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Markets

These stocks hit a 5-year low last week

UPDC and tier two lender Diamond Bank Plc both hit 5 year lows in last week’s trading session on the NSE.

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Diamond Bank's merger with Acess Bank

Diamond Bank Plc

Diamond Bank, in addition to hitting a 5-year low, was the worst performing stock last week. The stock hit a 5-year low of N0.86, last week Thursday and eventually closed on Friday at N0.90, down N0.38 or 29.69%.

Year to date, the stock is down 40%.

Why the stock may have slumped

The bank has been in the proverbial bull’s eye in the last couple of weeks. First, about speculation that the bank was one of three allegedly with poor liquidity ratios, flagged in a half year report by the Central Bank of Nigeria.

Next was unconfirmed media reports that tier one lender, Access Bank Plc, was reportedly interested in acquiring the bank. Both banks have since debunked the claims.

An investor call following the bank’s 9 months results for the period ended September 30, 2018, which would have provided more clarity about the bank, has been postponed.

UPDC

UAC Property Development Company Plc also hit a 5-year low last week.

The stock opened at N1.60 and closed at a 5-year low of N1.44 on Friday, down N0.16 or 10%.

Year to date, the stock is down 48.39%.

Likely reasons the stock has been on a free fall

UPDC has had a poor string of results and may end the 2018 financial year on a poor note.

Results for the nine months ended September 30, 2018, show that revenue fell from N3.1 billion in 2017 to N1.9 billion in 2018. Loss before tax jumped from N1.9 billion in 2017 to N4.5 billion in 2018. Loss after tax stood at N4.7 billion in 2018, as against N2.2 billion in 2017.

The company has made efforts to come round, but they are yet to yield fruition.

Fola Aiyesimoju was appointed as Chief Executive Officer (CEO) of UPDC. Aiyesimoju is a partner with Themis Capital which took up a significant stake in UAC in April this year.

The company’s poor Q3 2018 results have been largely due to a recession in the real estate sector and impairment of receivables as stated in the parent company’s Q3 2018 press release.

Jaiz bank

“Continued recession in the Nigerian real estate market led to a markdown of the carrying value of JV projects and impairment of related receivables. Investment property sales realised below book values resulted in an operating loss in the third quarter.”

The company’s poor fortunes have also taken a toll on the parent company, UAC of Nigeria Plc. UACN hit a 5 year low of N11 in September and has since fallen much lower.

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

Union Bank, LINKASSURE push NGX ASI into recovery

The market breadth closed positive with the bulls as LINKASSURE led 25 Gainers, and 16 Losers topped by NEM.

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Nigerian stock exchange market made a bullish recovery on the last day of the week’s trading session. This surge was bolstered by gains made by UBN and LINKASSURE amongst others. The All-Share Index increased by +0.21% to close at 39,198.75 from 39,114.73.

  • Nigerian Stock Exchange market value currently stands at N20.48 trillion. Its Year-to-Date (YTD) returns currently stand at -2.66%.
  • The market breadth closed positive with the bulls as LINKASSURE led 25 Gainers, and 16 Losers topped by NEM, showing a hint of consolation.

Top gainers

  1. LINKASSURE up +9.25% to close at N0.69
  2. JOHNHOLT up +9.26% to close at N59
  3. UBN up +9.09% to close at N5.40
  4. ROYALEX up +8.33% to close at N0.65
  5. CHIPLC up +8.33% to close at N0.39

Top losers

  1. NEM down -9.50% to close at N1.81
  2. COURTVILLE down -9.09% to close at N0.20
  3. SUNUASSUR down -8.47% to close at N0.54
  4. INITSPLC down -6.98% to close at N0.40
  5. ETERNA down -6.89% to close at N5.81

Outlook

The market recovered from a week-long loss as it posts profit at the end of the trading session.

  • Market sentiments tend toward bullish momentum as the NGX ASI closes with 25 Gainers and 16 losers.
  • Nairametrics however, advises cautious buying in this era of growing uncertainties.

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Markets

SEC plans to monitor foreign stock brokers in Nigeria

SEC is proposing tighter and stricter regulatory oversight and requirements for foreign stockbrokers in the country.

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Nigerian Stocks snap 7-year losing streak to post first gain in August

In an attempt to reduce the demand for foreign stocks in Nigeria, the Securities and Exchange Commission (SEC) is proposing tighter and stricter regulatory oversight and requirements for foreign stockbrokers in the country.

In an interview monitored by Nairametrics, the executive commissioner for operations of the SEC, Dayo Obisan revealed the commission was planning to actively monitor the local facilitators of foreign stocks.

“At least 400,000 Nigerians have invested in foreign stocks through brokers in the past 18 months,” Obisan said, with Nigerians actively trading or holding foreign equities now exceeding those investing in the local market and about 70% of these participants being less than 40 years of age.

This is despite the Nigerian Stock Exchange being dubbed the best performing last year after it gained 50% YTD. Stocks are however down 5% YTD.

In contrast, the S&P 500 Index is currently trading 14.50% YTD, creating a new all-time high.

Also, the value of transactions is down YTD as demand shifts from the Nigerian stock exchange market to the Cryptocurrency and foreign stock market.

“There is an increasing interest among the younger population and this is of concern to the commission primarily because it creates an avenue for exploitation,” Obisan said.

The SEC intends to license firms offering foreign stocks under a “digital sub-broker” regulation, which Obisan says should provide a form of clarity to their activities.

He also stated the requirement will ensure “regulatory responsibilities in on-boarding clients, custody of assets, and compliance with reporting requirements are met”.

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