Transactions on the Nigerian Equity Market closed w/w on a negative note, as bears dominated all of the five trading sessions. This we believe was a result of investors’ sustained sell-off in large and medium capitalised stocks. Consequently, the Market Indicators (NSE-ASI and NSE Market Capitalization) slumped by 2.93% w/w to close for this week at 38,324.07 absolute points and N19.98 trillion compared to 39,481.89 absolute points and N20.58 trillion last Friday. This nominally translated to a week-on-week loss of N603 billion in Market Capitalization value. The Oil and Gas Sector closed positively with a percentage of (+7.39%), while the remaining four major sectors closed negatively, led by the Industrial Sector (-3.34%), Banking Sector (-1.53%), Insurance Sector (-0.74%), and Consumer Goods Sector (-0.03%). ETERNA emerged the best performing stock this week with a w/w gain of +21.21%, while CILEASING shed -18.80% to emerge as the top loser. A total turnover of 1.05 billion shares worth N11.54 billion naira in 17,218 deals were traded this week by investors on the floor of the Nigerian Stock Exchange as against a total of 840.33 million shares worth N9.56 billion naira in 13,232 deals, Twenty-six (26) equities appreciated during the week, higher than Thirty-three (33) equities in the previous week. Forty-one (41) equities depreciated, lower than nineteen (19) equities in the previous week, while ninety-four (94) equities remained unchanged, higher than one hundred and nine equities (109) equities recorded in the previous week.
Asian stocks rose on Friday, setting the region up for a weekly gain, as investors tempered fears about hot inflation and the prospects of an early tapering of stimulus by the Federal Reserve. Japan’s Nikkei jumped 1%, while MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.6%. Taiwan’s tech-heavy stock index climbed 1.8%, leading gains in the region, while Chinese blue chips added 0.3%. For the week, an index of stocks across Asia-Pacific was set for a 1.9% advance. Futures pointed to a further 0.3% rise for the S&P 500 later in the global day, following a more than 1% jump on Thursday. Tech stocks led those gains as Treasury yields declined following a weaker-than-expected U.S. business activity reading. A decline in commodity prices, particularly oil, also undermined the thesis for too-hot inflation. “It’s still a market trying to work out where inflation is going to go, and what that might mean for Fed policy somewhere down the line,” said Kyle Rodda, a market analyst at IG in Melbourne. The drop in oil prices accompanied by lower bond yields has changed sentiment very quickly, he said.
The China Harbour Engineering Company (CHEC) has injected $1.1billion into the development of the Lekki Port project and automatically becoming the largest shareholder of the project with 45 years Build, Operate Transfer (BOT) concession period. CHEC is now the largest shareholder of the Lekki port project following the injection of $1.1billion into the project representing 70 percent shareholding stake with partners, Tolarams group having 5 percent, making it a total shares 75 percent. The Managing Director, speaking on the access roads to the port, he hinted that efforts are in place to expand the road network leading to the port and also connect it by rail, he explained: “With Dangote Refinery just beside us expected to operate with nothing less than 700 trucks, we are optimistic that efforts are in place to expand the road networks and also link the port by rail. “The road is currently a single lane road network, and we are confident that before port operations commence next year, the road will have been expanded to a two lane highway to accommodate seamless cargo evacuation from the ports while also servicing the cluster of businesses that will spring up around here by next year when the ports become operational.”
The African Export-Import Bank (Afreximbank) announced that it has successfully closed a $1.3 billion dual tenor bond issuance, the bank’s largest-ever transaction in the international debt capital markets. Afreximbank printed a $600 million 5-year note at a spread of T+185 basis points (bps) and a $700 million 10-year note at a spread of T+220bps, after achieving a final order book of $4.5 billion. A statement explained that the Initial Pricing Thoughts (IPTS) were announced at T+220bps area and T+250bps area for the 5-year and 10-year tranches, respectively. It noted that backed by strong demand, the combined books peaked at $5 billion, with a slight skew towards the 5-year tranche, seeing pricing set at T+185 bps to a re-offer yield of 2.634% and T+220bps to a re-offer yield of 3.798%, respectively. “The 10-year tranche was finally priced at only a 5bps New Issue Premium (NIP), while the 5 year was priced flat to fair value.
FMDQ Securities Exchange Limited has announced the approval for the quotation on its platform of the Nigerian Breweries Plc N1.05bn Series 12, N0.94bn Series 13, and N2.67bn Series 14 Commercial Papers under its N100bn Commercial Paper Issuance Programme. The Exchange said in a statement on Tuesday that this brought the total CPs issued by the issuer since the renewal of its N100bn CP Programme in 2019 to N156.20bn, with a total of N14.76bn currently active. It said corporate institutions continued to successfully tap the Nigerian debt capital markets to access stable short, medium and long-term finance to fund key activities in their organisations. According to the Exchange, the CP market has shown resilience by providing issuers with a sustained opportunity to grow their businesses, while contributing to the overall growth of the Nigerian economy. FMDQ Securities Exchange Limited also approved the quotation of the N960 million Series 35 Mixta Real Estate Plc Commercial Paper under its N20 billion CP Issuance Programme on its platform.The proceeds from this CP quotation will be used to finance Mixta Real Estate Plc’s short-term funding requirements
The Governor, Central Bank of Nigeria, Mr Godwin said on Tuesday that over N300bn had been disbursed to companies operating in southern part of Nigeria as part of its interventions in the agricultural sector. CBN said this while faulting claims in certain quarters suggesting that the bank’s targeted interventions in the sector were tilted in favour of a certain section of the country. Companies and farmers across Lagos, Edo, Ondo, Ogun, Osun, Ekiti, Bayelsa, Rivers, Cross River states were major beneficiaries of the bank’s interventions. CBN Governor made the clarification in Ado-Ekiti, Ekiti State, while unveiling the 2020 wet season harvest aggregation and inauguration of the 2021 wet season input distribution in the South-West geopolitical zone under the CBN-RIFAN Anchor Borrowers’ Programme. The CBN next MPC meeting is scheduled to be held on May 25 and May 26, where the eleven (11) members of the MPC committee will convene at the CBN headquarter to review and make critical decisions on the direction of key monetary policy variables for the next two months.
Oil prices extended gains on Tuesday as hopes of a solid recovery in fuel demand following the re-openings of the U.S. and European economies offset concerns over spreading COVID-19 cases in Asia. Brent crude oil futures were up 19 cents, or 0.3%, at $69.65 a barrel by 0517 GMT, while West Texas Intermediate (WTI) was up 18 cents, or 0.3%, at $66.45 a barrel. Both contracts rose more than 1% on Monday. “Behind the gain is growing optimism of strong recovery in gasoline and other fuels in the United States and Europe in light of easing of various pandemic-related restrictions,” said Chiyoki Chen, chief analyst at Sunward Trading. “There are concerns about spreading infection cases in Asia, but it will be solved in a matter of time as the vaccine spreads,” he added, predicting that Brent prices will be headed toward $75 a barrel later this month. .
As the Central Bank of Nigeria (CBN) signals a subtle harmonisation of exchange rates with the removal of N379/$1 official rate from its website, all is set for labour unions to lock horns with the Federal Government on petrol subsidy removal. The return of subsidy have posed new challenges for the country in terms of discrepancies in the volume of daily consumed fuel about to be worsened by the apex bank’s adoption of the Investors and Exporters (I&E) window rate, pushing subsidy claims above N120 billion every month. While the Presidential Economic Advisory Council had last week asked President Muhammadu Buhari to remove subsidy on petrol and adopt a pricing regime that reflects the cost of the commodity, the Nigeria Labour Congress (NLC), in a swift reaction at the weekend, insisted that petrol subsidy must not be removed and that it would not shift grounds on this position until Nigeria’s refineries were fixed.
CORPORATE DISCLOSURE Central Securities Clearing System Plc has said it will pay a total dividend of N5.85bn to its shareholders for the financial year 2020, 36 per cent higher than the N4.3bn dividend paid in the previous year. Its shareholders approved at the Annual General Meeting on Tuesday the N1.17 dividend per share proposed by the board, compared to N0.86 dividend per share in 2019. CSCS said the dividend would be paid to all qualifying shareholders who held shares at the close of business on May 10, 2021.
FOREIGN EXCHANGE The Naira this week remained unchanged against the USD at the official window to close the week at ₦379/USD as against the previous week, while at the I&E FX windows, the USD closed the week at ₦412.00/USD against ₦411.67/USD from last Friday position. In the meantime, the foreign reserves this week weakened by $227.30 million from the level of $34.35 billion (20/05/2021) to $34.58 billion (11/05/2021), as the Brent Crude oil price also declined by $2.27 pbl w/w from $68.71 pbl last Friday to $66.44 pbl.
MONEY MARKET The overnight (O/N) rate closed at 15.25%. While Open Buy-Back (OBB) rate closed at 15.00% position. Market Outlook: – We expect the mixed sentiments to persist in the coming week, in reaction to possible decisions at the CBN MPC meeting scheduled for next week This publication is strictly for information purposes only. Capitalfield Asset Management Company Ltd is a subsidiary of Capitalfield Investment Group Limited. Capitalfield Asset Management Company Ltd and its employees make no representation as to the accuracy and completeness of the information contained in this publication. Therefore, we accept no liability for any loss that may arise from the use of such information.
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