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TOTAL, GTBank lead Nigerian Stocks up, investors gain a whopping N350 billion W/W

Fifteen (15) equities depreciated in price, lower than twenty-eight (28) equities in the previous week.

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The Nigerian stock market opened for four trading days this week as the Federal Government of Nigeria declared Thursday 1st October 2020 a Public Holiday.

The All-Share Index appreciated by 2.53% while Market Capitalization appreciated by 2.55% to close the week at 26,985.77 and N14.105 trillion respectively.

READ: Chevron to sack 25% of its workforce in Nigeria

  • Investors gained a whopping N350.12bn.
  • A total turnover of 1.532 billion shares worth N16.901 billion in 17,882 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 1.567 billion shares valued atN20.559 billion that exchanged hands last week in 18,396 deals.
  • The Financial Services industry (measured by volume) led the activity chart with 1.292 billion shares valued at N10.562 billion traded in 10,046 deals; thus contributing 84.29% and 62.49% to the total equity turnover volume and value respectively.
  • The Conglomerates Industry followed with 62.395 million shares worth N89.205 million in 453 deals. The third place was the Industrial Goods industry, with a turnover of 55.168 million shares worth N2.976 billion in 1,752 deals.
  • Trading in the top three equities namely Zenith Bank Plc, Sterling Bank Plc and United Bank for Africa Plc. (measured by volume) accounted for 815.646 million shares worth N7.311 billion in 4,461 deals, contributing 53.22% and 43.26% to the total equity turnover volume and value respectively.
  • Thirty-six (36) equities appreciated in price during the week, higher than thirty-five (35) equities in the previous week.

READ: Is Zenith Bank thriving on the strength of sound financial indices?

Fifteen (15) equities depreciated in price, lower than twenty-eight (28) equities in the previous week, while one hundred and twelve (112) equities remained unchanged, higher than one hundred (100) equities recorded in the previous week.

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Top gainers

  • TOTAL NIGERIA PLC. up 21.00% to close N96.80
  • OANDO PLC up 12.81% to close N2.29
  • STERLING BANK PLC. up 10.34% to close N1.28
  • CHAMPION BREW. PLC. up 9.88% to close N0.89
  • IKEJA HOTEL PLC up 9.78% to close N1.01
  • AIICO INSURANCE PLC. up 9.72% to close N0.79
  • ETERNA PLC. up 9.60% to close N2.74
  • CONSOLIDATED HALLMARK INSURANCE PLC up 8.82% to close N0.37
  • INTERNATIONAL BREWERIES PLC. up 8.33% to close N3.90
  • GUARANTY TRUST BANK PLC. up 7.41% to close N29.00

READ: Why banking stocks remain investors’ delight

Top losers

  • CORNERSTONE INSURANCE PLC down 15.49% to close N0.60
  • UNIVERSITY PRESS PLC. down 12.68% to close N1.24
  • E-TRANZACT INTERNATIONAL PLC down 9.96% to close N2.35
  • UACN PROPERTY DEVELOPMENT COMPANY PLC down 8.00% to close N0.92
  • NIGERIAN BREW. PLC. down 6.76% to close N49.00
  • LIVESTOCK FEEDS PLC.down 6.67% to close N0.56
  • LEARN AFRICA PLC down 6.14% to close N1.07
  • TRANS-NATIONWIDE EXPRESS PLC. down 6.10% to close N0.77
  • P Z CUSSONS NIGERIA PLC. down 5.88% to close N4.00
  • MAY & BAKER NIGERIA PLC. down 5.54% to close N2.90

Outlook

  • Nigerian bourse traded positive throughout the past week amid high sell-offs in global stocks as the most powerful political leader tested positive to the COVID-19 virus.
  • Significant buying pressures were noticed around blue-chip stocks like Total, MTN Nigeria, GTBank, and Dangote cement railed the Nigerian bourse to an all-perfect, bullish trading run.
  • The odds seem to be with the Nigerian Stock Market as a recent report showed Fitch Ratings have revised the Outlook on Nigeria’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Negative and affirmed the IDR at ‘B’.
  • The report also projected Brent oil prices to average USD41/barrel in 2020, USD45/barrel in 2021, and USD50/barrel in 2022.
  • In addition, the report expects Nigeria’s oil production volume to average 1.93mbpd in 2020, 1.87mbpd in 2021, and 2mbpd in 2022, all things being equal.
  • Nairametrics however envisages cautious buying, as market indicators tilt towards an overbought bias.

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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

Why Microsoft shares dropped 2% amid rising earnings

Microsoft shares dropped about 2% after the tech juggernaut gave unimpressive revenue guidance.

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China will not accept any Microsoft-TikTok deal, Microsoft acquires CyberX to beef cybersecurity , Microsoft outlook users experience Software Blackout.

The world’s software giant, Microsoft saw its shares drop about 1.66% of its value, immediately after the tech juggernaut gave unimpressive revenue guidance. That said, Microsoft printed impressive first-quarter earnings which exceeded estimates.

READ: Software bug brings down Microsoft Teams, Azure

READ: MainOne’s subsidiary set to launch local version of Microsoft Stack Cloud

What you should know

  • Microsoft’s stock price is falling on bearish comments coming from the company after it released impressive earning results,  stating that its revenue guidance was weak and further hinted that it continued to face pressure from lower one-off sales of software due to the COVID-19 pandemic.
  • Microsoft also revealed that operating profit margins were more likely to be affected in H1 2020 year. It increased its investments in its present cash cow business (cloud computing) while seeing a deep drop off in high-margin sales on its Windows operating system for Personal computers.
  • It’s also important to note that the stock bears are hitting hard on the trillion-dollar market capitalized company on the bias that Microsoft further disclosed that for the final three months of 2020, its expected revenue would range between $39.6billion to $40.4billion; or a growth of 8% at the midpoint of the range, compared to global market forecasts of $40.4billion.

READ: Software bug brings down Microsoft Teams, Azure

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Here are some highlights of its most recent earnings;

  • Revenue was $37.2 billion and increased by 12%.
  • Operating income was $15.9 billion and increased by 25%.
  • Net income was $13.9 billion and increased by 30%.
  • Diluted earnings per share were $1.82 and increased by 32%.

READ: PZ incurs N1 billion in exchange rate loss 

Revenue in Productivity and Business Processes was $12.3 billion and increased 11%, with the following business highlights:

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  • Office Commercial products and cloud services revenue increased 9%, driven by Office 365 Commercial revenue growth of 21% (up 20% in constant currency).
  • Office Consumer products and cloud services revenue increased by 13% and Microsoft 365 Consumer subscribers increased to 45.3 million.
  • LinkedIn revenue increased by 16%.
  • Dynamics products and cloud services revenue increased 19% (up 18% in constant currency), driven by Dynamics 365 revenue growth of 38% (up 37% in constant currency).

READ: Airtel Africa’s profit up 12.9%, customer base reaches 111.5 million

What they are saying

However, in its recent earnings call, Microsoft CEO, Satya Nadella, gave valuable insights into why Microsoft is heading in the right direction, with significant investments in its cloud businesses.

The next decade of economic performance for every business will be defined by the speed of their digital transformation.

“We are innovating across our full modern tech stack to help our customers in every industry improve time to value, increase agility, and reduce costs.”

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READ: Nigerian Banks expected to write off 12% of its loans in 2020 

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The C.F.O of Microsoft also buttressed the leading software maker’s long term investment.

“Demand for our cloud offerings drove a strong start to the fiscal year with our commercial cloud revenue-generating $15.2 billion, up 31% year over year.

“We continue to invest against the significant opportunity ahead of us to drive long-term growth,” said Amy Hood, Executive Vice President and Chief Financial Officer of Microsoft.

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Cryptocurrency

Why U.S biggest Bank, JP Morgan Chase is bullish on Bitcoin

America’s JPMorgan Chase has given valuable insights on why it believes the odds are with Bitcoin.

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JPMorgan Chase signs deal with Envestnet Yodlee , JPMorgan

America’s biggest bank, JP Morgan Chase, recently released a rare statement on the world’s flagship crypto, where it said that Bitcoin has what it takes to challenge gold’s status as the go-to alternative financial asset.

When compared to other financial assets like gold and crude oil, Bitcoin looks relatively small, considering that it has a market capitalization of $242 billion, compared to the precious metal’s (Gold) $2.6 trillion market value. However, this means the crypto has more room for upside and can potentially compete with gold as the preferred alternative currency.

READ: JP Morgan responds to FG’s Malabu court case

In a report credited to Business Insider, America’s most valuable bank, JPMorgan Chase, gave valuable insights on why it believes the odds are with Bitcoin to keep rising in value.

“Even a modest crowding out of gold as an ‘alternative’ currency over the longer term would imply doubling or tripling of the bitcoin price,” JPMorgan Chase said.

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READ: Large entity moves Bitcoins valued $244 million

And over time, Bitcoin could be held for other reasons such as for making payments, not just for being a store of wealth as gold is, according to JPMorgan Chase.

“Cryptocurrencies derive value not only because they serve as stores of wealth but also due to their utility as a means of payment. The more economic agents accept cryptocurrencies as a means of payment in the future, the higher their utility and value,” JPMorgan Chase explained.

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READ: Gold prices settle lower, amid President Trump’s COVID-19 infection

What you should know

It’s important to note that such a bullish call by an American elite bank is coming on macros that BTC has a circulating supply of 19 million coins and a max supply of 21 million coins, meaning there are about 2 million left to be mined.

READ: JPM coin: What it is and what it means for Cryptocurrency

  • Taking into account that about 4 million Bitcoins have been lost forever as a result of BTCs’ owners dying, and their next of kin not having access to such cryptos, it is fair to say there are only about 15 million BTC presently in circulation to cater for over 7 billion people fighting to have a stake in Bitcoins. This means that as BTC becomes scarce and more popular, it is only a matter of time before crypto asset valuation will hit the roof.
  • As the general economic law states, when demand is high and supply is limited, prices of such products usually go up.
  • Another strong fundamental increasing the odds on the world’s most popular crypto is that it’s almost impossible to forge, and has strong durability characteristics.
  • Thanks to its complexly designed decentralized blockchain network, it will take you more than a supercomputer to make such an attempt. Also, you have to confuse all players in the blockchain network, in accepting such forged digital coin.

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Market Views

Biggest IPO: World’s biggest Fintech plans to raise $34 billion 

Ant Group has begun the process of a concurrent initial public offering in what could mark one of the biggest IPOs of 2020.

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Biggest IPO: World's biggest Fintech plans to raise $34 billion 

The world’s payment juggernaut, Ant Group, is hoping to raise $34.5 billion in its dual initial public offering (IPO) after setting the price for its shares today, making it the biggest listing of all in modern history, in a report credited to CNBC news.

The Chinese financial powerhouse had earlier disclosed previously that it would divide its stock issuance equally across Chinese major stock exchanges, which include Shanghai and Hong Kong, issuing 1.67 billion new shares at each of those exchanges.

READ: Square buys $50 million worth of Bitcoins

READ: Airtel announces share price today as pre-IPO interest hits $200 million

READ: This report explains why Nigerians are bent on leaving the country

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Ant Group’s Shanghai-listed shares will be quoted at 68.8 yuan each. The issuing of 1.67 billion shares would raise 114.94 billion yuan or $17.23 billion.

  • The Hong Kong-listed shares have been priced at 80 Hong Kong dollars each, raising 133.65 billion Hong Kong dollars or $17.24 billion.
  • The listing would produce a return of at least $34.5 billion, as the figure could go higher if the so-called over-allotment option is exercised, depending on demand.
  • It would make it the largest initial public offer of recent memory, putting it ahead of previous record-holder Saudi Aramco, which raised about $29 billion.

READ: MTN may rake in $600 million from Jumia’s planned listing

READ: Jack Ma’s fintech firm is set for IPO, signalling prospects for Nigerian fintechs

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READ: Gold futures drops to $1727.80 as America, China tension deepens

What you should know

Ant Group, formerly known as Ant Financial and Alipay, is an affiliate company of the popularly known e-commerce company Alibaba.

  • Ant Group remains the world’s most valuable FinTech company, and most valuable unicorn company, with a target valuation of over US$280 billion.
  • The group owns China’s largest digital payment platform, Alipay, which serves over one billion users and 80 million merchants, with total payment volume (TPV) transaction reaching RMB118 trillion in June 2020.

Explore Data on the Nairametrics Research Website

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