Connect with us
Paramount
Advertisement
Ican
Advertisement
IZIKJON
Advertisement
Polaris bank
Advertisement
Binance
Advertisement
Esetech
Advertisement
Patricia
Advertisement
Fidelity ads
Advertisement
Stallion ads
Advertisement
app

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.

Published

on

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.

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.

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

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.

Published

on

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.

Continue Reading

Market Views

Rising bond yields expected to add pressure on Nigerian and U.S stock markets

The latest outcome of the Nigerian Treasury Bill auction points towards yield elevation in the short term.

Published

on

Global stocks plunge over doubts of America's economic recovery

The Nigerian stock market ended the past week cumulatively on a bearish note.

The NSE All-Share Index and Market Capitalization depreciated by 0.63% and 0.61% to close the week at 40,186.70 index points and N21.026 trillion respectively.

Local investors are currently hunting for greater returns on investment thus increasingly selling off their equity positions and plowing the proceeds in fixed income instruments at a time majority of companies’ earnings reports for 2020 are yet to be issued.

READ: Dangote, Zenith Bank, Champion plunge, Nigerian stock investors lose N112 billion

The latest outcome of the Nigerian Treasury Bill auction points towards yield elevation in the short term.

The most recent data retrieved from CardinalStone Research revealed benchmark yields advanced by an average of 10 basis points.

The overnight and open buyback rates rose by c.17.00% apiece to 20.50% and 20.00% respectively, following the retail FX auction conducted last Friday alongside OMO and bond auction settlements.

Also, the sentiment seems to have reversed given the mixed signal from the fixed income market that yields may begin to rise faster-than-anticipated after the outcome of the last OMO and NTB auctions conducted by the CBN,” said Abiodun Keripe, Managing Director, Afrinvest Research. 

READ: Industrial index down by 0.72%, as shares of BUA Cement, Beta Glas, Cutix decline

On the foreign side, Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on the same prevailing conditions weighing hard on the world’s biggest and most liquid stock market. He buttressed more on rising U.S Treasury yields, an arch-enemy to U.S stocks, as investors switch their attention momentarily to the bond market;

“US equities were weaker Friday while US 10-year yields rose a further 4bps to 1.34%. Those moves were capping off the overriding trend in markets last week: growing concerns about inflation risks pushing nominal bond yields higher and weighing on the equity rally.

READ: This US stock gained 185% since we selected it

“The Biden administration continues to stay on message stressing Congress’s need to pass a significant fiscal package downplaying recent more robust economic data as its full-throttle as a package exceeding US$1.9 trillion heads for a House vote this week in a fast and furious attempt to get the US back to full employment next year.

bitcoin train

“The unprecedented and highly stimulatory policy is an attempt to exceed one million jobs a month from April to September. Still, it underscores the narrower timeline from easing to tightening than post-GFC. And suggest taper tantrum fears are understandable even if severe inflation is still a 2022 issue,” Innes said.

Binance

What to expect: That being said, timing is still everything. The next leg of the reflation will have to be carried more and more by a continued recovery in economic growth, as fiscal and monetary stimulus gets increasingly packed into the prices of global equities.

Jaiz bank ads
Continue Reading
Advertisement




Advertisement

Nairametrics | Company Earnings