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Markets

CORPORATE ACTIONS: Another Yhello Headache

Here is a rundown of corporate actions that took place at the @nsenigeria last week and those expected in the week ahead.

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Corporate Actions

Corporate actions are decisions taken by companies’ boards of directors or management teams, that could have impact 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 rundown of corporate actions that took place last week and those expected this week.   

Corporate Actions that held this week  

Kapital losses

Omoluabi Mortgage Bank Plc and Veritas Kapital Assurance Plc released their results this week. Omoluabi released its audited full year 2018 and first quarter 2019 results. Veritas released its audited results for the 2018 financial year.  

Omoluabi had a decline in its full year 2018 and first quarter 2019 profit.

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Veritas (formerly known as Unity Kapital) incurred a loss after tax for the second year running.  The N695 million loss, was largely due to a 45% spike in management expenses to N2.9 billion in 2018.   

Annual General Meetings (AGMSheld  

AIICO Insurance, Caverton Offshore Support Group Plc, Consolidated Hallmark Insurance Plc, NCR Nigeria Plc, Pharmadeko Plc , Glaxosmithkline Consumer Nigeria, and Berger Paint Nigeria Plc all held their Annual General Meetings.  

Markdowns 

Cadbury Nigeria Plc’s share price was marked down by N0.25 this week. Ex dividend price was N10.25.

 UAC of Nigeria Plc’s share price was marked down by N0.64 this week. Ex dividend price was N6.61.  

Another Yhello Headache 

MTN Nigeria, in a notice sent yesterday, disclosed that it had received a letter from the Economic and Financial Crimes Commission (EFCC) requesting documentation pertaining to its listing on the Nigerian Stock Exchange (NSE). The company however denied any form of wrongdoing. There had been  media reports of a raid by the agency on the company’s head office located in ikoyi.

The telco and the NSE had issued press releases earlier in the week, explaining the reasons behind the illiquidity in the trading of the company’s shares.

The move adds to the burden of an ongoing court case against the office of the Attorney General of the Federation (AGF). The OAGF has accused MTN Nigeria of tax evasion a charge it has denied. 

A New ED

Conoil Plc has appointed Ismail Salam as acting Executive Director (ED) Finance.  

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Corporate Actions taking place next week 

Annual General Meetings  

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Courteville Business Solutions Plc, Nestle Nigeria Plc, Portland Paints and Products Plc, May & Baker Plc, and Livestock Feeds Plc will all be holding their Annual General Meetings (AGMs) this week.  

Courteville Business Solutions Plc, and Nestle Nigeria will be holding their AGMS on the 28th of May, 2019.  

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Portland Paints and Products Plc, and May & Baker Plc will hold theirs on the 30th of May, 2019.   

Livestock Feeds Plc will hold its AGM on the 31st of May, 2019.  

Facts Behind the Figures 

Ikeja Hotel Plc will hold a Facts Behind The Figures session at the Nigerian Stock Exchange on Tuesday May, 28, 2019.  

 

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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Currencies

Naira falls across forex markets as CBN moves against IMTOs

The exchange rate at the black market where forex traded unofficially depreciated at N477/$1.

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Naira falls across forex markets as businesses resume after public holidays

On January 22, 2021, the exchange rate between the naira and the dollar depreciated closing at N394.17/$1 at the NAFEX (I&E Window) where forex is traded officially.

Forex turnover, however, dropped by about 42.2% as pressure on the foreign exchange market continues.

The Central Bank of Nigeria (CBN) in a new circular, read the riot act to the International Money Transfer Operators (IMTOs) as they have threatened to sanction some of them who still facilitate diaspora remittances in naira, contrary to its earlier directive that it must be in foreign currency.

READ: Nigeria faces prolonged exchange rate crisis as oil prices remain stuck at $40

Also, the exchange rate at the black market where forex traded unofficially depreciated at N477/$1. The exchange rate at the parallel market closed at N475/$1 on the previous trading day of January 21, 2021, representing a N2 drop.

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The exchange rate disparity between the parallel market and the official market is about N82.83, representing a 17.36% devaluation differential.

READ: CBN to prevent exporters with unrepatriated export proceeds from banking services

The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Friday, closing at N394.17/$1. This represents a 17 kobo drop when compared to the N394/$1 that it closed on the previous trading day.

  • The opening indicative rate was N393.15 to a dollar on Friday, this represents a N1.01 gain when compared with the N394.16 to a dollar that was recorded on Thursday, January 21, 2021.
  • The N395 to a dollar was the highest rate during intra-day trading before it closed at N394.17 to a dollar. It also sold for as low as N390/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window dropped by 42.2% on Friday, January 22, 2021.
  • According to the data tracked by Nairametrics from FMDQ, forex turnover declined from $77.04 million on Thursday, January 21, 2021, to $44.51 million on Friday, January 22, 2021.
  • The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand, and a shaky economy that has been hit by the coronavirus pandemic.
  • There are fears that the exchange rate at the black market might be under pressure in the coming weeks as importers scramble for dollars to meet their demands.

READ: A summer of higher food prices, limited room for monetary policy

Oil price steady rise

Brent crude oil price is at about $55.34 per barrel as of Monday morning, as it moves towards the $60 mark, a strong sign that global demand could sustain price increases in 2021.

  • This appears as a boost to Nigeria as the country’s crude oil price benchmark for 2020 was $40 while it projected an oil production output of 1.8 million barrels per day.
  • Nigeria has a production capacity of 2.5 million barrels per day but is subject to OPEC’s crude oil production cuts, which are expected to help sustain higher oil prices.
  • The higher oil prices and steady production output have positively impacted Nigeria’s external reserves, rising sharply to $36.304 million according to central bank data dated January 14, 2020.
  • This is the highest level since July 2020 and a sign that higher oil prices and steady output levels may be contributing significantly to Nigeria’s foreign exchange position.

READ: A Joe Biden presidency and its impact on Nigeria’s oil

Nigeria rising external reserves

  • The external reserve has risen to $36.508 billion as of January 21, 2021.
  • Nairametrics had earlier reported that the government may have taken receipt of the $1-1.5 billion World Bank loan.
  • The external reserves have increased by $1.135 billion since December 31, 2020, when it closed the year at $35.3 billion.
  • Nigeria also needs the external reserves to hit $40 billion if it is to adequately meet some of the pent up demand that has piled up since 2020 when oil prices crashed and the pandemic caused major economic lockdowns.

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Cryptocurrency

Chainlink defying law of gravity, now more valuable than Litecoin

Chainlink traded at $25.31 with a daily trading volume of $3.9 billion and gained about 20,000 percent since its inception.

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List of Cryptos not worth buying

Chainlink (LINK) continued its bullish rally amid strong buying pressure in recent days, thereby setting a new all-time high at $25.50 and surpassing Litecoin (LTC) in terms of total market cap to become the seventh most valuable crypto.

READ: Nigeria leads the world in Bitcoin searches on Google

What you should know: At the time of drafting this report, Chainlink traded at $25.31 with a daily trading volume of $3.9 billion. It has gained about 20,000 percent since its inception.

  • Chainlink is a blockchain that is designed to bridge the space between blockchain technology-based smart contracts (created by ETH), and other user programs.
  • Since blockchains by principle can’t have access to data outside their paths or networks, a DeFi instrument is needed to facilitate data feeds in smart contracts, and Chainlink helps to solve such needs.

READ: 100% of Chainlink (LINK) wallets are now in profit

Specta

Recall some days back, a highly revered crypto strategist, Michaël van de Poppe, listed some crypto assets that might likely overtake XRP as Polkadot did. Michaël, via his Twitter handle, revealed the cryptos expected to surpass XRP.

“Polkadot takes over spot 4 over XRP by market capitalization. Just a matter of time before Cardano, Chainlink, and Litecoin surpass XRP too.”

READ: List of cryptos likely to overtake XRP

READ: Binance offers DeFi coders $100,000; DeFi market value hits $8 billion

For enterprises, Chainlink is an abstraction layer that securely connects smart contracts to existing backend systems, massively expanding the kinds of business use cases that are possible, from parametric weather insurance to supply chain tracking.

READ: CHAINLINK now sixth most valuable crypto, keeps setting new highs

Should you buy it now?

Many individuals have the impulse to enter a position when the price is soaring. But those support/resistance flips actually give the best entries. Specifically, the first area of concern for global investors is the $25 resistance level, on the bias that some crypto traders anticipate profit-taking amid its impressive run in recent days.

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Commodities

Oil prices fall under pressure over rising number of COVID-19 cases in China

Brent crude was down by 0.24% to trade at $55.12 barrel, and WTI futures inched down by 0.10% to $52.22 a barrel.

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Crude Oil worker, OPEC, oil prices, Bulls hit back to support US crude oil amid panic sell- offs in global equity markets, Nigeria’s local oil players smashed by low crude oil prices

Oil prices drifted lower at the first trading session in London, recording a second consecutive trading session of losses, as the ever-rising number of COVID-19 cases, particularly in China, raise energy demand fears.

What you should know: At the time of writing this report, Brent crude was down by 0.24% to trade at $55.12 barrel, and West Texas Intermediate futures inched down by 0.10% to $52.22 a barrel.

China’s National Health Commission revealed that the world’s largest importer of oil recorded 124 cases on Jan. 24, up from 80 earlier, which is the worst wave of new COVID-19 infections seen since March 2020.

READ: COVID-19 mutant strain causes chaos at Oil markets

Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, spoke on current fundamentals weighing on oil prices, at least for the near term. In addition, he spoke on how the COVID-19 pandemic seemed to distort the bullish rally.

Specta

“The Lunar New Year headline heebie-jeebies did a number on oil prices into weeks end. Yet after hitting an intraday low US$54.48 per barrel, Brent crude managed to close above US$55 despite the clear demand impacts of lockdowns in Europe and additional measures in China.

READ: Oil traders weigh if COVID-19 support programs will buoy economic growth

The enormous question mark remains around demand and supply.

  • The street uniformly downgraded Q1 21 market in the world ex-China due to clear demand impacts of lockdowns in Europe to start the year. But last week it was back to the downward demand revision drawing board.
  • More worryingly, however, since Asia has been the backbone of physical crude oil demand, this time it was to down-ballot China consumption as lockdowns spread in the country just weeks ahead of the Lunar New Year travel surge.”

READ: Young Nigerians share their experiences on the cost of working from home

What to expect: Still, the one million barrels per day of additional Saudi curbs over February and March should alleviate the currently projected level of attrition in global demand recovery without much impact on the path of OECD inventory draws.

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