- Zenith Bank has joined the group of stocks worth over one trillion (SWOOTs) as its market capitalization crossed N1 trillion.
- Zenith Bank’s share price increased by 3.23% to N32 per share, resulting in a market capitalization of N1.004 trillion.
- The combined market capitalization of SWOOTs, including Zenith Bank, is now valued at N21.560 trillion, accounting for 66.7% of the entire NGX Equity market capitalization.
Zenith Bank is the latest company to join the exclusive group of stocks worth over one trillion (SWOOTs) as market capitalization crossed N1 trillion during the week.
The stocks in this category are now Airtel Africa, MTN Nigeria, Dangote Cement, BUA Foods, BUA Cement, and Zenith Bank.
Its share price appreciated by 3.23% from last week to close at N32 per share taking its market capitalization above a trillion to close at N1.004 trillion.
At the close of market activities for the week, the combined market capitalization of SWOOTs is now valued at N21.560 trillion from N20.617 trillion the previous week.
Shares of BUA Cement, Dangote Cement, and Zenith Bank all gained, Airtel and MTN both closed negative while BUA Foods remained unchanged from last week.
SWOOTs make up 66.7% of the entire NGX Equity market capitalization as such influence the direction and performance of the stock market.
A summary of the performance of each stock is analyzed below.
Zenith Bank
Zenith Bank is the latest company to join the exclusive group of stocks worth over one trillion (SWOOTs) as market capitalization crosses N1 trillion.
- Its share price appreciated by 3.23% from last week to close at N32 per share. The market capitalization gained N31.39 billion to close to N1.004 trillion.
- Zenith Bank shares are up 48% in the last year and have been one of the best performers on the banking index.
Zenith Bank is the only financial institution in the current group of SWOOTs.
BUA Foods Plc
The share price of BUA Foods Plc remains unchanged from last week to close at N135.75 per share. Similarly, the market capitalization stood at N2.44 trillion.
- In its reported unaudited financial statement for Q1 2023, revenue grew by 60.2% to N144.32 billion from N90.06 billion recorded in Q1 2022.
- Profit After Tax for the period rose by 77.1% to N40.47 billion from the N22.84 billion recorded in Q1 2022.
Earnings Per Share (EPS) grew to N2.25 an increase of 77% recorded in Q1 2022.
BUA Cement Plc
BUA Cement Plc’s share price gained 4.65% from last week as it closed at N90 per share. Its market capitalization rose to N3.05 trillion.
- The company’s unaudited financial report for Q1 2023 revealed revenue of N106.35 billion, reflecting a growth of 9.65% from N96.99 billion in 2021.
- Meanwhile, profit after tax for Q1 2023 fell by -19.1% to N26.80 billion from N33.14 billion recorded in the corresponding period.
Earnings Per Share (EPS) also fell by -19.39% from N0.98 to N0.79.
Dangote Cement Plc
Dangote Cement Plc’s share price gained 1.23% from last week to close at N287.5 per share.
- The company, which is the most capitalized cement producer on the NGX, has a total Market capitalization of N4.90 trillion.
- The unaudited Q1 2023 financial result revealed a marginal loss in revenue of –N6.46 billion (1.56%) to N406.72 billion from N413.18 billion in Q1 2022.
Meanwhile, Profit After Tax for the period marginally increased by N3.65 billion (1.56%) to N109.50 billion from N105.85 billion in Q1 2022.
 Airtel Africa Plc
Airtel Africa Plc’s share price lost -1.72% from last week to close at N1266.8 per share.
- Its market capitalization lost N83.43 billion to close at N4.76 trillion.
- According to its audited financial report, Airtel Africa raked in the sum of N980 billion ($2.128 billion) from its services for the financial year ending March 31, 2023.
- This represents a 20.3% growth year on year compared with the N864.9 billion ($1.878 billion) recorded in the same period last year.
MTN NIGERIA PLC
MTN Plc’s share price depreciated by -3.10% from last week to close at N265.50 per share.
- The telecom giant retains its status as the most valued company at NGX as its market capitalization declined to N5.404 trillion losing N173.01 billion from last week.
- In its unaudited financial report for Q1 2023, MTN had 20.6% revenue growth to N568.14 billion from N470.98 billion in Q1 2022.
The Profit After Tax also grew by 4.6% to N101.30 billion from N96.82 billion recorded in Q1 2022.
What You Should Know
The NGX All-Share Index and Market Capitalization appreciated by 0.34% to close the week at 59,206.63 and N32.237 trillion respectively.
The SWOOTs with a combined market valuation of N21.560 trillion make up over 66% of the entire NGX, hence, strongly influencing the growth or otherwise of the exchange.
With the latest devaluation of the naira as well as expected future devaluations due to current poor economic fundamentals, crossing the trillion naira mark shouldn’t be much of a big deal nor a major achievement by firms who are leaders in their respective industries in the country.
Devaluation has NO effect on the value of stocks listed domestically and traded in Naira.
It may have an indirect effect for companies doing business abroad in foreign currencies (Airtel Africa, Dangote Cement, some banks, etc.) in terms of increased Naira revenue, which might down the road increase their valuation but there’s also the possibility of increased Naira costs affecting such valuation.
Devaluation does have some effect albeit indirectly. For instance, rising costs of imported raw materials, fuel, electricity and machinery depending on industry would be largely passed onto consumers as we have seen with prices of most fmcg products in recent times thus shooting up their turnover considerably in naira terms. And since industry leaders are expected to manage their costs better than others, then their PAT and EPS would also be expected to increase, thereby attracting increased demand for their shares, increasing valuation in naira terms, although their dollar valuations may remain the same or even drop as a consequence of the devaluation.
Yes, as I stated in the second paragraph of my comment, devaluation may have an indirect effect on valuation to the extent it affects OPERATIONS (and thus revenue). However, devaluation by itself has NO (direct) effect on the valuation of stocks listed domestically in Naira. One Naira still buys one Naira!