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Spotlight Stories

Nigerian stocks on steroids, investors gain N300 billion

Investor sentiment was positive as 36 stocks advanced against 10 decliners.

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The Nigerian Stock market continued its upward trend, as the benchmark All Share Index recorded an impressive 2.11% increase to close at 27,554.49, a three-month high. Investors gained N297.32 billion, as market capitalization rose to N14.402 trillion at the close of trading.

Market turnover improved as volume and value traded increased by 31.38% and 72.66% respectively to 603.9 million and N7.42 billion in 5,984 deals. ZENITH, STERLBANK, and UBA were the most active to boost market turnover, while ZENITH & GUARANTY topped market value list.

  • Investor sentiment as measured by market breadth, was positive as 36 stocks advanced against 10 decliners. GUINNESS (+7.14%) led the gainer’s chart for the day, while OANDO (-8.73%) finished the top loser.
  • Sector performance was bullish as all indices appreciated, led by a striking 3.37% gain in the Banking Index.
  • NSE Banking Index: Recorded an impressive 3.37% gain, on positive sentiments in FIDELITY (+8.33%), FBN (+6.73%), and ZENITH BANK (+5.26%).
  • NSE Insurance Index: UP by 2.04%, on price appreciation in WAPIC (+8.33%), AIICO (+6.33%), and CUSTODIAN (+2.88%)
  • NSE Oil & Gas Index: Increased by 0.84%, on the back of the gains in ARDOVA (+6.36%), and SEPLAT (+2.50%).
  • NSE Industrial Index: Up 0.38%, on WAPCO (+5.61%) upturn.
  • NSE Consumer Goods Index: Gained 0.38%, on buy interest in GUINNESS (7.14%) and DANGSUGAR (+2.33%)

Top gainers

  • GUINNESS up 7.14% to close at N15
  • AIRTELAFRI up 5.32% to close at N400.2
  • MTNN up 3.85% to close at N135
  • PRESCO up 3.77% to close at N55
  • SEPLAT up 2.50% to close at N410

Top losers

  • OANDO down 8.73% to close at N2.09
  • UAC-PROP down 6.52% to close at N0.86
  • UBN down 2.00% to close at N4.9
  • UACN down 0.77% to close at N6.45
  • NB down 0.41% to close at N48.8

Outlook

Nigerian Stocks fired up on all cylinders, amid buying pressures from top NSE30 Stocks like Airtel and MTN Nigeria.

  • Also, local investors caught the bullish trend wagon seen in global equities, on the back of the news that, the world’s most powerful political leader, could be discharged from the hospital later in the day, easing some of the uncertainty that shook global financial markets in the previous session.
  • In addition, Nigerian oil stocks like Seplat gained relatively with Brent crude prices trading above $40/ barrel and U.S. West Texas
  • Intermediate (WTI) is above its critical support level of $38.50/barrel.
  • Nairametrics however envisages cautious buying, as geopolitical uncertainty remained clouded around global financial markets.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Follow Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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Energy

TCN breaks transmission record again in 2021, hits 5,584.40 MW

The TCN has broken its transmission record once again, after hitting a record of 5,584.40 MW.

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FG set to create at least 5 million jobs for youths in the power sector – Minister of Power , Consortium of Western investors to inject upwards of $5 billion in Nigeria's renewable energy sector, Power: Nigeria's deal with Siemens - the birth of a new era?

The Transmission Company of Nigeria has announced it has broken its transmission record once again, after hitting a record of 5,584.40 MW.

This was disclosed by the Minister of Power, Engineer Sale Mamman in a social media statement on Sunday evening.

Sale tweeted, “A New National Transmission Peak and Maximum Daily Energy at 8:15pm on Friday, February 26, 2021.

“5,580.40 MW at 116,891.14 MW per hour.

“Impressive from everyone at the Transmission Company of Nigeria. We will do better for Nigerians.

In case you missed it

  • The Transmission Company of Nigeria (TCN) announced that it hit a peak transmission of 5,459.50MW on the 28th, October 2020.
  • The Transmission Company of Nigeria (TCN) later announced that it hit a peak transmission of 5,552.80 MegaWatts (MW) in January 6, 2021.

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Spotlight Stories

Sell frenzy wipes out N1.1 trillion from market capitalization of Nigerian stocks

Nigerian Stocks end February with N1.1 trillion loss in market value, first loss since September 2020.

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Investors flee Nigerian Stocks as FDI and FPI dips

The Nigerian Stock Exchange ended February with a 6.16% loss ending 7 months winning streak that started in July 2020.

Year-to-date, the Nigerian stock exchange also swung to a loss of -1.17% after closing the month of January with a 5.32% gain. Out of the 166 stocks tracked by Nairametrics 53 stocks posted losses while 35 stocks gained, the rest were flat.

In total, investors lost a whopping N1.1 trillion during the month wiping off all the gains made in January. The last time stocks lost over a trillion naira was in March 2020 when stocks plummeted by about N2.5 trillion due to the global pandemic that had just broken. Before February, stocks have lost N1 trillion and above only 4 times in the last 5 years.

The selloffs also ensued despite the National Bureau of Statistics report that Nigeria had exited a recession beating consensus analyst expectation of a U -shaped recovery.

READ: Bloody February: Dangote, BUA and Lafarge shares lose N622 billion in February

READ: Exchange rate gains at NAFEX as external reserves loses almost $1 billion in less than a month

Why the sell-off?

The sell pressure on Nigerian stocks in the month of February is attributed to a change in key economic drivers that have underpinned the success of stocks in recent months.

  • Overvalued stocks – As stocks hit an all-time high of N22 trillion in market capitalization, investors found it harder to find value in equities. Nigeria boasts of less than 200 stocks on its flagship bourse out of which about 60 have enough liquidity to absorb more capital. For most investors, the key driver for investing in stocks was the dividend yield. However, as market value spiked, the prospects for higher dividend yields fell making investments in equities less attractive.
  • Profit-taking – As investors assigned overvalued status to Nigerian stocks, many saw this as an opportunity for profit-taking. For example, the NSE 30 Index swung from a positive return of 4.93% in January to a loss of 7.41% in February. Pension funds also sold off stocks with their index falling to a loss of 7.68% after closing January with a 7.49% pop. The insurance sector which led the gainers’ chart earlier on in the year went from a gain of 29.77% to a loss of 17.82%
  • Earnings season – The anticipation of how investors might also react to 2020 FY results also played a role in the selloffs that occurred in February. Investors expected a fall in profits for most listed companies. To avoid being in a value trap they sell off and hope to return once the outlook becomes clearer.
  • Rise in interest rates – Lower interest rates have been the major driver of an upsurge in the market value of stocks since last year. The central bank sent clear signals during the months that it was in the mood to increase yields of its OMO and Treasury Bills thus competing directly with dividend yields (which we touched on above). The higher the yield on risk-free investments the less attractive investing in stocks become.
  • Gloomy economic outlook – Lastly, insecurity, social unrest and an ailing economy are also weighing down on investors. Investors are also worried about the economic growth of the country and the ability of the government to continue to operate in a bankrupt state. Nigeria has seen its fiscal deficits explode in recent years. Some of the deficits are funded by an estimated N10 trillion in CBN’s Ways and Means lending.

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Energy

NNPC says it does not plan to increase ex-depot price of petrol

The NNPC has said that it has no plans to increase the ex-depot price of petrol in March 2021.

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Crude oil market remains unpredictable- NNPC Boss

The Nigerian National Petroleum Corporation (NNPC) has said that it has no plans to increase the ex-depot price of Premium Motor Spirit (PMS), otherwise known as petrol, in March 2021.

This was disclosed in a press release by the NNPC and signed by its Group General Manager, Group Public Affairs Division, Dr Kennie Obateru, on Sunday, February 28, 2021.

NNPC, in the statement, warned petroleum products marketers against engaging in arbitrary price increases or hoarding petrol, so as to avoid artificial scarcity and undue hardship for Nigerians.

READ: IPMAN threatens to sell petrol above ex-depot price

The statement from NNPC partly reads, “Contrary to speculations of an imminent increase in the price of Premium Motor Spirit (petrol) in the country, the Nigerian National Petroleum Corporation (NNPC) has ruled out any increment in the ex-depot price of petrol in March 2021.

“The Corporation was not contemplating any raise in the price of petrol in March in order not to jeopardize ongoing engagements with organized labour and other stakeholders on an acceptable framework that will not expose the ordinary Nigerian to any hardship.

“NNPC also cautioned petroleum products, marketers, not to engage in an arbitrary price increase or hoarding of petrol in order not to create artificial scarcity and unnecessary hardship for Nigerians.”

READ: DPR warns against hoarding of petroleum products by depot owners, threatens sanctions

The statement further stated that the corporation had enough stock of petrol to keep the nation well supplied for over 40 days and urged motorists to avoid panic buying.

It also called on relevant regulatory authorities to step up monitoring of the activities of marketers with a view to sanctioning those involved in products hoarding or arbitrary increase of pump price.

READ: NNPC to raise around $1 billion for Port Harcourt refinery revamp

What you should know

  • The ex-depot price is the price at which depot owners sell petroleum products to retail outlet owners and petrol marketers across the country.
  • It is a major determining factor in fixing the retail pump price of petroleum products.
  • Since the increase in the global price of crude oil, there has been a lot of speculation that the retail pump price of petrol would increase to between N190 and N200 per litre as against the present N162 per litre, following the removal of petrol subsidy and the announcement of full deregulation of the downstream sector of the oil industry.

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