The Nigerian Stock Exchange started the first trading week on a slightly bearish note. The All Share Index dropped by 0.06% to close at 25,027.61 basis points, as against +0.45% gain recorded previously.
Its Year-to-Date (YTD) returns currently stands at -6.76%. Also, the Nigerian bourse’ market capitalization presently stands at N13.056 trillion.
The activity levels were mixed such that while the total volume of shares traded in 4,294 deals improved by 5.02% to 175.32 million units, the total value fell by -28.93% to N1.43 billion. FBNH was the most traded by volume at 22.93 million units as GUARANTY topped by value at N344.27 billion.
Meanwhile, the market breadth index was broadly positive with 18 gainers as against 11 losers. CORNERST (+9.09%) led the gainer’s chart today, while CHAMPION (-9.47%) topped the losers.
The top gainers
- UNILEVER up 7.14% to close at N12
- UCAP 6.93% to close at N3.24
- GUINNESS up 6.38% to close at N15
- CAP up 2.94% to close at N17.5
- WAPCO up 2.13% to close at N12
The top losers
- UACN down 4.84% to close at N5.9
- ETI down 4.71% to close at N4.05
- UBA down 1.53% to close at N6.45
- BUACEMENT down 1.39% to close at N38.95
- ZENITHBANK down 0.59% to close at N16.8
Outlook for the coming days
The NSE ended Monday’s trading session on a slightly bearish note, as the Federal Government lifted the ban on interstate travels coupled with the resumption of local flights. These have helped in boosting economic activities around major economic hubs in Nigeria.
However, Nairametrics envisages cautious buying on that basis of prevailing low market liquidity and the recent plunge in Nigeria’s external reserve below the $36 billion levels.
MTN Nigeria, Zenith Bank post gains, as investors gain N54.42 billion
Nigerian Stock Exchange trading turnover was also positive as volume climbed up by 22.64%.
Nigeria bourse recorded bullish gains at Tuesday’s trading session.
The All Share Index gained by 0.39% to close at 26,611.96 basis points as against the 0.72% gain recorded on Monday.
Its Year-to-Date (YTD) returns currently stands at -0.86%. Nigerian Stock Exchange market capitalization presently stands at N13.907 Billion. Investors gained N54.42 Billion.
- Nigerian Stock Exchange trading turnover was also positive as volume climbed up by 22.64% as against +0.32% uptick recorded on Monday. ZENITH BANK, STERLNBANK, and UBA were the most active to boost market turnover.
- ETRANZACT leads the list of active stocks that recorded an impressive volume spike at the end of today’s session.
- Market breadth closed positive as WEMABANK led 16 Gainers as against 11 Losers topped by ETRANZACT at the end of today’s session – an unimproved performance when compared with the previous outlook.
- BUACEMENT up 3.34% to close at N41.75
- DANGSUGAR up 1.63% to close at N12.5
- ZENITHBANK up 1.16% to close at N17.5
- MTN up 0.79% to close at N127.5
- SEPLAT up 0.50% to close at N400
- ETRANZACT down 9.96% to close at N2.35
- WAPCO down 6.25% to close at N15
- LEARNAFRCA down 6.14% to close at N1.07
- FBNH down2.80% to close at N5.2
- ARDOVA down 0.90% to close at N11
Nigerian bourse continued its impressive upward run amid recent death toll globally reaching a million and significant selling pressures in Nigeria’s major export product (Crude Oil).
- Notably, NSE30 Stocks like MTN Nigeria and BUA cement in the past couple of days have experienced a decent amount of buying pressures.
- Amidst the prevailing bullish run, Nairametrics envisage caution as a recent survey by Nigeria’s Central bank has revealed business organizations were pessimistic about the local economy this month.
- As inflation level is expected to rise at least in the next two quarters and the borrowing rate is expected to rise in September, October, and the next six months.
JAIZ Bank Plc set for private placement
This call is in a bid to get the support of relevant stakeholders in raising additional capital through private placement.
JAIZ Bank Plc, has announced plans for a private placement that will see the injection of fresh capital into the company, and bring in new investors.
This information is contained in a recent call for Extra-Ordinary General Meeting (EGM), to be held on October 28, 2020, in Abuja; made public and signed by the Bank’s Secretary, Mrs. Rukayat Oziama Dahiru. This call is in a bid to get the support of relevant stakeholders in raising additional capital through private placement.
The directors through the meeting, plan to raise an additional N10 billion through private placement and offer for subscription N20 billion ordinary shares of the bank, at the rate of 65 kobo per share to identified investors, all subject to the approval of pre-requisite bodies and regulator
Recall that an earlier article by Nairametrics showed that the bank reported an increase in most of its key indicators for H1, 2020, such as Profit After Tax that rose by 45.3% to N1.1 billion, Gross income which appreciated by 39% to N8 billion, etc.
(READ MORE: Jaiz Bank Plc appoints new directors)
Jaiz Bank Plc is a non-interest bank, operating based on sharia laws in Nigeria. It is the first non-interest bank established in Nigeria and headquartered in Abuja, the capital city of the country.
Based on its last financials for H1, 2020, JAIZ Bank has estimated total assets worth of N186.6 billion, and currently operates in about 27 branches in Nigeria.
Nigerian Breweries stock up by 58% since August
Despite being affected by the COVID-19 pandemic, Nigerian Breweries share price has increased in value.
The shares of Nigerian Breweries Plc, the largest brewer by market capitalization on NSE, have gained a whopping 58.06% since August, almost two months ago.
This was discovered by comparing the market opening price of the company’s stock on the 3rd of August (N31.00), with the market closing price of the shares after September 28’s trading session, which was N49.00. This is a whopping N18.00 difference or 58.06% increase in the value of Nigerian breweries shares, in 56 days.
However, the increase in the share price of Nigerian Breweries is quite surprising, considering the fact that the earnings of the company were affected by the COVID-19 pandemic.
According to the figures contained in its half-year results, the brewer suffered a 10.8% decline in revenue in the first half of the year, as a result of a material decline in beer volumes, following the restrictions to movements and gatherings directed at limiting the spread of the coronavirus.
The restrictions placed on bars, restaurants, and night clubs impacted the sales of the company, as approximately 64% of beer and alcoholic drink sales come from on-premise demand.
In like manners, pressures from the cost of sales, marketing & distribution expenses, and administrative expenses severely kept the profit of Nigerian Breweries down in H1 2020, this led to a 58.03% decline in profit after tax, when compared with the profits the company reported over the same period last year.
Despite the earnings challenges the company faced in H1 2020, the confidence of Nigerian Breweries’ major shareholder Heineken Brouwerijen B.V (Heineken Breweries), in the long-term fundamentals of Nigerian Breweries, and its relative valuation as of 3rd August, inspired the Dutch brewer to spend N439.2 million, to accumulate 11,697,324 additional units of Nigerian Breweries shares, at an average price of N37.55, in just 39 days.
Heineken Brouwerijen B.V investment of N439.2 million into the company, has led to an unrealized gain of N133.96 million in just 45days.
It is important to note that the purchase of the shares of Nigerian Breweries, by Heineken Brouwerijen and other majority shareholder, has mopped up stray volumes on the bourse, and this could be one of the factors that had pushed the shares of brewer higher.
Shares of Nigerian Breweries at the end of the trading session closed at N49.00, and this is 6.76% lower than the market opening price for the day, 8.09% higher than the market opening price a week ago, and 32.43% higher than the market opening price for the month. While the YTD gains stand at -16.95%.
Relative Strength Index indicates that Nigerian Breweries shares are currently trading in the overbought zone, although approaching the neutral zone, given the 6.76% decline today. While other Momentum Indicators, like the William Percentage Range and the stochastic variant of the Relative Strength Index, indicate that the shares of the company are currently trading in the neutral zone.
Outlook for Q4 and H2 2020
The performance of Nigerian Breweries is subject to seasonal fluctuations, as a result of weather conditions and festivities. The Company’s full-year results and volumes are dependent on the performance in the peak-selling season, especially the festive seasons, and this typically results in higher revenue and profitability in the last quarter of the year.
The impact from this seasonality is also noticeable in several working capital related items, such as inventory, trade receivables and payables, and as such the overall profitability of Nigerian Breweries is expected to be beefed up in Q4 2020.