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Market Views

World’s Biggest IPO suspended

Ant Group’s world record-setting IPO scheduled to hold in Hong Kong and Shanghai has been suspended.

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IPO, World's Biggest IPO suspended, Jack Ma's second edition of Africa Netpreneur Prize opens for applications

Ant Group’s world record-setting IPO, scheduled to hold in Hong Kong and Shanghai, has been suspended, according to a report credited to CNBC news.

What we know

Both exchanges, located in Hong Kong and Shanghai, issued statements to this effect. Alibaba, which has a majority stake of about 33% in Ant Group, saw its shares fall; it lost more than 5% in U.S. premarket trading.

READ: Afreximbank forced to postpone IPO plan in London; here’s why 

Ant Group’s controller, Jack Ma, Executive Chairman, Eric Jing, and CEO, Simon Hu, were scrutinized by regulators in China, according to a statement seen from the China Securities Regulatory Commission.

On Tuesday, the Shanghai Stock Exchange referred to the investigation, while explaining why it suspended the IPO.

Ant stated, “significant issues such as the changes in financial technology regulatory environment,” according to a CNBC translation of the statement from Mandarin.

“These issues may result in your company not meeting the conditions for listing or meeting the information disclosure requirements.”

READ: Cryptos: Nigerian financial experts talk risks associated with trading digital assets

What they are saying

A spokesperson for Ant Group apologised for the delay of its initial public offering and further disclosed that the Group was working through regulatory concerns with the Hong Kong and Shanghai stock exchanges.

“Ant Group sincerely apologizes to you for any inconvenience caused by this development,” the statement read. “We will properly handle the follow-up matters in accordance with applicable regulations of the two stock exchanges. We will overcome the challenges and live up to the trust in the principles of stable innovation; embrace of regulation; service to the real economy; and win-win cooperation.”

What you should know

bitcoin train

Recall that Nairametrics broke the news about a week ago on the world’s payment juggernaut, Ant Group, hoping to raise $34.5 billion in its dual initial public offering (IPO) after setting the price for its shares, making it the biggest listing of all in modern history.

Binance

READ: Airtel Africa may consider dual listing on London and Nigerian Stock Exchanges

  • The Chinese financial powerhouse had earlier disclosed 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.
  • Ant Group’s Shanghai-listed shares were to 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 were priced at 80 Hong Kong dollars each, raising 133.65 billion Hong Kong dollars or $17.24 billion.
  • The listing was to produce a return of at least $34.5 billion based on possible demand.

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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. Follow Olumide on Twitter @tokunboadesina or email [email protected] He is a Member of the Chartered Financial Analyst Society.

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Financial Services

Jim Ovia is set to earn N9.58 billion in dividend for FY 2020

The highly revered banker is the single majority shareholder of Zenith Bank as he directly owns 3,546,199,395 units of the fast-rising bank stock.

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Jim Ovia: From a clerk to founder of Nigeria's most profitable bank

The founder and Chairman of Zenith Bank Plc, Mr. Jim Ovia is expected to earn a massive sum of N9.575 billion in dividend for the financial year ended December 2020

The highly revered banker is the single majority shareholder of Zenith Bank as he directly owns 3,546,199,395 units of the fast-rising bank stock out of the 31,396,493,787 ordinary shares available. This gives him an 11.29% direct interest in the Tier -1 bank.

It’s however important to note that such dividend is subject to a 10% withholding tax in Nigeria.

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

Recall that about a day ago, the Board of Directors of the bank in a statement released via the Nigerian Stock Exchange proposed a final dividend of N2.70, amounting to a total payout of N3.00 per share for the financial year 2020 (interim: N0.30).

This proposal reflects the past year’s robust performance and appears to signal that Zenith bank remains well-positioned to perform in the current financial year. However, there was a lower payout ratio at 40.9% compared to FY’19 (42.1%).

  • Key earnings drivers to the financial year performance under review were a 90 basis points drop in the cost of funds to 2.1%, which propelled net interest income (+12.2% YoY) and a 3.8x jump in revaluation gains to N43.4 billion.
  • These offset pressures from operating costs (the cost to income ratio rose 1.2ppts to 50.0%) and impairment charges (cost of risk rose 40basis points to 1.5%)

READ: Jim Ovia: From a clerk to founder of Nigeria’s most profitable bank

Described as the ‘Godfather of banking in Nigeria’ by Forbes Africa, Jim Ovia is quite popular for his business dexterity and leadership skills, especially in the banking sector.

His early interest in technology was the reason Zenith Bank became the first Nigerian company to have a functional website in 1995 and was able to smoothly migrate its operations from analog times to a digital era.

From a single branch in a residential building, Zenith Bank now has hundreds of branches all over Nigeria and several subsidiaries in other countries. The bank became a Public Limited Company in 2001 and was listed on the Nigeria Stock Exchange (NSE), and later on the London Stock Exchange (LSE).

On the 27th of April 2007, Zenith Bank Plc became the first Nigerian bank in 25 years to be licensed by the UK Financial Services Authority (FSA), giving rise to Zenith Bank UK Limited.

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Market Views

Zenith Bank’s stellar earnings pause bearish trend at Nigerian bourse

Zenith Bank had earlier released its audited financial year 2020 results showing impressive growth on the back of a stellar Q4 outing.

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Zenith Bank GMD Ebenezer Onyeagwu, Central Bank of Nigeria, CBN's loan-to-deposit ratio policy, Nigerian Stock Exchange NSE stocks, Banks in Nigeria, Deposit Money Banks in Nigeria, Zenith Bank collaborates with fintechs, but insists it is not scared to compete with them, Zenith Bank sets withdrawal limit for customers, as dollar sells for N400, NIGERIA| ZENITH BANK: Revaluation gains support marginal profit growth

The Nigerian bourse ended the second trading session slightly positive amid impressive gains from Zenith Bank. The All Share Index improved by 0.03% to 40,164.86 index points. Year-to-date return and market capitalization settled at -0.26% and N21.01 trillion respectively.

A total volume of 337.9 million units of shares, valued at N3.84billion exchanged hands in 4,164 deals.

The most traded stocks by volume were FBNH (64.58 million units), ZENITHBANK (52.67 million units), TRANSCORP (41.98 million units) and while ZENITHBANK (N1.34 billion), FBNH (N471.80 million) and UBA (N128.22 million) topped the value chart.

AIICO (+7.14%) led the gainer’s chart today, while SUNUASSUR (-9.88%) was the top loser. However, the market breadth index was negative with 16 gainers against 24 losers.

Top gainers

  1. AIICO up 7.14% to close at N1.2
  2. LIVESTOCK up 7.14% to close at N2.25
  3. FLOURMILL up 6.16% to close at N31
  4. ZENITHBANK up 4.84% to close at N26
  5. CUTIX up 4.65% to close at N2.25

Top losers

  1. SUNUASSUR down 9.88% to close at N0.73
  2. LASACO down 9.87% to close at N1.37
  3. AFRIPRUD down 9.85% to close at N5.95
  4. ABCTRANS down 8.57% to close at N0.32
  5. UPL down 8.53% to close at N1.18

Outlook

Nigerian stocks ended Tuesday’s trading session on a slightly positive note amid stellar performance for Nigeria’s top tier-1 bank.

  • Zenith bank, some hours ago had earlier released its audited financial year 2020 results showing impressive growth on the back of a stellar Q4 outing.
  • In FY’20, the tier1 bank recorded a 10.4% YoY jump in profit after tax to N230.6 billion (vs N211.6 billion expected).

That being said, the Nigerian Stock Exchange consumer goods and insurance indices fell by 1.61% and 0.92% respectively. On the flip side, the NSE banking index closed as the lone gainer, up by 1.68%, while the industrial and energy indexes remained unchanged.

Nairametrics recommends you seek the advice of a stockbroker amid price volatility presently prevailing at medium and low capitalized stocks.

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