchain platforms.
- Defi, in short, is the use of blockchain technologies (including smart contracts, decentralized asset custody, etc.) to replace all “intermediaries” with program codes, therefore maximizing the efficiency of financial services and minimizing costs.
- These digital assets are designed on Ethereum codes, and usually exhibit characteristics that include having protocols and financial smart contracts.
Commodities
Gold prices suffer worst W/W decline since March
Gold futures prices settled at $1.866.30/ounce, showing a loss of 0.56% at the last trading session of the week.
Gold futures declined on Friday, to post a loss of nearly 5% for the week—the largest weekly percentage loss since mid-March. Gold traders have had significant losses on the precious metal to the strength in the U.S. dollar this week.
What we know: Gold futures prices settled at $1.866.30/ounce, showing a loss of 0.56% at the last trading session of the week.
Rising COVID-19 caseloads in emerged markets have distorted investment strategies of global investors, as the world’s economic recovery seems to be fragile, driving investors into dollars, which has weighed on the bullion-asset.
On top of that, gold traders have also unwound some of their gold holdings as a part of this week’s equity-market sell-offs, which added to the pressures around precious metals.
Other precious metals such as palladium, platinum are also headed for their worst week since the COVID-19 pandemic began to impact financial markets.
Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, highlighted the key macros dampening the optimism of gold bull.
“Gold investors remain less than flattered by the procession of Fed speakers since the FOMC less dovish than expected retort on September 16.
“Most of the focus was still falling on the US Fed’s Charles Evans’ uncomplimentary for gold comments when he suggested that US interest rates go up before the 2% inflation target is hit.”
That said, the outlook remains positive for gold in the long term, on growing COVID-19 cases; also, high geopolitical uncertainty could keep the yellow metal above $1,700/ounce price level in the midterm.
Stock Market
Nigerian Breweries remain Investors delight W/W
Twenty-eight (28) equities depreciated in price, lower than thirty-one (31) equities in the previous week.
Nigerian Stock Market against headwinds printed bullish this week cumulatively.
The NSE All-Share Index and Market Capitalization appreciated by 2.92% to close the week at 26,319.34 and N13.755 trillion respectively.
A total turnover of 1.567 billion shares worth N20.559 billion in 18,396 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 1.139 billion shares valued at N12.692 billion that exchanged hands last week in 17,109 deals.
- The Financial Services industry (measured by volume) led the activity chart with 1.178 billion shares valued at N9.180 billion traded in 9,900 deals; thus contributing 75.14% and 44.65% to the total equity turnover volume and value respectively.
- The Consumer Goods Industry followed with 90.002 million shares worth N1.688 billion in 2,715 deals. The third place was the ICT industry, with a turnover of 84.667 million shares worth N5.786 billion in 771 deals.
- Trading in the top three equities namely Sterling Bank, FBN Holdings Plc, and Zenith Bank Plc.(measured by volume) accounted for 612.805 million shares worth N4.311 billion in 3,739 deals, contributing 39.10% and 20.97% to the total equity turnover volume and value respectively.
- Thirty-five (35) equities appreciated at price during the week, higher than thirty-two (32) equities in the previous week.
- Twenty-eight (28) equities depreciated in price, lower than thirty-one (31)equities in the previous week, while one hundred (100) equities remained unchanged, same as one hundred (100) equities recorded in the previous week.
Top gainers
NIGERIAN BREW. PLC. up 25.12% to close at N52.55
CORNERSTONE INSURANCE PLC up16.39% to close at N0.71
LAFARGE AFRICA PLC. up 15.77% to close at N15.05
CONSOLIDATED HALLMARK INSURANCE PLC up 9.68% to close at N0.34
TRANS-NATIONWIDE EXPRESS PLC. up 9.33% to close at N0.82
INTERNATIONAL BREWERIES PLC. up 9.09% to close at N3.60
PRESTIGE ASSURANCE PLC up 9.09% to close at N0.60
FLOUR MILLS NIG. PLC. up 8.59% to close at N21.50
PRESCO PLC up 8.16% to close at N53.00
LASACO ASSURANCE PLC. up 8.00% to close at N0.27
Top Losers
AIICO INSURANCE PLC. down 20.00% to close at N0.72
RED STAR EXPRESS PLC down 16.90% to close at N3.00
OANDO PLC down 11.74% to close at N2.03
N NIG. FLOUR MILLS PLC. down 10.00% to close at N4.05
CHAMPION BREW. PLC. down 10.00% to close at N0.81
UNIVERSITY PRESS PLC. down 9.55% to close at N1.42
DAAR COMMUNICATIONS PLC down 9.09% to close at N0.30
WAPIC INSURANCE PLC down 8.11% to close at N0.34
LINKAGE ASSURANCE PLC down 7.32% to close at N0.38
ROYAL EXCHANGE PLC. down 6.90% to close at N0.27
Outlook
Surprisingly, the Nigerian bourse against all prevailing macros printed impressive gains, as Investors cashed in with over N390 billion WoW. Buying pressures notably from Nigerian Breweries, Flour mills, Lafarge lifted, investors morale across the market spectrum
- In spite of falling crude oil prices and prevailing dollar scarcity, Nairametrics observed significant Institutional buying in some notable blue-chip stocks, as Investors re-align their stock portfolios ahead of Q4,2020
- That said, the surprising interest rate reduction of 100 basis points by Nigeria’s central bank this week, could partly be responsible for the lukewarm performance of Nigerian banking stocks this week, as no Nigerian banking stock made the top ten gainers list, on the bias that interest rates play a very important role in their profit margins in the mid-term
- However, in spite of the bullish run recorded in the fast-growing equity market, Nairametrics, envisage cautious buying, as market liquidity remain relatively weak overall.
DeFi crypto market value gains over 1000% from June
Gold prices suffer worst W/W decline since March
Nigerian Breweries remain Investors delight W/W
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