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Stock Market

NASDAQ down 2%, Tesla loses over 12%

Leading tech stocks like Netflix, Facebook, Amazon, and Google were all down more than 1%.

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U.S Stocks set to surge higher, on hopes of a stimulus package deal

US Stocks plunged at the pre-open of the US trading session on Tuesday as global tech brands came under pressure following their worst sell-off in more than five months last week.

The Nasdaq Composite was down about 2% at the time this report was drafted and the Dow Jones Industrial Average plunged as much 1.7%. The S&P 500 lost about 1.5%.

Tesla dropped a whopping 12.88% after the S&P Dow Jones surprised investors by failing to add the fast-rising Tesla into the S&P 500 after the bell on Friday.

Investors were betting high on Tesla’s inclusion into the S&P 500, hoping for the stamp. The rejection reveals the risks to the overheating trading session currently in play.

Other leading tech stocks like Netflix, Facebook, Amazon, and Google were all down more than 1%. Apple dropped as much as 2%. Zoom Video fell by 2.5%.

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Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment Trading and Financial Market Analysis. Member of the Chartered Financial Analyst Society. You can follow Olumide on Twitter @tokunboadesina or email [email protected]

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Market Views

Zoom is 3 times bigger than Nigeria’s Stock Market Capitalization

Zoom sported a market valuation of $131 billion, compared to the Nigerian Stock market with a value standing at $42.1 billion. 

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The world’s fastest-growing video conferencing service company, Zoom, has seen its market valuation rocket past $130 billion—more than 3 times the value of the Nigerian Stock Exchange.

Zoom has attracted high demand growth for its service, especially since COVID-19 changed the way the world works. As one of the pioneers of modern work-from-home tools, millions of organizations around the world have adopted the application as their preferred communication tool in the workplace, particularly video conferencing.

What we know: At the time of drafting this report, Zoom sported a market valuation of $131 billion, compared to the Nigerian Stock market with a value presently standing at $42.1 billion (N16 trillion), using the official exchange rate of N380 to $1.

  • Zoom’s enviable performance began in early 2020, when it printed a market capitalization of just $19 billion. While Zoom posted $1.35 billion in revenue over the past 12 months, the Nigerian Stocks bourse, in comparison, printed a market capitalization of $39.1 Billion (N14.87 trillion) at the end of January, according to data obtained from Nairalytics (financial data arm of Nairametrics).
  • The bullish run got intensified for the tech company, particularly in Q2 that ended  August 31, when it posted an impressive earning result of $663.5 million in revenue (far beating analysts’ prediction of $500.5 million)—and it still firing on all cylinders.
  • Such gains seen in Zoom’s stock price have added so much wealth to its investors, that Zoom founder, Eric Yuan, has seen his own fortune rise more than 551% year to date, with a valuation put at about $23.2 billion, according to data seen from Bloomberg Billionaire Index.

Eric Yuan is presently the chairman and CEO of Zoom Video Communications, the world’s biggest provider of video conferencing software to the business.

On the other hand, Nigerian stocks also defied expectations and produced positive returns, with every month in the third quarter, printing positive returns as buying pressure increased across the market spectrum. The Nigerian stock market’s performance was triggered by the Industrial Index emerging as the biggest gainer, up by 8.14% followed by the most liquid index, banking index (10.08%), and the Consumer Index printing (2.74%), still market capitalization hovered below $40 billion.

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Zoom has now boosted its revenue forecasts to $690 million for the present quarter (through the end of October), and also increased its financial guidance for the full fiscal year, through Jan 2021, to about $2.4 billion in revenue, up from $623 million for the year through January 2020, as it takes into account the demand for remote work solutions for businesses reaching a record high.

The exponential valuation seen in the world’s biggest video company had been enhanced by the fact that a significant amount of businesses and individuals now work remotely, on the bias of the world’s most disruptive biological pathogen COVID-19’s continued spread, triggering global investors to increase their buying pressure on the American communications technology company, which is barely less 10 years old in operation.

Bottom-line: Covid-19 may have caused a lot of damage to the global economy since it was declared a pandemic in the first quarter of the year, but not for remote working app companies like Zoom, Slack, and Microsoft Teams.

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  • The US stock markets assign significant value to companies that can grow exponentially, as they believe these are companies that will continue to dominate the future of work.
  • Just like US tech stocks, stocks on the Nigerian Stock Exchange have also gained significantly in the latter part of this year.
  • However, rather than gaining from higher revenues growth, they have relied on Meffynomics (lower interest rate in a high inflation economy) to attract portfolio inflows from local investors.

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Company Results

Seplat declares a total interim dividend of $29 million for shareholders

The Interim dividend of US$0.05 per share will be paid on all the outstanding 588,444,561 ordinary shares of the company.

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Seplat Petroleum Development Company Plc, a leading Nigerian independent energy company listed on both the Nigerian Stock Exchange and London Stock Exchange, has announced the payment of a total $29,422,228.05 as interim dividend to shareholders.

This information is contained in its notification dated 30 October, 2020, which was signed by the Company Secretary, Mr. Emeka Onwuka, and sent to the floor of the Nigerian Stock Exchange today.

The notification partly reads:

“Seplat Petroleum Development Company Plc (“Seplat” or the “Company”), a leading Nigerian independent energy company listed on both the Nigerian Stock Exchange and London Stock Exchange, today announces an interim dividend at a rate of US$0.05 (United States Five Cents) per Ordinary Share (subject to appropriate WHT) to be paid to SEPLAT’s shareholders whose names appear in the Register of Members as at the close of business on 13th November 2020.”

What you should know

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  • The Interim dividend of US$0.05 per share will be paid for all the outstanding 588,444,561 ordinary shares of the company owned by the shareholders of the leading energy company, and this gives a total interim dividend of $29,422,228.05, to be distributed to the shareholders of the company.
  • The Interim Dividend of US$0.05 (United States Five Cents) per Ordinary Share of N0.50k each (subject to appropriate withholding tax) will be paid to shareholders whose names appear in the Register of Members as at the close of business on 13th November, 2020.
  • To enable SEPLAT’s Registrar, Datamax Registrars Limited, prepare for the payment of the interim dividend, the Register of Shareholders will be closed on 16th November 2020.
  • On the London Stock Exchange, the Associated Record Date will be 13th November, 2020, and the Ex-Dividend date will be 12th November, 2020.
  • The exchange rate for the naira or pounds sterling amounts payable will be determined by reference to the relevant exchange rates applicable to the US dollar on 12th November, 2020, and will be communicated by the Company on 13th November, 2020.
  • On or around 7th December, 2020, the interim dividend will be paid electronically to shareholders whose names appear on the Register of Members as at 13th November 2020, and who have completed the e-dividend registration and mandated the Registrar to pay their interim dividend directly into their Bank accounts.
  • Shareholders with dividend warrants and share certificates that have remained unclaimed or are yet to be presented for payment or returned for validation are advised to complete the e-dividend registration or contact the Registrar.

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Stock Market

Total, Nestle, lead Nigerian Stocks to record high

Market breadth closed positive as NESTLE led 43 Gainers as against 11 Losers topped by PRESTIGE at the end of today’s session.

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investors, Bulls gain momentum, as stimulus package lifts global financial markets, Bulls boost global financial market, gold hits 7 years high, Dangote, Tier-1 banks lead the bulls to close Nigerian stock market green

Nigerian stocks were blue hot on Friday, as investors momentarily went bullish on most listed stocks. The All Share Index gained 3.71% to close at 30,530.69 points as against +1.58% appreciation recorded on Thursday.

  • Nigerian Stock Exchange capitalization presently stands at about N16 trillion naira.
    Its Year-to-Date (YTD) returns currently stands at +13.74%.
  • That said, Nigerian bourse trading turnover was very impressive at Friday’s trading session as volumed surged by +115.27% as against -2.68% downtick recorded on Thursday.
  • UBA, ACCESS, and FBNH were the most active to boost market turnover. GUARANTY and STANBIC topped the market value list.
  • Market breadth closed positive as NESTLE led 43 Gainers as against 11 Losers topped by PRESTIGE at the end of today’s session – an unimproved performance when compared with the previous outlook.

Top gainers

  1. NESTLE up 10.00% to close at N1421.7
  2. MOBIL up 9.98% to close at N196.1
  3. BUACEMENT up 9.90% to close at N45.5
  4. TOTAL up 9.25% to close at N129.9
  5. DANGCEM up 3.03% to close at N160

Top losers

  1. PRESTIGE down 10.00% to close at N0.54
  2. NAHCO down 5.41% to close at N2.1
  3. GUINNESS down 3.13% to close at N17
  4. PZ down 2.20% to close at N4.45
  5. ETI down 0.88% to close at N5.65

Outlook

Nigerian bourse was fired up at all cylinders amid falling oil prices across the market spectrum.

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  • NSE30 stocks saw high buying pressures as Total and Nestle recorded maximum daily gains on Friday.
  • Nigerian institutional investors seem to be shifting more of their funds to Nigerian Stocks on the prevailing low returns seen in the Nigerian debt market.
  • Nairametrics, however, envisage cautious buying amid growing uncertainty in Nigeria’s key international market, particularly Europe, where about 40% of Nigeria’s major oil earning comes from.

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