Markets
The Japaul bullrun continues
Japaul Oil and Maritime was the best performing stock on the @nsecontact this week appreciating by 39.29%
The Nigerian Stock Exchange ended the first trading week in the month of May on a negative note. The All Share Index closed at 29,212 basis points, down 1.78%. Year to date, the index is down 7.06%.
32 equities appreciated in price during the week, higher than 30 in the previous week. 44 equities depreciated in price, higher than 40 equities in the previous week, while 92 equities remained unchanged, lower than 97 equities recorded in the preceding week.
Gainers
Japaul Oil & Gas Services Plc
Japaul Oil and Maritime Services was the best performing stock of the week, continuing a bull run that started last month. The stock gained 39.29%, opening at N0.28 and closing at N0.39, up N0.11.
Year to date, the stock is up 85.71%.
Julius Berger Nigeria Plc
Julius Berger opened the week at N22.50 and closed at N26.95, up N4.45 or 19.78%. Year to date, the stock is up 34.08%.
Forte Oil Plc
Forte Oil gained 19.69% this week. The stock opened at N29.20 and closed at N34.95, up N5.75. Year to date, the stock is up 21.71%.
The company this week released its results for the first quarter ended March 2019. Revenue increased from N28.3 billion in 2018 to N42.5 billion in 2019. Profit for the period (including discontinued operations) rose from N2.9 billion in 2018 to N3.3 billion in 2019.
The company has proposed a special dividend of N1.15 from the proceeds of the divestment of its subsidiaries, which resulted in an overall net gain of N2.67 billion.
While the sale of AP Oil and Gas Ghana to Cobalt International Services (Ghana) has been concluded, the sale of Forte upstream and Amperion power are subject to relevant regulatory and contractual approvals.
The company has entered into sale and purchase agreements for Amperion Power and Forte upstream with Calvados Global Services and Gbonka Oil and Gas Limited respectively.
Jaiz Bank Plc
Jaiz Bank makes a surprise entry into the gainers chart today. The stock opened at N0.48 and closed at N0.54, up N0.06 or 12.50%.
This week, the bank released its results for the first quarter ended March 2019. Total income increased from N1.6 billion in 2018 to N2.3 billion in 2019. Profit before tax rose from N146 million in 2018 to N476 million in 2019. Profit after tax also increased from N124 million in 2018 to N424 million in 2019.
Year to date, the stock is up 8%.
UACN Property Development Company Plc
UPDC appreciated by 12% this week. The stock opened at N1.50 and closed at N1.68, up N0.18. Year to date, the stock is down 12.04%.
The company released its results for the first quarter ended March 2019, this week. Revenue dipped from N591 million in 2018 to N507 million in 2019. The company’s losses for the period also rose from N899 million in 2018 to N1 billion in 2019.
Transcorp Plc
Transcorp Plc opened the week at N1.12 and closed at N1.25, up N0.13. Year to date, the stock is down 5.3%
This week, the company announced that a consortium (comprising itself and Transcorp Power) had won a bid for the Afam Power station). The consortium bid N105.3 billion.
Caverton Offshore Support Group Plc
Caverton appreciated by 11.52% this week. The stock opened at N2.69 and closed at N3.00, up N0.31 or 11.52%. Year to date, the stock is up 56.2%.
The company released its Q1 2019 results. Revenue jumped from N4.5 billion in 2018 to N8.3 billion in 2019. Profit before tax also surged from 476 million to N1.2 billion in 2019. Profit after tax also increased from N293 million in 2018 to N793 million in 2019.
Courteville Business Solutions Plc
Courteville opened the week at N0.20 and closed at N0.22, up N0.02 or 10%. Year to date, the stock is up 10%.
This week, the company released its results for the first quarter ended March 2019. Revenue declined by 12% from N308 million in 2018 to N270 million in 2019. Profit before tax however increased from N30.8 million in 2018 to N39.5 million in 2019. Profit after tax also rose from N23.9 million in 2018 to N30 million in 2019.
Veritas Kapital Assurance Plc
Veritas Kapital also gained 10% this week. The stock opened at N0.20 and closed at N0.22, up N0.10. Year to date, the stock is down 4.35%.
Dangote Flour Mills
Dangote Flour Mills rounds up the top 10 gainers for the week. The stock appreciated by 9.97%, opening at N15.55 and closing at N17.10. Year to date, the stock is up 149.64%.
This week, the company released its results for the first quarter ended March, 2019. Revenue fell from N26.5 billion in 2018 to N22.9 billion in 2019. The firm made a N3.5 billion loss before tax in 2019, as against a profit before tax of N2.2 billion in 2019. Loss after tax stood at N2.8 billion in 2019, as against a profit after tax of N1.5 billion in 2018.
Losers
Goldlink Insurance Plc
Goldlink Insurance was the worst performing stock this week. The stock declined by 18.1%, opening at N0.44 and closing at N0.36, down N0.08. Year to date, the stock is down 32.08%
First Aluminum Plc
First Aluminum Plc shed 12.5% this week. The stock opened at N0.48 and closed at N0.42, down N0.06. Year to date, the stock is
The company this week announced it the resignation of its Managing Director Elias Igbinakenzua and the appointment of Callistus Udalor, the former Managing Director, as his replacement.
Royal Exchange Plc
Royal Exchange Plc shed 11.54%. The stock opened at N0.26 and closed at N0.23, down N0.03. Year to date, the stock is however up 4.5%.
Total Nigeria Plc
Total Nigeria Plc opened the week at N182 and closed at N162, down N20 or 10.99%. The stock is trading at its lowest price point this year, and is down 20.2% year to date.
The decline in the results may be due to the company’s poor Q1 2019 results. While revenue increased from N75.6 billion in 2018 to N77.4 billion in 2019, the firm incurred a loss before tax of N418 million as against a N2.6 billion profit before tax earned in 2019.
Loss after tax stood at N474 million in 2019 as against a profit before tax of N1.6 billion in 2018.
Afromedia Plc
Afromedia Plc declined by 10% this week. The stock opened at N0.50 and closed at N0.45, down N0.05. Year to date, the stock is down by the same margin.
McNichols Plc
McNichols Plc opened the week at N0.55 and closed at N0.50, down N0.05 or 9.09%. Year to date, the stock is up 6.38%.
Academy Press Plc
Academy Press Plc opened at N0.33 and closed at N0.30, down N0.03 or 9.09%. Year to date, the stock is down 40%.
NPF Microfinance Bank Plc
NPF Microfinance Bank declined by 9.03% this week. The stock opened at N1.55 and closed at N1.41, down N0.14. Year to date, the stock is down 14.55%.
Cutix Plc
Cutix Plc opened at N2.05 and closed at N1.87, down N0.18 or 8.78%.
Year to date, the stock is up 14.02%.
Oando Plc
Oando Plc rounds up the top 10 losers for the week. The stock opened at N5.30 and closed at N4.85, down N0.45.
Year to date, the stock is down 3%.
Cryptocurrency
Dogecoin gains 50% in less than 24 hours, highest single-day gain since 2017
The fast-growing altcoin has a block period of 1 minute, and the total supply is unlimited.
The world of cryptocurrency got another shocker as a fast-growing altcoin gained 50% some hours ago, the highest single-day percentage gain since 2017. This was captured by a leading crypto researcher, Ryan Watkins.
Dogecoin going vertical.
Up 50%+ in last 24 hours. Highest single day percent gain since 2017.https://t.co/RHtsjjI7X7
— Ryan Watkins (@RyanWatkins_) July 8, 2020
Data from Coinmarketcap shows that the cryptocurrency is the 27th most valuable crypto asset, with a market capitalization of $528.3 million.
Dogecoin is presently trading at $0.004217 up 51.93% at the time this report was drafted.
Quick fact: Dogecoin is a type of digital coin that is decentralized, and facilitates peer-to-peer digital transactions. This means you can send money online with much ease. It’s usually referred to as “the internet currency.”
READ MORE: Best time to make money trading BTCs
It is different from BTC’s proof-of-work protocol in many ways, one of which is the Scrypt technology. The fast-growing altcoin also has a block period of 1 minute, and the total supply is unlimited, meaning that there is no limit to the amount of Dogecoin that can be mined.
“The recent rise of dogecoin, a meme coin, should serve as a reminder to everyone in the space that the most popular use case for crypto is still pure speculation,” said Anil Lulla, a former analyst at Bloomberg and co-founder of cryptocurrency research firm, Delphi Digital.
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Global search interest on “How to buy a dogecoin” has also skyrocketed from a score of 25 to 100, the highest possible search popularity score, over the past few days, according to 12-month Google Trends data analyzed by CoinDesk.
Some of the videos on TikTok, a newly popular social media platform, garnered more than 100,000 “likes,” while all videos with the “dogecoin” hashtag amassed several million.
Currencies
U.S dollar gains against major currencies, U.S Fed warning limits upside
The U.S. Dollar Index tracks the American dollar against a basket of other major currencies.
The American dollar gained on Wednesday at London’s trading session, with global investors and currency traders turning to the safe-haven asset amid a resurgence of COVID-19 caseloads.
The American Dollar Index, which monitors the U.S dollar against a basket of other currencies, gained 0.06% to 96.907 at 5.33 am local time.
However, many currency traders’ positive bias on the greenback further weakened over a warning from several U.S. Federal Reserve officials that the rising number of COVID-19 caseloads could distort the fragile economic recovery, with some global central banks stimulus programs due to expire soon.
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“The mood changes day by day, but the dollar looks to be supported for now as investors turn more cautious about the virus,” Yukio Ishizuki, foreign exchange strategist at Daiwa Securities, told Reuters.
Quick fact: The U.S. Dollar Index tracks the American dollar against a basket of other major currencies (like the Japanese yen, British pound sterling, Swedish Krona, Euro). Individuals hoping to meet foreign exchange payment obligations, via dollar transactions to countries like Europe, and Japan, would need to pay less dollars in meeting such obligations.
READ MORE: Gold price rises further due to influx of new COVID-19 cases
“The Fed’s comments on the economy sound sombre. There’s reason to worry because it is hard to see when the virus will be brought under control,” Yukio added.
Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, spoke about the fundamentals triggering the U.S index volatility. He said:
“The USD is stronger this morning, aided by risk aversion and perhaps the continued run of surprisingly strong US data.
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“However, the US data’s comfort blanket is being throttled by the rising COVID-19 case count in many US states that might point to renewed economic headwinds ahead.”
Currencies
Exchange rate remains stable as CBN “adjust official rates” from N360 to N381/$1
The CBN still continues to warn against currency speculators who patronize the black market.
Data published on the website of the FMDQ on Tuesday reveals that the CBN official rate has been adjusted from N360 to a dollar to N381 to a dollar sending mixed messages to traders who wonder if the CBN has devalued again. 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 reports “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”.
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NAFEX: The exchange rate between the naira and dollar at the Investors and Exporters (I&E) window remained stable on Tuesday, closing at N386.50 to a dollar. This was the same rate that was recorded on Monday as traders continue to mull over CBN’s adjustment of the exchange rate at the SMIS window. The opening indicative rate was N387.18 to a dollar on Tuesday. This represents an 18 kobo drop when compared to the N387 to a dollar opening rate that was recorded on Monday.
Parallel Market: At the black market where forex is traded unofficially, the naira remained stable as it closed at N461 to a dollar on Tuesday which was the same rate that it exchanged on Monday.
Nigeria continues to maintain 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.
READ ALSO: NSE Lists LAPO Microfinance Bank’s N6.2billion bond
Forex Turnover
Meanwhile, forex turnover at the Investor and Exporters (I&E) window had a rebound on Tuesday, July 7, 2020, as it gained 918.4% day on day, a significant increase from the figure that it achieved on Monday 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 rose from $10.15 million on Monday, July 6, 2020, to $103.37 million on Tuesday, July 7, 2020, representing a 918.4% gain on a day-to-day basis. This is a reversal from the previous day’s drop in turnover but falls short of the $200 million mark that was in January and last week.
The improved liquidity appears to have brought some measure of temporary stability in the foreign exchange market.
READ MORE: Analysts predict outlook for naira as forex unification plans gain momentum
Forex Sales Data
The latest figure from the CBN shows that the apex bank injected $11.5 billion foreign exchange into the economy in the first quarter of 2020. The data showed that CBN supplied $2.96 billion, $3.39 billion and %4.7 billion in the months of January, February and March respectively into the forex market.
The I&E window, small and medium enterprises and invisible segments had a total of $7.23 billion, the BDC segment got $3.6 billion and the interbank and WDA/RDAS received $0.67 billion.
The CBN suspended the sales of forex due to the lockdown in the country in April which was triggered by the coronavirus outbreak. It however resumed partial sales of forex in May to commercial banks for households and SMEs making essential imports.
Forex Liquidity Issues
The volatility and uncertainty of the forex market still persist due to accumulated demand and liquidity shortages across markets. The rise in demand and contrasting drop in supply has called for another round of devaluation, which the CBN has insisted it had plans to implement.
The CBN on Friday adjusted the naira at the retail forex auction from N360 to a dollar to N381 to a dollar in a move that most analysts see as part of the plans to unify the exchange rate of the Naira. A devaluation last occurred in March. The apex bank wants to unify the exchange rate to conserve the dwindling external reserves which have been hard hit by demand by ever-increasing importers and the foreign investors wishing they exit the country.
READ MORE: IMF pressures Nigeria to fast track exchange rate unification
This current step taken by the CBN has moved the retail auction for importers and individuals, which is the official rate, closer to the over-the counter-spot for investors and exporters. Nairametrics spoke to some traders who are still reviewing what the latest move by the CBN could mean on the future price of forex. Whilst some believe this is a major step towards reunification others believe the real test of the value of the exchange rate could be when the economy finally opens. For now, projection is all speculation, one trader informs Nairametrics.
The CBN still continues to warn against currency speculators who patronize the black market, thus widening the gap between it and the I&E window. The CBN maintains that the perceived demand cannot be substantiated following the drop in economic activities induced by the COVID-19 pandemic suggest demand should be low due to travel restrictions and drop-in economic activities.
The further decline in liquidity could further fuel speculations in the black market where the exchange rate has traded at a premium of N60+ over the last few weeks. The CBN claims most of the demand being cited is not represented by any official documentation and that it has informed foreign investors with genuine forex demand to be “patient” and that they will get their forex.
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