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Stock Market

Airtel to pay shareholders that hold shares on the NSE dividend at N386/$1

Airtel said it will pay shareholders that hold their shares on the NSE dividend in naira at N386/$1.

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Raghunath Mandava, Airtel Africa, Airtel to pay shareholders that hold shares on the NSE dividend at N386/$1

Airtel has announced that shareholders holding their shares on the NSE, who do not indicate their currency of choice before November 27 will be paid their dividends in naira at N386/$1.

This information was conveyed through a corporate disclosure announcing its interim dividend payments and the currency exchange rates. The disclosure was published on the website of the NSE  and signed by the Group’s Secretary, Simon O’Hara.

The company advised in the document that shareholders that hold their shares on the NSE may elect to receive their entire dividend payment in Dollars, while shareholders on the London Stock Exchange (LSE) may elect to receive their entire dividend payment in GBP or USD Dollar.

In light of this, the company submitted that the following currency exchange rate will be applicable in the determination of the interim dividend payment to any shareholders that qualify for and have elected to receive the interim dividend payment.

(READ MORE: Airtel earmarks a total interim dividend of $56 million for shareholders)

Exchange Rate

1 USD = 386 Naira

1 USD = 0.7534 GBP

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The company noted that the exchange rate for the Naira amounts payable was determined by reference to the exchange rates applicable to the US Dollar available on 10 November 2020.

What you should know

  • The CBN official exchange rate currently stands at N379. The rate has not changed since the 6th of August 2020, when it increased by 5.27% from N360 on the 5th of August to N379.
  • Further checks revealed that the exchange rate for the US$/Naira applied by the company appears to be that of NAFEX. The NAFEX rate had opened at N385.83 and closed at N385.67 on Tuesday 10th November. The rate also closed at N385.67 on Thursday 12th November.

(READ MORE: Naira falls across forex markets, demand pressure increases despite huge dollar supply)

What this means

Considering that the CBN rate was N379/$1 the day the decision was made, it may be argued that the N386/$1 proposed by the company is a fair decision on the NSE shareholders of the company. This is because compared with the CBN rate, shareholders gained N6 per dollar on the conversion.

However, compared with the rate at the parallel market, which had opened and closed at N457/$1 on the day the decision was made – Tuesday 10th November, one may argue that shareholders would have wanted more in terms of currency conversion. Viewed from the parallel market exchange rate angle, NSE shareholders may conclude that they lost N71 per dollar on the conversion.

Key metrics

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  • Airtel Africa Plc’s share price is N489.9, the highest price for a unit of share in 52 weeks is N489.9 and the lowest was N298.9.
  • The market capitalisation as at close of business Thursday, November 12 stood at N1.70 trillion.
  • The company reported revenues of $851 million in 2020 Q2, $57 million post-tax profits and 1.1 cents Earnings Per Share.

Adeyemi holds a PhD in Accounting Sciences. He has worked in the Educational Sector and as an Independent Consultant.

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Markets

Bullish dominance in the NGX Banking Index

The NGX Banking Index made a bullish recovery at the end of yesterday’s trading session with an increase of +1.11%, pushing the index points to 354.25.

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gtbank, stock market, Bulls dominate Nigerian bourse ASI up 0.74%, Investors gain N77 billion., Crude oil bulls lose steam, as COVID-19 cases hit record high

The NGX Banking Index made a bullish recovery at the end of yesterday’s trading session with an increase of +1.11%, pushing the index points to 354.25. There were 5 profits opposing 5 losses, but the magnitude of the gainers pushed the Banking Index into the green.

Union Bank led the gainers with a profit of +0.45, pushing its price upwards from N4.95 to N5.40.

Zenith Bank came second amongst the gainers with a profit of +1.14%, posting N22.20 from the previous day’s close of N21.95.

Guaranty Trust Bank also closed in profits with an increase of +0.86%, leaving its price at N29.40 from its previous price of N29.00. Sterling Bank was also part of the gainers with a profit of +0.63% putting its price at N1.60 from its previous close of N1.58.

Access Bank made profits of 0.62%, pushing its prices to N8.15 from N8.10.

Wema Bank was the biggest loser at the end of yesterday’s trading session as it made losses of -4.92%, leaving its price at N0.58 from N0.61.

Jaiz Bank also made losses of -3.23%, pushing its closing price to N0.63 from N0.62 obtained the previous day.

Ecobank joined the losers, posting a loss of -1.89% which put its price at N5.20 from its previous price of N5.30.

Fidelity Bank followed with a loss of -0.90%, putting its price at N2.24 from N2.22. UBA also posted a loss of -0.69%, pushing its price from N7.25 to N7.20.

Outlook

  • Market sentiment tends bullish as the magnitude of gainers outweighed the losers despite the 5 gainers and 5 losers held at the end of the trading session.
  • Nairametrics advises cautious buying amid growing uncertainties.

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Markets

Union Bank, LINKASSURE push NGX ASI into recovery

The market breadth closed positive with the bulls as LINKASSURE led 25 Gainers, and 16 Losers topped by NEM.

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Nigerian stock exchange market made a bullish recovery on the last day of the week’s trading session. This surge was bolstered by gains made by UBN and LINKASSURE amongst others. The All-Share Index increased by +0.21% to close at 39,198.75 from 39,114.73.

  • Nigerian Stock Exchange market value currently stands at N20.48 trillion. Its Year-to-Date (YTD) returns currently stand at -2.66%.
  • The market breadth closed positive with the bulls as LINKASSURE led 25 Gainers, and 16 Losers topped by NEM, showing a hint of consolation.

Top gainers

  1. LINKASSURE up +9.25% to close at N0.69
  2. JOHNHOLT up +9.26% to close at N59
  3. UBN up +9.09% to close at N5.40
  4. ROYALEX up +8.33% to close at N0.65
  5. CHIPLC up +8.33% to close at N0.39

Top losers

  1. NEM down -9.50% to close at N1.81
  2. COURTVILLE down -9.09% to close at N0.20
  3. SUNUASSUR down -8.47% to close at N0.54
  4. INITSPLC down -6.98% to close at N0.40
  5. ETERNA down -6.89% to close at N5.81

Outlook

The market recovered from a week-long loss as it posts profit at the end of the trading session.

  • Market sentiments tend toward bullish momentum as the NGX ASI closes with 25 Gainers and 16 losers.
  • Nairametrics however, advises cautious buying in this era of growing uncertainties.

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