The Nigerian Stock Exchange is neck-deep in a bear market, after a bullish run that started in April Last year came to a halt in the first week of January as local investors cycle-out funds from the market in search of impressive yields in the fixed securities space.
This move has seen many stocks on the NSE trade lower than their open price this year, while some have retraced significant fraction of their gains this year, at the back of sustained sell-off in the Nigerian equity space.
Inflation and its impact on investors’ real return
In line with standard practice, with the headline inflation rate at 17.33%, it is important that gains from investment provide a hedge against the persistent drop in purchasing power of naira, as the Nigerian inflationary pressure strengthens into a galloping phase.
However, investors in the stock market who opened positions in key stocks at the beginning of the year can’t brag of substantial gains in their portfolio, while the few ones who sit on profits are clearly making losses in real terms – when the going inflation rate of 17.33% is deducted to reflect the real return on their investment.
While a vast majority of shares on the Nigerian Stock Exchange have been affected by the sell-off in recent times, some stocks on the Nigerian Stock Exchange have delivered gains in excess of 33% – at least 15% higher than the recent inflation rate.
Some of these stocks include the shares of the following consumer goods companies:
Champion Breweries Plc (CHAMPION), 183% YTD GAINS
The medium capitalized brewery stock stands as the best performing stock on the NSE, printing gains in excess of 180% in less than three months, amid buying interests by investors at the back of the expectation of a takeover bid from Heineken.
The company has been in the news for a while, following the acquisition of its shares worth N4.96 billion by Heineken through its wholly-owned subsidiary, Raysun Nigeria Limited.
This acquisition represents 24.3% stake in the local brewer, as it raised the ownership stake of Raysun to 84.7%, giving Heineken the advantage to successfully launch a takeover bid to acquire the balance of 15.3% stake of the company.
The shares of Champion Breweries at the close of the market today presently stands at N2.44 per share, at this price there is a slim 6.5% upside potentials, should Heineken launch a takeover bid of N2.60 per.
Note that Heineken acquired 24.3% of the total issued shares of the brewer at N2.6 per share.
McNichols Plc (MCNICHOLS), YTD GAINS 58%
The shares of McNichols since the beginning of this year has increased by a whopping 58% at the back of renewed buying interests by investors who see tremendous value in the fundamentals of the consumer goods stocks.
McNichols Plc an indigenous homegrown fast-moving consumer brand, a food and beverage company that commenced operations in April 2005, was migrated from the Alternative Securities Market (ASeM) to the NSE Growth Board on the 30th of November 2020, alongside Chellarams Plc, Living Trust Mortgage Plc, McNichols Plc, and The Initiates Plc.
Since then, the shares of McNichols have surged by 59.35%, from N0.50 to N0.80. While the YTD gains stand at 58.09%.
Guinness Nigeria Plc (GUINNESS), YTD 33.16%
The shares of Guinness Nigeria Plc, a leading beverage and alcohol Company have gained about 33.2% since the beginning of this year.
Recall that the shares of GUINNESS declined to an all-time low of N13 in July 2020, amid fears of the impact of the disruption occasioned by the covid-19 pandemic on the long-term fundamental strength of the company.
The sell-off which dropped the shares of the brewer to N13.0 per share was driven by sentiments around the knock-on effect of the COVID-19 lockdown which took a toll on the on-trade channel, which accounts for about 60% of the sales of Guinness.
The company’s Board however issued guidance on this, to reassure shareholders of their commitment, stating that the company’s balance sheet, however, remains strong, and this gives the Board the confidence that the Company has the right resources to continue to deliver value for its shareholders.
Disclaimer: The objective here is to give the needed insight into consumer goods shares with impressive real return. This article should not be seen as a piece of investment advice or guide, as the author advises one to seek the services of a certified financial advisor for such services.
Unemployment: Tech can be used to reduce youth unemployment – BOI
The FG disclosed that technology can be used as a catalyst to solve the youth unemployment crisis in Nigeria.
The FG disclosed that Technology can be used as a catalyst to solve the youth unemployment crisis in Nigeria, citing that embracing tech and infusing it into business processes will make organisations and the country more competitive.
This was disclosed by Mr Olukayode Pitan, Managing Director, Bank of Industry (BOI), at the inauguration of BOI-UNILAG Incubation and Co-Working Hub, on Thursday in Lagos.
What Mr Pitan said
Tech can help solve some of Nigeria’s social problems particularly youth unemployment which has been further exacerbated by the pandemic.
At the Bank of Industry, we believe that corporate organisations that are privileged to be in business at these difficult times need to bring groups of like-minded young individuals together to help create wealth and prosperity for future generations.
Embracing tech and infusing it into business processes will make organisations and the country more competitive.
It can create exciting jobs that encourage our young people to stay in Nigeria even as they work and compete globally,” he said.
The BOI boss also revealed that 2 additional hubs have been completed in Kaduna and Kebbi, citing that the bank will also provide funding to support credible and bankable ideas that emerge from the tech hubs to enable them start operations and scale into viable businesses.
“At the Bank of Industry, we believe that with the collective will of our young people’s positive passion, the right government policies, mentorship, and private capital, this can become a reality in a short period,” he said.
What you should know
Nigeria’s unemployment rate as of the end of 2020 rose to 33.3% from 27.1% recorded as of Q2 2020, indicating that about 23,187,389 (23.2 million) Nigerians remain unemployed.
According to the last Gross Domestic Product Report, released by the National Bureau of Statistics (NBS), the information and communication sector grew by 13.8%% in full-year 2020 compared to 11.08% recorded in 2019 and 9.65% in 2018.
FG deploys undercover agents to check touting, extortion, others by passport officers
This is part of measures to make the passport application process easier, seamless and transparent.
The Federal Government, on Thursday, announced plans to deploy undercover security operatives in a bid to check touting, extortion and other sharp practices by passport officers across the country and at Nigerian missions abroad. This is part of measures to make the passport application process easier, seamless and transparent.
This disclosure was made by the Minister of Interior, Mr Rauf Aregbesola, in Abuja on Thursday, April 22, 2021.
The Minister stated that the country had in the past witnessed several challenges, which included shortage of booklets, touting, racketeering, inflating the cost of passports being issued to ineligible persons, and so on.
What the Minister of Interior is saying
Aregbesola, in his statement, said, “We are turning round the entire passport application process in a way that is going to be easy, seamless and transparent. We will also accord human dignity to applicants and fulfil citizenship integrity.
Therefore, I am declaring a zero-tolerance stance to all forms of touting. No applicant will be made to pay any illegitimate fees. We are going to embed security operatives, seen and unseen, in all our passport offices. They will wear body cameras.
They will also detect and report any form of solicitations, inflation, improper communications, extortion, diversion, hoarding and other corrupt practices. Applicants will have no basis for further communication officers, other than to complete their application process and leave the venue.
The date for the collection of their passports or any challenge to the application will be communicated to them. The technology for the efficient running of this system has been acquired and will be deployed. Those caught will be dealt with according to the law.”
The Minister said that an ombudsman would also be created for members of the public to receive complaints and reports on officers trying to deviate from prescribed guidelines and subvert the process.
He explained that 2 special centres for expedited services had been created, adding that the special centres would run on a public-private partnership basis.
He said, “We are publishing on our website the list of the backlog of passports that are ready which are yet to be collected by the owners. They will be required to go to the state commands to collect them.”
In case you missed it
- It can be recalled that in March 2021, the Federal Government in partnership with the private sector, launched the Nigeria Immigration Service Passport Express Centre.
- This is to enable the government offer passport services to Nigerians and make passports available within a maximum period of 72 hours after a successful application.
Nairametrics | Company Earnings
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- Sovereign Trust Insurance Plc notifies stakeholders of 26th Annual General Meeting.
- Dangote Cement Plc to hold AGM on May 26th
- Linkage Assurance Plc proposes N500million as final dividend for 2020, and a bonus issue on its existing shares.
- VFD Group set to raise additional capital of N9.01 billion through rights issue and private placement.
- GT Bank records a 9% dip in profit to N45.55 billion in Q1 2021.