The Nigerian stock market dipped by N52.1billion, as the market capitalisation of equities dropped from N14.70 trillion on monday to N14.65 trillion as at close of trading on Tuesday.
The All Share Index also depreciated by 0.35 per cent to close at 28,432.27 basis points while the year-to-date return dropped to 5.9 per cent.
Analysts attributed the development to the major price depreciation in banking stocks, which they believe led to sell-offs and that dragged the market lower.
They said the bearish trend in equities market was sustained as the price depreciation in Zenith Bank Plc, Dangote Sugar Refinery Plc and Guaranty Trust Bank Plc persisted on Tuesday.
Despite the downturn of Stock performance, investors in Union bank, Wapic Insurance, Law Union Insurance, Lasaco Assurance and Transnational Corporation have reason to smile as the value of their stocks grew in today’s trade session.
Union Bank of Nigeria and Wapic Insurance led the gainers chart on Tuesday as they both recorded 10% gain to close at N6.6 and N0.33 respectively. Law Union’s stock grew by 9.09% to close at N0.84, Lasaco Assurance gained 3.85% to close at N0.27 while Transnational Corporation gained 2.06% to close at N0.99.
NEM Insurance and Royal Exchange led the pool of the decliners on the bourse as they dipped 10% of their stock value to close at N2.16 and N0.27 respectively. Dangote sugar also recorded 9.78% loss to close at N12.45 followed by Chams Plc, which dipped 9.68% to close at N0.28 while Cap Plc rounded off the list with 9.6% loss to close at N22.6.
[READ MORE: These are best dividend stocks in 2019)
Top trades by volume
With regards to the actively traded stocks on the bourse today the FUGAZ dominated the list, as Zenith Bank traded in 68.48 million units of shares at N1.31 billion across 773 deals followed by First Bank Holdings, which traded in 32.66 million units of shares across 408 deals.
Access Bank traded in 28.93 million units of shares at N259.55 million across 237 deals, including UBA, which traded 23.63 million units of shares at N174.62 million across 325 deals while GTBank rounded off the list with trades in 13.27 million units of shares valued at N384.7 million across 257 deals.
GMD, 2 Executive Directors buy 5 million additional units of Zenith Bank Plc shares
In three separate transactions, major stakeholders purchased 5 million units of Zenith Bank’s shares.
Zenith Bank Plc, Group Managing Director, Mr Ebenezer Onyeagwu, and two Executive Directors, Messrs. Dennis Olisa and Ahmed Umar Shuaib, have purchased an aggregate of 5 million units of additional Zenith Bank Plc shares.
This was disclosed by the bank, in a notification sent to the Nigerian Stock Exchange, and seen by Nairametrics.
According to the notification, signed by the Company’s secretary, Michael Osilama Otu, the purchase was made in the bourse, over three transactions on the 16th and 17th of September, 2020.
As part of the regulatory requirements, the disclosure must be reported to the Nigerian Stock Exchange, especially when the trade is executed by a major shareholder or director of a listed firm.
Breakdown of the deal
According to the details of the deal verified by Nairametrics, Mr. Dennis Olisa pulled the highest deal as he purchased 2,000,000 additional units of Zenith Bank Plc’s shares at an average of N17.18 per unit, totaling N34.36 million. Mr. Ahmed Umar Shuaib also purchased 2,000,000 additional units of the Bank’s share, at an average price of N16.99 worth N33.98 million. Completing the trio was, Mr. Ebenezer Onyeagwu who purchased 1,000,000 additional units at an average of N17.05 worth N17.05 million.
This major purchase boosted the total number of trade deals (Volume) posted by the Bank in the NSE market, as the deals contributed about 11.61% of the Bank’s total deals between 16th and 17th of September, 2020.
What this means
Based on the recently released H1 2020 Financial Results of Zenith Bank, Mr. Ebenezer Onyeagwu had 45,500,000 direct shares as of June 30, 2020. Mr. Ahmed Umar Shuaib had 7,577,343 direct shares, while Mr. Dennis Olisa had 7,122,316 direct shares. All these remained unchanged from their reported shares in H1 2019.
With the addition of 1,000,000 shares, Mr. Ebenezer Onyeagwu’s stake increased to 46,500,000, indicating an increase of 2.19%. Mr. Ahmed Shuaib’s shares also leaped by 26.39% to 9,577,343, while Mr. Deniss Olisa’s shares increased by 28.08% to 9,122,316 direct shares.
This deal may signify that the Bank’s insiders expect an increase in share price. It is a positive signal to outsiders, coming from top insiders who are abreast with latest information on the Bank’s prospects.
This can play a vital role in stimulating a bullish trend. Zenith Bank’s share price is currently trading at N16.70 on the NSE.
Regardless of the impact of the pandemic on the income and revenue of banks, Zenith bank still remained one of the high-flying financial organizations in Nigeria. For example, the tier-1 bank’s gross earnings grew by 4.37% from N331.5 billion in H1 2019 to N346.1 billion in H1, 2020. Its Profit After Tax increased by 16.81% from N111.7 billion to N114.1 billion within the period under review. The aforementioned factors might have been the reason behind the recent bullish trend for its stock.
FG apologizes, says Self-Certification directive is not for everyone
The Federal Government has made clarifications concerning earlier announced Self-Certification Forms.
The Nigerian government has backtracked on its earlier issued guidelines on the new banking Self-Certification Forms, saying the notice does not apply to everyone.
On Thursday, the Nigerian government ordered all persons holding accounts across financial institutions and insurance firms, to complete and submit self-certification forms to their respective financial institutions.
Explore the Nairametrics Research Website for Economic and Financial Data
It stated, “This is to notify the general public that all account holders in Financial Institutions (Banks, Insurance Companies, etc.) are required to obtain, complete, and submit Self – Certification Forms to their respective Financial Institutions. Persons holding accounts in different financial institutions are required to complete & submit the form to each one of the institutions. The forms are required by the relevant financial institutions to carry out due diligence procedures, in line with the Income Tax Regulations 2019.”
However, on Friday morning, after receiving expected backlash on social media, FG attempted a clarification stating, “We apologize for the misleading tweets (now deleted) that went up yesterday, regarding the completion of self-certification forms by Reportable Persons,” and that, “the FIRS will clarify Nigerians on the objectives of the directive.”
We apologize for the misleading tweets (now deleted) that went up yesterday, regarding the completion of self-certification forms by Reportable Persons. The message contained in the @firsNigeria Notice does not apply to everybody. FIRS will issue appropriate clarification shortly pic.twitter.com/KBiPh0lCwJ
— Government of Nigeria (@NigeriaGov) September 18, 2020
The FIRS earlier today made a statement, that the guidelines are only for non-residents, and people paying tax in more than one country.
and other persons who have residence for tax purposes in more than one jurisdiction or Country. Financial Institutions are expected to administer the Self Certification form on such account holders when information at its disposal indicates that the Account holder is a person
— FIRS Nigeria (@firsNigeria) September 18, 2020
“The Self Certification Form is basically to be administered on Reportable persons, holding accounts in Financial institutions, that are regarded as “Reportable Financial Institutions” under the CRS. Reportable persons are often non-residents and other persons, who have residence for tax purposes in more than one jurisdiction or Country.”
“The information that indicates an account holder is a resident for tax purposes in more than one jurisdiction, is expected to be available to Financial Institutions during account opening processes, for the KYC and AML purpose.” the statement read.
This is a copy of the Self-Certification form govt. wants targeted account holders to fill
The FIRS posted a copy of the self-certification form on its website.
The Nigerian government on Thursday tweeted an order to all persons holding accounts across financial institutions and insurance firms to complete and submit Self-certification forms.
This was announced by the Federal Government in a social media statement on Thursday. The FG warned that failure to comply may include a monetary penalty or inability to operate the account.
The Government also urged Nigerians to comply with the requirements and execute all forms needs, if not sanctions may be introduced in the forms of monetary penalty or inability to operate the account.
The government however deleted the tweet on Friday, explaining that it does not apply to everybody, contrary to what it had earlier tweeted. The FIRS claims those affected are non-residents.
Nairametrics has seen a copy of the “Self-Certification Forms” detailing the information that account holders are meant to share. See below;
NB: This article has been updated to reflect new information regarding who the accounts holders (reportable persons) are.