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Market Views

Access Bank, First Bank up, investors gain N747 billion W/W

Fifty-three (53) equities appreciated at price during the week, higher than thirty-six (36) equities in the previous week.

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nIGERIAN STOCK EXCHANGE, STOCK MARKET, MARKET CAPITALIZATION

The All-Share Index and Market Capitalization both appreciated by 5.30% to close the week at 28,415.31 and N14.852 trillion respectively. Investors gained 747.19 billion.

Explore Data on the Nairametrics Research Website

  • A total turnover of 3.140 billion shares worth N35.372 billion in 35,099 deals was traded this week by investors on the floor of the Exchange, in contrast with a total of 1.532 billion shares valued at N16.901 billion that exchanged hands last week in 17,882 deals.
  • The Financial Services industry (measured by volume) led the activity chart with 2.325 billion shares valued at N25.816 billion traded in 21,306 deals; thus contributing 74.05% and 72.99% to the total equity turnover volume and value respectively.
  • The Oil and Gas industry followed with 200.567 million shares worth N1.012 billion in 1,977 deals.
  • The third place was the Industrial Goods industry, with a turnover of 149.200 million shares worth N3.631 billion in 2,991 deals.
  • Trading in the top three equities namely Zenith Bank Plc, FBN Holdings Plc, and United Bank for Africa Plc. (measured by volume) accounted for 1.236 billion shares worth N15.724 billion in 9,774 deals, contributing 39.36% and 44.45% to the total equity turnover volume and value respectively.
  • Fifty-three (53) equities appreciated at price during the week, higher than thirty-six (36) equities in the previous week.
  • Fourteen (14) equities depreciated in price, lower than fifteen (15) equities in the previous week, while ninety-six (96) equities remained unchanged, lower than one hundred and twelve (112) recorded in the previous week.

READ: MOBIL, DANGOTE CEMENT record gains, as market liquidity increases by 120%

Top gainers

  • ETERNA PLC. up 32.48% to close at N3.63
  • INTERNATIONAL BREWERIES PLC. up 21.03% to close at N4.72
  • AFRICA PRUDENTIAL PLC up 20.63% to close at N5.73
  • TRANS-NATIONWIDE EXPRESS PLC. up 19.48% to close at N0.92
  • FBN HOLDINGS PLC up 19.23% to close at N6.20
  • ACCESS BANK PLC. up 16.42% to close at N7.80
  • GLAXO SMITHKLINE CONSUMER NIG. PLC. up 16.00% to close at N5.80
  • NASCON ALLIED INDUSTRIES PLC up 15.87% to close at N12.05
  • LINKAGE ASSURANCE PLC up 15.79% to close at N0.44
  • NIG. FLOUR MILLS PLC. up 14.81% to close at N4.65

READ: GUINNESS, NB, SEPLAT, AIRTEL, UNILEVER record impressive gains, investors gain N82.46 billion WoW

Top losers

  • UACN PROPERTY DEVELOPMENT COMPANY PLC down 11.96% to close at N0.81
  • TRIPPLE GEE AND COMPANY PLC. down 10.00% to close at N0.36
  • DEAP CAPITAL MANAGEMENT & TRUST PLC down 10.00% to close at N0.27
  • ACADEMY PRESS PLC. down 6.90% to close at N0.27
  • CONOIL PLC down 5.57% to close at N14.40
  • LAW UNION AND ROCK INS. PLC. down 5.17% to close at N1.10
  • JAIZ BANK PLC down 4.84% to close at N0.59
  • CHAMS PLC down 4.76% to close at N0.20
  • UNION DIAGNOSTIC & CLINICAL SERVICES PLC down 4.00% to close at N0.24
  • OANDO PLC down 2.62% to close at N2.23

READ: GTBANK, UBA, ZENITH BANK record gains, as investors gain N18.2 billion

Outlook

Nigerian bourse recorded impressive gains in the week amid growing political uncertainty across Nigeria’s borders

  • Nigeria’s major export earning asset, crude oil printed higher as Hurricane storm threatened 17% of America’s crude oil supplies, thereby trading at $43/Barrel.
  • Significant buying pressures from Nigeria’s notable stocks rallied investors inflows W/W, as institutional investors took advantage of decent stocks that were trading relatively at a discounted level.
  • On the macro level, Nigeria’s 2021 budget revealed plans to finance the deficit with flows from new borrowings (N4.28 trillion), privatization proceeds (N205.15 billion), and drawdowns from multilateral and bilateral loans secured for specific projects and programs (N709.69 billion).
  • Nairametrics expects you to seek the counsel of a certified Stockbroker when choosing stocks to buy, as Nigerian Stocks often exhibit cyclic returns.

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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. Message Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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Market Views

Economic summary: Crypto, Inflation & SIM Card Policies for the past week

Getting up to an eventful week ahead, these are the things you should know.

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Foreign investors demand for Nigerian stocks increases to N38.98 billion, Nigerians reveal why they pick their favourite banking stocks

Last week was interesting and we tracked some notable events in the economy and markets that would likely have an impact on your money this week.

Economic Indicators

The National Bureau of Statistics released its monthly inflation figures and it is pretty clear that inflation in Nigeria is going only one way — up. Inflation rate stands at 18.17% for the month of March, rising from 17.33% in February. Food inflation currently stands at 22.95%. The macro environment looks particularly gloomy for the average man with rising inflation eroding purchasing power.

READ: Nigeria’s inflation rate rises to 17.33% in February 2021, highest in four years

What we find the most significant is how this will affect investors. With inflation heading towards 20%, it is going to be increasingly difficult for fund managers and investors to earn decent returns on their investments. A few weeks back,  it was stated that the CBN had no real concern with inflation because it was caused by other related factors. We believe it is the right time for the Central Bank to step in by raising interest rates and mopping the excess liquidity in the economy.

The Central Bank last week announced that it was including wheat and sugar on the foreign exchange restriction list. Recall that the CBN had listed 41 items placed on the FX restriction list in 2015, then added maize to the list in 2020.

With existing players like Dangote Sugar, the CBN believes that Nigeria has enough or should have enough capacity to meet local demand.

READ: Biden tax opportunity for Nigeria

Fixed Income

Last week, The Debt Management Office (DMO) announced the offer of N150 billion bonds for subscription by auction in the month of April on behalf of the Federal Government. We reported two weeks ago that bond prices were falling as the yield was rising. As at April, 15th, the S&P FMDQ Nigerian Sovereign Bond Index was -22.07% YTD.

Nigerian investors can still capitalize on decent yields in the bond market. The total subscription received from investors for the bonds was N333.48bn comprising N65.25bn for 16.2884% FGN March 2027 bonds; N110.19bn for 12.5% FGN March 2035 bonds; and N158.04bn for 9.8% FGN July 2045 bonds.

Cryptocurrency and volatility

The cryptocurrency market had a bullish week till yesterday when sell-offs in the market ensured that coins like Ethereum dropped by about 21.46%. Olumide Adesina, a market analyst and cryptocurrency expert, called it a “bloody Sunday.” In a Twitter Spaces conversation with Ugodre Obi-Chukwu on Saturday, he discussed how the market was overheating and the bullish run was unsustainable. Despite the losses yesterday, there is still a lot of upside on cryptocurrencies and many experts remain bullish long-term.

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For whoever is willing to invest in this asset class, the rule of thumb is to only invest money you can part with and do your research.

READ: Cryptocurrency: FG should set up presidential commission on cryptocurrency – ACCI

Other related news:

Stanbic 728 x 90

FG lifts suspension of issuance of new sim cards

The FG lifted its ban on new sim cards for telco players last week. This had previously been halted by the Federal Ministry of Communications and Digital Economy last December. Without a doubt, this is good news for stakeholders in the industry as analysts had predicted that the ban would affect the growth of the sector.

From the government’s perspective, it begs the question,  what was the need to issue a ban on new sim cards in the first place?

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Market Views

SEC ban on foreign stocks denies Nigerian investors of generational wealth

Amid the booming interest in America, the SEC has reminded participants and investors that only authorized securities can be sold to the Nigerian public.

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NYSE, Jumia public listing, MTN IPO, Jumia shares, ADSs

As Americans turn their attention to stock and cryptocurrency markets, trading platforms Robinhood and Coinbase took the top two slots in Apple’s App Store last week.

According to Sensor Tower, Robinhood took the top spot on Friday, followed by crypto trading platform, Coinbase. TikTok came in third place. The surge in popularity coincides with Coinbase’s Nasdaq debut on Wednesday when bitcoin surpassed $64,000 for the first time.

The rise in popularity reflects an increase in retail trading during the pandemic, as well as a “meme stock” community centred on companies like GameStop. After a group of traders on Reddit deployed a short squeeze in January, the video game store became a household name.

READ: Nigerian fintech startup, Blueloop joins Y Combinator’s winter 2021 batch

This isn’t the first time Robinhood has topped the charts. The brokerage firm was the most successful app in the Apple and Google app stores in January, at the height of the GameStop controversy. Another trading app, Webull, came in second. The top ten also included Coinbase, Square’s Cash App, and Fidelity. During the height of the GameStop frenzy, Robinhood, which shut down the buy-side of those stocks, received backlash on social media, and its CEO was later called to testify in front of Congress.

Amid the booming interest in America, the Securities and Exchange Commission of Nigeria (SEC Nigeria) has exercised its legal authority and reminded participants and investors that only authorized securities can be sold to the Nigerian public. To put it another way, international stocks such as Tesla Inc., Apple, Amazon, Google, GameStop and others that are not currently listed in Nigerian jurisdiction should not be sold to Nigerian residents or businesses.

READ: Ripple scores early legal victory, XRP breaks above $1 for first time in 3 years

As a result of the new SEC directive, young Nigerians who have been using the new invest tech service providers to help diversify their portfolios face new challenges especially with the CBN ban on crypto transactions.

This creates a sizable problem particularly for traders that would at least want to earn above the 18% inflation rate.

What this means:

  • Retail investors are paying more attention to financial applications as they have witnessed massive gain in assets like crypto and meme stock.
  • Nigerians may find it difficult to benefit from international retail platforms with the SEC announcement.
  • SEC regulation may hamper the fundamental ideology for globalization especially from a finance perspective.

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