Connect with us
nairametrics

Billionaire Watch

Nigerian billionaires lose billions amid COVID-19 pandemic

Nigerian billionaires recorded more losses than gains amid COVID-19 due to the volatility of the stock market occasioned by the killer disease.

Published

on

Nigerian billionaires lose billions amid COVID-19 pandemic

The year 2020 began with lots of predictions and promises, but the volatility in the stock market (which was occasioned by the Coronavirus pandemic) was not top on the list.

On February 27, Nigeria recorded the index case of the Coronavirus pandemic, an Italian who visited the country for business reasons. A month later, the federal government was preparing to announce a lockdown of the economy as part of measures to curb the seemingly unpredictable increase in the spread of the Coronavirus.

The lockdown which commenced 2 days after the announcement brought a lot of uncertainty into the financial markets, and this definitely comes with huge consequences for individual and corporate investors.

For many investors around the world, the first four months of the year was a bad one. There were fluctuations and sudden declines in stock prices. And for top Nigerian billionaires, it was definitely more of the losses than the gains. This article examines how they performed in the last two months, from February 29 after the index case was Q1 2020.


Alhaji Aliko Dangote 

Being the richest man in Nigeria is no mean feat, yet Dangote has been able to maintain this title for years without breaking a sweat. However, the Coronavirus pandemic has taken a bite out of the billionaire’s billions.

GTBank 728 x 90

By the end of February 2020, Dangote’s 14,500,315,501 direct shares in Dangote Cement Plc worth N2,465,053,635,170 at the share price of N170 per unit, while the 27,642,637 shares which he controls through Dangote Industries Limited were worth N4,699,248,290 at the same share price.

By implication, the total worth of his shareholding in Dangote Cement Plc as at February 29, 2020, was N 2,469,752,883,460‬—over N2.4 trillion.

(READ MORE: 10 fantastic things Aliko Dangote has done in the last 10 years)

Deal book 300 x 250
GTBank 728 x 90

The value slid downwards hitting N129.70 at the end of March, before rising slightly to N130 at April 30.

At this time, Dangote’s indirect shares were worth N3,593,542,810 while his direct shares were worth N1,885,041,015,130 summing up to N1,888,634,557,940 (over N1.8 trillion).

By comparing N 2,469,752,883,460‬, the value as at February 29, with N1,888,634,557,940 as at April 30, we can see that the billionaire’s assets in Dangote Cement Plc crashed by N 581,118,325,520 (N581 billion).

By any standards, this was no small loss.

Stock prices at Dangote sugar also suffered a similar fate. Starting at N14.00 per unit on January 1, the stock experienced fluctuations before closing the quarter at N10.00 per unit. Dangote’s 8,775,541,295 direct and indirect shares were valued to be worth N122,857,578,130.00 (N122.85 billion) at a share price of N14.00 on January 1.

Jaiz bank ads

Twelve weeks later, with the stock price down to N10.00 per unit, the worth of the same shares had dropped to N87,755,412,950.00 (N87.75 billion), a heartbreaking loss of N35,102,165,180.00 (N35.1 billion).

Fidelity ads

READ ALSO: Remdesivir has received FDA’s emergency approval to treat COVID-19, according to Trump

Stock prices at Dangote sugar, however, took a different trend for this period, starting at N12.1 on February 29 and appreciating almost 3% to 12.45 at the end of April.  

The billionaire directly owns 653,095,014 shares and indirectly owns 8,122,446,281 shares through the Dangote Industries Limited.   Dangote’s 8.77 billion shares were valued to be worth N106,184,049,669.5 (N106.84 billion) at a share price of N12.1 on February 29. 

Twelve weeks later, with the stock price up to N12.45 per unit, the worth of the same shares had increased to N109,255,489,122.75.  This gain of about N3 billion was recorded during the pandemic period, and on surface value, it can be attributed to the food products which the company produces. People eat even during a crisis. 

Adding up the figures with that of Dangote cement, one can see that the little gain of N3 billion cannot be compared to the loss of N581 billion, as the mogul still lost over half a trillion. 

We have not made any calculations for NASCON, as there is no way to confirm the stocks Aliko Dangote has with the company since he is not listed on the board.

However, NASCON shares closed at N13 on February 29, and slid down to N10.05 on April 30, dropping by 23%.

Coronation ads

Tony Elumelu  

Entrepreneur billionaire and Chairman of United Bank for Africa Plc, Tony Elumelu also had some losses during the two months in review.

TOE, as he is called, directly owns a total of 190,100,234 units of shares in the bank, and 2,114,110,884 units of indirect shareholding in the company. This brings his total shareholding to 2,304,211,118 units of shares. By the close of trading on February 29, UBA’s shares were worth N6.7, meaning Elumelu’s total stocks in the bank was worth N15,438,214,490.6 (N15.43 billion).

app

There was not much movement in the share values for UBA plc as it started N6.7 on February 29 and ended April at N6.05. This means that by April 30, Elumelu shares (multiplied by the share price of N6.05 per unit) were worth N13,940,477,263.9 (N13.94 billion), showing a loss of N1,497,737,226.7 (N1.49 billion). This loss was a 9.7% depreciation of his share value, but N1.49 billion was no small loss for TOE.

READ MORE: Asteroids hit hard on Nigerian top stocks, investors lose N161billion


Jim Ovia

The founder of Zenith Bank, Jim Ovia is one of Nigeria’s top billionaires. He directly owns 3,546,199,395 units and indirectly owns 1,513,137,010 units of shares. With over 5 billion units of direct and indirect shareholding in the bank, he is the biggest shareholder. Zenith Bank’s shares closed at N18.5 on February 29, danced a little way up and a little way down, before sliding continuously to close at N14.3 as at April 30.

As at February ending, Ovia’s total 5,059,336,405 units of shares were worth N93.59 billion (N93,597,723,492 at the share price of N18.5 per unit. By April 30, following the crash in prices, the worth of the same shares had dropped to N72,348,510,591.5 (N72.35 billion). Subtracting the latter value from the first, one can see that the worth of Jim Ovia’s stocks dropped by a whopping N21.2 billion (N21,249,212,901).

Among all the billionaires, Jim Ovia suffered the greatest percentage loss in the worth of his assets, 22.7%.

A heart-rending drop for him!

[READ FURTHER: Meet Elochukwu Umeh, founder of Africa’s digital powerhouse)


Herbert Wigwe  

Access Bank’s Group CEO, Herbert Wigwe had a total shareholding of 1,441,522,910 units as at December 2019, before selling off a total of 55,611,001 indirect shares in four transactions, all in January 2020.

The depletion of his indirect holding through Trust and Capital Limited left him with 1,385,902,910 total shares made up of 1,184,680,195.5 units indirect holding and 201 million (201,231,713) direct shares. ‬

Share prices of Access bank closed at N8,2 on February 29 and dropped to N6.6 on April 30. His 1.39 billion shares were worth N 11,364,477,653.80 on February 29, and crashed by 19% to become N 9,147,018,599.40 on April 30.

Wigwe is N2.22 billion poorer because of the COVID-19 induced stock crisis.


Alhaji Abdulsamad Rabiu

According to the Cement Company of Northern Nigeria Plc (CCNN) 2018 financials, Abdulsamad Rabiu had 12,752,801,231 units of shares. However, CCNN has since then been merged with the Obu Cement to give birth to BUA Cement. Since the merger, the new entity BUA cement has not released any financial statement so there was no way to confirm what Rabiu’s stakes are in the company presently.

However, BUA cement had its stock close at N37.15 at the end of February 29, 2020. This value dropped by 12.25% over the weeks to hit N32.6 by 30 April.

By implication, whatever the number of shares the billionaire had with the company, the value has dropped by over 12% in the COVID-19 dominated weeks.

Note that the stocks started the year at N18.10, meaning that the billionaire has lost even much more than we have captured.

READ MORE: Reasons Nigerian Breweries was moved to medium price segment


Austin Avuru 

Having dispensed of a few shares in 2019, co-founder of Seplat Austin Avuru ended the year with 58,970,463 indirect shares in the oil and gas company.

Avuru’s shares, when multiplied by the share price of N605 gives a naira value of N 35,677,130,115 as of February 29.

Taking it two months forward, a stock price of N494.4 as at April 30 shows that the value had depleted to N29,154,996,907.20

Avuru lost about N6.5 billion (N 6,522,133,207.80) to the stock price decline.

[READ ALSO: Top 10 CEOs and how they spent 10 days in lockdown)


Mike Adenuga

Mike Adenuga is the Chairman of Conoil Nigeria Plc, and directly owns 516,298,603 units of shares. He also has 103,259,720 units of indirect shares through Conpetro Limited, making for about 74.4% of Conoil’s issued share capital.

Conoil’s stock prices started at N18 per unit and only dropped a little to close at N17.4 on April 30.

Multiplying Adenuga’s 103,259,720 indirect shares by the stock price of N18 gives us a naira value of N1.86 billion (N 1,858,674,960) as at February ending, but the slight decline in stock value reduced the worth of these shares to N1.79 billion (N1,796,719,128).

Adenuga lost N61.9 million (N61,955,832) in his indirect shares to the COVID-19 crisis.

The 516,298,603 direct shares fell from N9.29 billion (N9,293,374,854) to N8.9 billion (N8,983,595,692.2) by end of April—a difference of N309 million.

From these figures, we can see that Adenuga’s had a loss of N371 million (N371,734,993) within the period under review.


Table of losses

Billionaire Losses (N’billions)
Aliko Dangote                    581.0
Tony Elumelu                        1.5
Jim Ovia                      21.2
Herbert Wigwe                        2.2
Austin Avuru                        6.5
Mike Adenuga                        0.3

Understanding the trend

A lot of factors affect the stability or otherwise of a company’s stock price and one of them is the volume of shares being traded.

A Council member, Nigerian Stock Exchange, Adebayo Ajayi, explained that the more shares owned by an individual investor, the fewer number of shares being traded and the more stable the price can be.

Investors often rush to sell when they sense uncertainty in the market. This results in a larger volume of shares being traded and directly impacts share values.

According to Ajayi, the stocks in Dangote group of companies, for instance, float more as the billionaire has gradually let in more investors over the years.

Note: The stock figures used in the analysis above was sourced from the Nigerian Stock Exchange (NSE) website, using the most recent figures from the companies’ financials.

Ruth Okwumbu has a MSc. and BSc. in Mass Communication from the University of Nigeria, Nsukka, and Delta state university respectively. Prior to her role as analyst at Nairametrics, she had a progressive six year writing career. As a Business Analyst with Narametrics, she focuses on profiles of top business executives, founders, startups and the drama surrounding their successes and challenges. You may contact her via [email protected]

1 Comment

1 Comment

  1. Femi

    May 5, 2020 at 9:27 am

    Let my apologize in advance for my rather long comment, that is what you get when we have a a lot of time….

    Those are all paper losses which don’t mean a lot to these billionaires who are rarely selling their stocks to finance their lifestyle except ofcourse their egos especially when such assets are valued in USD to determine their ranking in the privileged billionaire list. Leave it long enough and those stocks will climb up again and surpass their original values. However, the real losses for these billionaires is in the value of the naira which continues to depreciate following the CBN’s devaluation last month. These billionaires like many wealthy people have lost significant dollar values of their assets (still paper value) but more importantly a lower purchasing power of their income and realized capital gains in the international market. For instance if they were to pay for items abroad or imported items they will have to come up with more naira now than in February therein lies the loss for them and much more for the middle class who were merely getting by before the pandemic. Cost of imported food items, household appliances, school fees and living expenses for any child abroad, automobiles etc would have all risen significantly due to the lost value of the naira. We should pursue a strong make in Nigeria agenda using heavy tariffs to discourage importation and lessening tax burdens on local manufacturers. This will perform two goals lessen the impact of currency devaluation on Nigerians and secondly, ensure there is less need for fx to buy foreign goods and services therefore preserving the value of the naira. Until then…..

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Billionaire Watch

Many Billionaires became richer by 27% during the COVID-19 pandemic – Swiss Bank UBS

The world’s richest saw their wealth climb 27.5% to $10.2trn (£7.9trn) from April to July this year.

Published

on

Many Billionaires became richer by 27% during the COVID-19 pandemic - Swiss Bank UBS

Many billionaires have seen their fortunes hit record highs during the pandemic, with top executives from technology and industry earning the most.

According to reports from Swiss bank UBS, the world’s richest saw their wealth climb 27.5% to $10.2trn (£7.9trn) from April to July this year.

This is up from the previous peak of $8.9trn at the end of 2017, and largely due to rising global share prices.

READ: Only 9% of Nigerian households obtained loans from banks and microfinance institutions since March – NBS

It also said the number of billionaires had hit a new high of 2,189, up from 2,158 in 2017. It comes as the recent World Bank report showed that acute poverty is set to rise this year for the first time in more than two decades due to the pandemic.

GTBank 728 x 90

Among the billionaires, the biggest winners this year have been industrialists, whose wealth rose by a staggering 44% in the three months leading to July.

According to Swiss Bank UBS, “Industrials benefited disproportionately as market price increased in a significant economic recovery [after lockdowns around the world].”

READ: NNPC releases audited financial statements, refineries record losses of N154 billion

GTBank 728 x 90

Other lucky beneficiaries of the pandemic are the Tech billionaires, as their wealth soared by 41%, largely due to the corona-induced demand for their goods and services and social distancing, which accelerated and created the impetus for digital businesses; thereby, compressing several years’ of evolution into a few months.

Healthcare billionaires also benefited as the crisis put drug makers and medical device companies in the spotlight.

READ: Wealth of world’s billionaires hits $10.2 trillion

Amazon boss Jeff Bezos and Tesla founder Elon Musk – both multi-billionaires – saw their wealth hit new highs this summer, thanks to growth in the price of their companies’ stock.

According to UBS, in the last 11 years, China’s billionaires have increased their wealth by the biggest percentage, climbing 1,146% between 2009 and 2020.

Jaiz bank ads

READ: Senate investigates Nigerian banks over ATM, SMS, and maintenance charges

Fidelity ads

By comparison, over the same period, the wealth of British billionaires has risen by just 168%. But the biggest accumulation of wealth remains in the US, where American billionaires have $3.5trn, compared to China’s $1.7trn.

The UK’s wealthy billionaires have just $205bn, compared to Germany’s $595bn and France’s $443bn.

 READ: Bitcoin Mining just got harder, as mining difficulty reaches an all-time high

Donations

According to UBS, many billionaires benevolently donated some of their wealth to help with the fight against COVID-19,

“Our research has identified 209 billionaires who have publicly committed a total equivalent to $7.2bn from March to June 2020.

“They have reacted quickly, in a way that’s akin to disaster relief, providing unrestricted grants to allow grantees to decide how best to use funds.”

Coronation ads

READ: Buhari earmarks N420 billion for N-Power, GEEP and others under NSIP in 2021 budget

The UBS report also revealed that the UK billionaires donated less than those from other countries.

app

In the US, 98 billionaires donated $4.5bn; in China, 12 billionaires gave $679m; and in Australia, just 2 billionaires donated $324m. But in the UK, 9 billionaires donated just $298m.

Continue Reading

Billionaire Watch

Wealth of world’s billionaires hits $10.2 trillion

The total billionaire wealth globally has climbed by 27.5%, reaching $10.2 trillion, up from $8.0 trillion at the beginning of April. 

Published

on

Wealth of world’s billionaires hits $10.2 trillion

As market turbulence continues to propel the wealthiest amongst us; the world’s billionaires have seen their wealth surge to a peak of $10.2 trillion in July, a 14.61% increase from the $8.9 trillion at the end of 2017. 

This was uncovered in the 2020 Billionaires report tagged the “Riding Storm” which was published today, by the Swiss bank UBS and the accounting firm PwC. 

The report found out that the COVID-19 pandemic turbocharged the global economy’s transition to digital, and this has benefited today’s billionaires, as the pipeline of fresh technologies grows by the day. 

READ: Elon Musk now the third-richest person in the world

The COVID-19 crisis indeed has been the real border between the old and the new economy, as it has spurred increased opportunities for the innovators and the disruptors who dominate the Technology, Health, Industrials, and Entertainment & Media.

GTBank 728 x 90

However, the net wealth of traditional billionaires in the intermediate industries and sectors, such as entertainment, financial services, materials, and real estate sectors lagged the rest of the universe. While the wealth of those in older industries suffers. 

READ: World billionaires’ wealth drop by $388 billion in 2018

With the number of billionaires declining by 43 to 2,058, the total billionaire wealth globally has climbed by 27.5%, reaching $10.2 trillion, up from $8.0 trillion at the beginning of April, and higher than the previous peak of $8.9 trillion at the end of 2017. The number of billionaires has increased from 2,158 in 2017 to 2,189. 

GTBank 728 x 90

During 2018, 2019, and the first seven months of 2020, the Billionaire class as a whole saw their wealth increase by 19.1%. This clearly signals the polarization taking place, and the rising wealth divergence between billionaires across industries. 

READ: MTN Nigeria records gain, investors profit up by N42 billion

Technology billionaires’ total wealth rose by 42.5% to $1.8 trillion, supported by the surge in tech shares. The net worth among those in entertainment, materials, real estate, and finance, lagged the rest of the universe with increases of 10% or less. 

However, healthcare billionaires’ total wealth increased by 50.3% to $658.6 billion, boosted by a new age of drug discovery and innovations in diagnostics and medical technology, as well as COVID-19 treatments and equipment. 

READ: 5 habits of Nigeria’s business billionaires you should emulate

Jaiz bank ads

Fidelity ads

Geographically, Mainland China benefited most, as billionaire wealth grew fastest in Asia. As of early April 2020, there were 389 Chinese billionaires, worth a total of $1.2 trillion. Their wealth had grown by almost nine times, compared with twice in the US.

The report also revealed that US billionaires collectively controlled $3.6 trillion of the $10.2 trillion global wealth. Billionaires in Mainland China accounted for $1.7 trillion, while Germany and Russia accounted for $594.9 billion and $467.6 billion of the total billionaire wealth respectively. 

The report also spiked concerns on the issues of the growing wealth gap and rising inequality in the world, as the majority at the end of the scale has seen their wealth decline owing to the disruption by the global pandemic. The research arm of the United Nations has warned that global poverty could increase this year for the first time since 1990, reversing a decade of progress. 

However, it was suggested in the report that higher productivity is needed to address the huge public financial deficits while taking care to reduce social inequality and to tackle the environmental resource scarcity by doing more with less.

Continue Reading

Billionaire Watch

Elon Musk now the third-richest person in the world

Musk has seen a meteoric rise in his wealth, with his net worth growing by $87.8 billion this year.

Published

on

Elon Musk, Tesla, SEC, Stock, Twitter, COVID-19: Tesla’s Elon Musk to produce ventilators as fast-spread of disease lingers

The recent surge in many leading U.S technology stocks have unsurprisingly created wealth for their founders, investors and stock traders.

What we know: Elon Musk just surpassed the co-founder of Facebook, Mark Zuckerberg to become the third richest person in the world. Shares of Tesla Inc. continued its unrelenting surge after the recent stock split of Tesla stocks. Musk is now estimated to be worth about $115.4 billion, according to the Bloomberg Billionaires Index.

Musk is the present chief executive officer of Tesla, a maker of electric vehicles.

The Palo Alto, California-based company sells sedans, sport utility vehicles, and is the state’s largest automotive employer. He’s also CEO of Space Exploration Technologies, a rocket manufacturer tapped by NASA to resupply the space station.

Musk, 49, has seen a meteoric rise in his wealth, with his net worth growing by $87.8 billion this year as Tesla shares surged almost 500%.

GTBank 728 x 90

Also helpful: an audacious pay package – the largest corporate pay deal ever struck between a chief executive officer and a board of directors – that could yield him more than $50 billion if all goals are met.

On Monday, Nairametrics reported how Tesla’s share price rose to almost $500 following a 5-for-1 split. Nearly 70 million shares had changed hands as at then, two-thirds of the daily average over the past year.

Tesla’s $464 billion market value now exceeds that of retail behemoth Walmart Inc., the largest company in the U.S. by revenue.

GTBank 728 x 90

Recall Nairametrics, about two weeks ago highlighted major reasons why Nairametrics believed the stock was a strong buy and could surpass the present most valuable listed technology company.

Tesla was founded in 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to drive electric – that electric vehicles can be better, quicker, and more fun to drive than gasoline cars.

Today, Tesla builds not only all-electric vehicles but also infinitely scalable clean energy generation and storage products. Tesla believes the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better.

Continue Reading
Advertisement
Advertisement
Advertisement
ikeja electric
Advertisement
Advertisement
Patricia
Advertisement
FCMB ads
Advertisement
IZIKJON
Advertisement
Fidelity ads
Advertisement
first bank
Advertisement
bitad
Advertisement
Stallion ads
Advertisement
financial calculator
Advertisement
deals book
Advertisement
app
Advertisement