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Markets

GUINNESS upsurges as Nigerian stocks plunge

The All-Share Index decreased by -0.57% to close at 39,045.13.

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The Nigerian Stock Exchange (NSE) market made another bearish end after Wednesday’s trading session, posting a loss. The All-Share Index decreased by -0.57% to close at 39,045.13 from the 39,267.11 index points which gives support to the loss recorded on Tuesday.

  • The NSE market value currently stands at N 20.55 trillion. Its Year-to-Date (YTD) returns currently stands at -3.04%
  • The market breadth closed slightly negative for the second time this week as LINKASSURE led 18 Gainers and DAARCOMM topped the list of 24 Losers at the end of today’s session, showing bearish momentum.

Top gainers

1. LINKASSURE up 10.00% to close at N0.66
2. MEYER up 9.76% to close at N 0.45
3. PRESTIGE up 9.76% to close at N0.45
4. NEM up 9.52% to close at N2.30
5. GUINNESS up 7.28% to close at N33.90

Top losers

1. DAARCOMM down 8.70% to close at N0.21
2. WEMABANK down 8.06% to close at N0.57
3. UPL down 7.76 % to close at N1.07
4. UAC-PROP down 7.23% to close at N0.77
5. JAPAULGOLD down 6.82 % to close at N0.41

Outlook

Nigerian stocks started the third trading session of the week bearish. Trading turnover in Tuesday’s trading session was boosted by WEMBANK UBN, ZENITH and GUARANTY

  • Nairametrics however, advises cautious buying in this era of growing uncertainties
  • Market sentiment trends downward as 24 losers outweigh 18 winners

Sigma Pensions

Ubah,Jeremiah ifeanyi is a PhD candidate of Economics in Covenant university. He has held positions as the financial manager in Opera and is also a research ambassador in M&S research Hub. Ifeanyi is currently the financial market analyst for Nairametrics. Follow Ifeanyi on Twitter @ubahjc

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Debt Securities

DMO to auction N150 billion bonds for April on behalf of FG

It also states that the interest is payable semi-annually with the redemption expected to be in bullet payment on the maturity date.

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The Debt Management Office (DMO) has announced the offer of N150 billion bonds for subscription by auction in the month of April on behalf of the Federal Government.

A breakdown of the bonds shows that a 10-year reopening bond is to be offered at the rate of 16.2884% with a maturity date in March 2027; a 15- year reopening bond will be offered at 12.5% with a maturity date in March 2035; and the third and longest bond which is a 25-year reopening bond will be offered at 9.8% and mature in July 2045.

This disclosure is contained in a circular issued by the DMO on April 14, 2021, and can be seen on its website.

The circular states that the bonds which would be auctioned on April 21, 2021, have a settlement date of April 23, 2021, adding that the unit of sale is N1,000 per unit subject to a minimum subscription of N50,000 and in multiples of N1,000 thereafter.

It also states that the interest is payable semi-annually with the redemption expected to be in bullet payment on the maturity date.

In case you missed it

  • The DMO had earlier disclosed that the Federal Government’s bonds for March worth N150bn which were auctioned were oversubscribed by N183.48bn.
  • 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.
  • The auction result added that out of 82, 125 and 215 total bids for the tenures, 48, 88 and 176 were successful.
  • It stated that a total of N262.1bn was allotted, comprising of N44.01bn, N86.29bn and N131.80bn respectively.

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Business News

Cost of preparing jollof rice in Nigeria rises by 7.8% in Q1 2021 – SBM

The average cost of making a pot of jollof rice in Nigeria rose by 7.8% between March 2020 and March 2021.

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SBM Jollof Index

The average cost of making a pot of jollof rice in Nigeria rose by 7.8% between March 2020 and March 2021. This is contained in the SBM Jollof index report for Q1 2021, published by SB Morgen.

According to the report, the increase was caused by the prolonged border closure, increased energy tariffs, exchange rate volatility, coronavirus pandemic, and the restrictions of forex for the importation of items, largely due to falling oil prices.

It also identified the effect of the #EndSARS protest against brutality and the response of the government, which brought the main economic states in Nigeria (Lagos and Abuja) to a standstill for major parts of the month of October 2020.

Highlights

  • Specifically, the average cost of making a pot of jollof rice in Nigeria increased from N7,167 recorded in Q4 2020 to N7400 in the first quarter of 2021. representing a 3.24% quarter-on-quarter increase.
  • The cost of making a pot of rice is most costly in Wuse and least costly at Awka. The report, however, suggests that the disparity could be a result of operational costs rather than the actual cost of commodities.
  • While it is possible for people in Awka to substitute buying some of the commodities with products from their subsistence agriculture, the same is not possible in Wuse, largely because of its very urban nature.
  • The high exchange rate of N410/$1 to N475/$1 in the parallel market also adversely affected the price of jollof rice in the country as tomato puree, rice, turkey, and seasoning are affected by the exchange rates.
  • Also, flooding destroyed several hectares of rice farms across the country. The report stated that up to 500,000 hectares of rice farms were destroyed in Kebbi State alone.
  • The price of turkey has increased as a result of increased electricity tariffs which has forced increases in cold room costs.

According to the SBM Jollof report, “Our interviews with traders shows that transportation costs have not reduced since they were increased during the introduction of the COVID-19 protocols. One of the traders stated that she pays almost twice her former transportation cost prior to COVID-19, and the prices have not gone down even after drivers began to carry more passengers than permitted by the social distancing protocol.”

Jollof costliest to cook in Wuse, Abuja

In Abuja, food production is mainly undertaken by its neighbouring states Benue, Kaduna, Kogi and Niger, all of which have seen several attacks in the past few years, showing a decline in that dimension.

  • The report revealed that the cost of making a pot of jollof rice is highest in Wuse, Abuja.
  • Although food distribution has not been affected and unemployment rates are over 40%, but being the administrative headquarters of the government and most international NGOs, outreaches and food distribution are common.

“In all the states surveyed, out of a score of 50, the combined score ranged from 18-27 which shows a general decline in entitlements across the states and similar levels of severity. While Bauchi has a higher chance at getting food insecure, the other states are slightly above the borderline, showing medium decline in their entitlement (ability to get food).”

What you should know

According to the report, in all the markets surveyed, the cost of making a pot of jollof rice increased in Awka, Calabar Municipal Market, Mbakpa, Onitsha, Port Harcourt and Trade Fair, while Balogun, Bauchi, Bodija, Dugbe, Kano, Nyanya and Wuse experienced a slight decrease.

  • The South-South and South-East states experienced an increase in the cost of making Jollof rice, Northern states experienced a price reduction.
  • The price decrease was attributed to the harvest period which usually forces prices of some commodities like onions and tomatoes down.
  • It however suggested that this decrease may have failed to happen in the Southern part of the country because of the cost of transporting the goods down south and because of the price surge introduced by the food blockade.

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