Stock Market
Japaul Oil & Maritime Services plans to invest in gold mining
The company’s name will be changed from Japaul Oil & Maritime Services to Japaul Gold and Ventures Plc.
Japaul Oil & Maritime Services has announced its plan to change the name of the company to Japaul Gold and Ventures Plc in a bid to delve in mining and technology business activities.
This was disclosed in a notice, which was signed by the Company Secretary, Micheal Edeko, and sent to the Nigerian Stock Exchange (NSE). According to the notice, Japaul intends to seek investors’ consent to raise additional equity capital up to N27 billion whether by way of Right Issue, Public Offer or Private Placement.
It stated, “We intend to seek the approval of our shareholders to increase the authorised share capital from 6 billion to 60 billion ordinary and/or Preference shares and carry out share reconstruction.
“The Directors be, and are hereby authorised to do all things necessary and incidental to the achievement and fulfilment of the above special resolutions including amending the Memorandum and Articles of Association of the company.”
READ ALSO: How to Profit from Directors’ Share Dealing Notifications
According to the notice, the company’s 15th AGM would hold at the Japaul Corporate Head office, Ikeja, Lagos on July 29th, 2020. The consolidated statement of financial position of the company, as of December 31, 2019, would be presented to the shareholders at the virtual meeting.
What it means: If Japaul succeeds in increasing its share capital from 6 billion to 60 billion, it means bad and good news for investors. It could be bad because it represents the issuance of additional shares, which dilute the value of investors’ existing shares.
The good news is that additional share may benefit investors in the form of increased returns on equity, through capital gains, higher dividend payouts.
READ ALSO: Japaul Oil and Maritime’s share price is gaining momentum
Share reconstruction: Share Reconstruction otherwise known as a reverse stock split is a process whereby a company reduces the total number of outstanding shares it has by cancelling out shares it does not need.
How it may affect investors: While some argue that share reconstruction does not affect the value of investors’ shares in a company, others insist that the exercise can turn to a nightmare for shareholders. The market may feel the fundamentals of the company is so weak they do not even apply any sentimental value towards the share reconstruction.
For instance, if Japaul share price changed from 23kobo, as at June 19, 2020, to 46kobo after a scheme of Share Reconstruction, the market may still feel the value the company is worthless and price it less. Therefore the company can drop below 46kobo or lower than the 23kobo it was trading before the reverse split.
READ ALSO: Binance, Bitfinex, Coinbase, Huobi receive about 40% of all BTCs
Meanwhile, the results of the company for the financial year ended in December 2018 showed that revenue fell from N1.9 billion in 2017 to N936 million in 2018. Losses, though lower year on year, remain dire. The firm made a loss after tax of N6.5 billion in 2018, as against a loss after tax of N13.2 billion recorded in 2017.
The company’s auditors, PKF, have flagged the firm’s growing concern assessment as a key audit matter. The group’s shareholder funds have been eroded to the tune of N34.6 billion, as at 31st December 2018. These have culminated from past operating losses in the last four years. Total indebtedness stood at N58.35 billion as at the 31st of December 2018 with a gearing ratio of 169:1.
The share price of Japaul Oil & Maritime Services closed at N0.23 on Friday, June 19, 2020. While its price earning ratio stands at 0.04, the earning per share and price to book ratio stands at 6.53 and 0.2421 respectively.
Cryptocurrency
Coinbase debuts on Nasdaq at around $100 billion valuation
Coinbase resumed trading on the Nasdaq Composite Index today under the ticker “COIN”.
Markets
Jaiz, Wema surge as NSE Banking Index drops
At the end of the trading session today, the NSE banking index dropped by (-0.71%) to settle at 348.20 from 348.28 index points.
At the end of the trading session today, the NSE banking index dropped by (-0.71%) to settle at 348.20 from 348.28 index points. This profit was less than the previous days (+2.19%). The NSE banking index started today’s trading session on a bearish trend. The market saw 3 gains, 3 stalemates, and 4 losses.
Jaiz Bank left the claws of the bears with a profit (+5.00%) settling its price at N0.63 as it eyed the N1 mark. Analysts speculate that this milestone may be surpassed by the end of the year. Wema banks topped the gainers with a significant (+5.26%), putting it on the top 5 list on the NSE-ASI.
Wema Banks share price stood at N0.58 at the end of the trading session.
Zenith Bank was saved from sell-off by posting a profit of (+0.46%) pushing the price to N22.00 from N21.90.
Sterling Bank led the losers as they made a significant loss of (-8.33%) dropping the price to N1.68 from N1.80 held the previous day.
Union Bank also dropped by (-3.06%) dropping the price at N4.75 from the previous close of N4.90.
Fidelity Bank saw a loss of (-0.80%) dropping the price to N2.47 from the previous day’s close of N 2.49. Technical analysis trended bearish from the beginning to the end of the trading session. GTB was not left out of the loss in the NSE Banking Index starting the day at N28.95 to close at N28.80 showing a -0.52% decrease.
UBA posted zero profit to hold the price at N6.95 which was exactly the same price as the previous days close.
Access Bank held another stalemate to hold the price at N8.10. Finally, EcoBank also saw a stalemate putting the market price at N4.80.
Outlook
- Market sentiment still shows major consolidation as NSE Index companies have 3 gains, 3 Stalemates and 4 losses.
- Analysts project recovery from the NSE Banking Index before the end of the week.
- Nairametrics advises cautious participation in the market amid growing uncertainties.
1 Comment