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Stock Market
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.
READ: Brewery sector: A quarter to forget
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.
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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.
READ: GTBank, Access Bank, 11 others pay workers N271.64 billion in H1 2020
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%.
READ: Access, GTBank, two others pay PWC & EY N1.5 billion as Audit fees in H1 2020
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.
READ: How foreign exchange risks and others affect the Nigerian pension industry
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.
Stock Market
Flour Mills Nigeria gain N28 billion on NSE in 10 trading days
Flour mills gained N28 billion on the Nigeria Stock Exchange in just ten trading sessions, as the share price rose by 26.15%.
Stock Market
Access Bank shares gain N44.4 billion in first 10 days of trading
Market capitalization moved from N300.36 billion as at the 4th of January, 2021 to N346.57 billion.
Spotlight Stories
MTN, NB keep Nigerian stocks up, investors gain N112 billion
UACN (+10.00%) led the gainer’s chart today, while ARDOVA (9.84%) was the top loser.
Nigerian bourse extended its positive rally at Friday’s trading session, appreciating further by N112 billion, amid increased buying interest. Specifically, the market capitalization inched higher by 0.52% to close at N21.530 trillion from N21.418 trillion on Thursday.
In the same vein, the All-Share Index garnered 0.52% to close at 41,176.14 compared with 40,963.14 on Thursday.
Consequently, the market breadth remained positive with 42 gainers relative to 12 losers. UACN (+10.00%) led the gainer’s chart today, while ARDOVA (9.84%) was the top loser.
- Also, the total volume of shares transacted improved with an exchange of 666.60 million shares worth N6.39 billion in 6,980 deals.
- JAPAULGOLD was the most traded shares by volume with 115.8million units, while GUARANTY and ACCESS topped by value at N1.27b and N461 respectively.
Top Gainers
- UACN up 10.00% to close at N8.25
- FLOURMILL up 9.33% to close at N32.8
- NB up 3.36% to close at N60
- PRESCO up 2.78% to close at N74
- MTNN up 1.19% to close at N170
Top Losers
- ARDOVA down 9.84% to close at N19.7
- MAYBAKER down 5.71% to close at N3.63
- STERLNBANK down 1.96% to close at N2
- ZENITHBANK down 0.38% to close at N26.3
- UNILEVER down 0.37% to close at N13.45
Outlook
Nigerian Stocks ended the trading session on an impressive note.
- The uptrend was driven by price appreciation in large capitalized stocks among which are; UACN, Flourmill, MTN Nigeria Communications, NB and PRESCO.
- Nairametrics, however, envisages cautious buying as the COVID-19 crisis seems to be getting out of hand in Nigeria’s key international markets that include Western Europe and the United States.
