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CORPORATE ACTIONS: Rocky Results and Markdowns

@lawunionrock was the only firm that released its results on the @nsecontact last week

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Corporate Actions

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 release of quarterly and full year results, payment of dividends, closing of shareholders’ registers, announcing qualification dates and Annual General Meeting (AGM) dates.

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Here is a review of corporate actions that took place last week.

Rocky results: Law Union and Rock Insurance Plc was the only firm to release financial statements last week. The company released its results for the 2018 financial year and first quarter ended March 2019. The two showed a weakness in bottom line.

Profit after tax fell by 71% to N263 million in the 2018 financial year, due to a 117% spike in net benefits and claims. The company however declared a 2 kobo dividend. Qualification date for the dividend is the 31st of May.

The insurance firm also struggled in the first quarter of 2019 with profit after tax declining by 41.9% to N65.3 million in 2019.

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Appointments and resignations: AXA Mansard Plc announced the resignation of Mrs Karima Silvent a Non Executive Director, and the appointment of Sohail Ali as an Executive Director

Sohail will oversee the insurer’s actuary division.

Sterling Bank has appointed Femi Jaiyeola as Chief Compliance Officer. Prior to his appointment, Jaiyeola was the GM and Chief Compliance Officer at Diamond Bank.

African Alliance Plc appointed two Non Executive Directors Slyva Ogwemoh (SAN) and Ahmad Nahuche.

Annual General Meetings held: Unilever Nigeria Plc, AXA Mansard Plc, Champion Breweries Plc and Wema Bank Plc all held their AGMs this week.

AXA Mansard and Champion Breweries did not declare dividends.

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Management of the insurance firm had stated that the move was in a bid to meet new NAICOM requirements, and assured shareholders that dividends would be paid next year.

Patricia

Mark downs: Portland Paints Plc, Prestige Assurance Plc, CHI Plc, AIICO Insurance Plc, and Caverton Offshore Support Group (COSG) Plc were all marked down this week.

A mark down simply means that a dividend was subtracted from the stock’s share price.

Corporate Actions for next week

11 Plc (formerly known as Mobil Oil Nigeria), Infinity Trust Mortgage Bank, Seplat Petroleum, Nigerian Breweries  and Newrest ASL will be holding their Annual General Meeting

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 onome.ohwovoriole@nairametrics.com

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Naira gains against the dollar at I&E window, as forex liquidity goes up by 358%

The performance of the naira at the I&E window, however, seems to contrast with that at the parallel market where the local currency lost N3 to a dollar as it depreciated to N450 to a dollar on Friday.

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Central Bank Continues intervention in Forex market to stabilize Naira, Naira to depreciate slightly over $1.52 billion maturing contracts expires, Naira hits N388.84 to $1 at the currency spot market, Investors and Exporters (I&E) window, Naira weakens against the dollar by 1.14% amidst uncertainty

The naira has appreciated to N386.50 to a dollar at the Investors and Exporters (I&E) window, despite the uncertainty of the foreign exchange market. The local currency was strengthened by N0.20 against the dollar, when compared to the N386.70 to a dollar that it traded on Thursday, June 4, 2020. 

The exchange rate at the I&E window is different from the Central Bank of Nigeria’s published exchange rate, which currently stands at N360/$1. This is also different from the exchange rate at the parallel market, which depreciated to N450 to a dollar, according to information on AbokiFX as of Friday, June 5, 2020. 

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Available information from the daily trading at FMDQ (where FX is traded by importers and investors) shows that the naira improved against the dollar by N1.25, closing at N386.50 to a dollar, as against the indicative rate of N387.75 to a dollar that it opened with on Friday. 

READ ALSO: Nigeria’s foreign reserves hit $36.57 billion; Emefiele keeps his word on defending the naira

A cursory look at the data from the FMDQ shows that the turnover for the day went up by about 358% at $112.89 million. This is against the $24.64 million turnovers that was recorded on Wednesday, June 3. 

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The performance of the naira at the I&E window, however, seems to contrast with that at the parallel market where the local currency lost N3 to a dollar as it depreciated to N450 to a dollar on Friday as against the previous day’s rate of N447 to a dollar. 

The Central Bank of Nigeria had promised to provide more liquidity in the foreign exchange market, especially for genuine users while also discouraging currency speculators from heating up the market. 

The apex bank yesterday debited the accounts of 25 commercial banks with the sum of N460 billion naira ($1.2 billion) as additional cash reserves for missing cash reserve ratio (CRR). Apart from serving as penalty to the banks, this also reduces the excess cash in the money market which might be used to put further pressure on the foreign exchange market. 

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Cryptocurrency

Satoshi Nakamoto highly unlikely to spend his 1.1 million BTC

Bitcoin’s creator is highly unlikely to use his BTC, which has remained dormant since 2009, since the start of the flagship cryptocurrency. 

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Cryptocurrencies, Meet the cryptocurrency catching the world’s attention, Theta Fuel gains 630% in 5 days., U.S regulator invites Banking and Crypto industry leaders for partnership

The Patoshi Pattern exposes the privacy flaws of an earlier protocol, v.01, to show evidence of blocks designed by Satoshi Nakamoto.  

According to Patoshi Pattern researcher, Sergio Demian Lerner, Bitcoin’s creator is highly unlikely to use his BTC, which has remained dormant since 2009, since the start of the flagship cryptocurrency. 

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Sergio Demian said: 

“Assuming Satoshi is Patoshi, I believe, based on the history of Satoshi coins, that Satoshi won’t use his coins ever. Therefore, I think that there couldn’t be a fairer and a more philanthropic way for Bitcoin to be born.” 

READ MORE: The odds against Bitcoin- Goldman Sachs

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What you need to know about Satoshi Nakamoto: Bitcoin was created in 2008 by an unidentified individual or group using the name Satoshi Nakamoto, in 2009. The source code was released as an open-source code. The digital coin (BTC) is created as a reward for a process known as mining. 

Last month, Bitcoin investors and traders invoked the Patoshi Pattern concept, to attribute 50 BTC mined during the early days of Bitcoin which suddenly moved last month, to the anonymous founder of the cryptocurrency.  

Sergio Demian Lerner downplayed such a hypothesis, explaining that the block responsible for the 50 BTC fell outside blocks mined using the Patoshi Pattern. 

The Patoshi Pattern depends on the assumption that Satoshi Nakamoto mined during the start of Bitcoin to confirm his concepts, and that he mined using v.01 of the Bitcoin Code.  

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Naira falls at the black market despite growing Nigerian foreign exchange reserves

According to the latest data obtained from the Central Bank of Nigeria (CBN), Nigeria’s foreign exchange reserves now stand at $36.57 billion.

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The naira depreciated on Friday at the parallel segment of the foreign exchange market against the United States dollar. It sold at N450 to $1, compared to N447 against the dollar, which was recorded on Thursday as some importers rushed to meet their foreign exchange payment obligations before the close of the week. 

In addition, it should be noted that just recently, Nigeria’s central bank had paused the selling of U.S dollars to foreign investors and manufacturers seeking to retrieve their funds at the height of the oil crisis. This was done in a bid to protect the value of the naira, according to reports credited to Bloomberg news. 

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READ ALSO: CBN reacts to videos, pictures of new N2,000 and N5,000 in circulation

“Remedial policy action was taken by the central bank and increased government borrowing will help contain liquidity pressures,” said Mahmoud Harb, a director at Fitch Ratings.  

Meanwhile, according to the latest data obtained from the Central Bank of Nigeria (CBN), Nigeria’s foreign exchange reserves now stand at $36.57 billion, having increased sharply from $33.42 billion as of April 29, 2020. This shows a gain of $3.15 billion dollars in 36 days. 

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READ ALSO: Forex turnover drops by 28.3% as naira depreciates against the dollar at I&E window

The macro fundamentals surrounding Nigeria’s major export, including the recent surge in crude oil prices to about $41, seem to have helped Nigeria’s foreign reserve to rise at such a steady pace. 

However, according to data recently obtained from Bloomberg news, twelve-month naira forwards traded at N454.50 per dollar at 11.43 a.m. on Wednesday, down from a high N522.56 to the dollar on April 20. This shows that currency traders are bullish on the naira at the mid-term macro level. 

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