capital market
Impressive earnings boost NGX market cap up by N1.8trn in July
By Philemon Adedeji
Transactions at Nigerian Exchange Limited (NGX) closed the month of July 2023 on a positive note as earnings and dividend declaration from quoted companies helped NGX market cap gain N1.814 trillion.
The gain was also supported by insider dealings among companies as directors and related parties consolidated their positions in a show by such investors of their belief in the inherent values of such companies, as well as sustained positive reactions to the ongoing reforms by President Bola Tinubu.
Despite the profit taking, selloffs and FX pressures witnessed within the period, the benchmark NGX All-Share index which opened the trading month at 60,968.27 points, closed at 64,337.52 points, representing a 5.53 per cent growth while year-to-date (YTD) close at 25 per cent in the month under review.
Also, market capitalisation- listed value of equities, rose by N1.814 trillion from N33.197 trillion to N35.011 trillion.
There were also the better-than-expected corporate earnings, higher dividend payouts and relatively improved liquidity as fixed incomes yields were not stable in the face of soaring inflation which supported buying interests in the market and flow of funds into the equity space.
It will be recalled that a total turnover of 2.854 billion shares worth N37.645 billion in 41,547 deals was traded this by investors on the floor of the Exchange last week Friday. The high traded volume and mixed sentiment experienced during the month reflected the buying interests by majority shareholders and activities of institutional investors as they sought to hedge against inflation on mixed outlook for fixed income rates and yields.
This followed the fact that second quarter (Q2) performance of some quoted companies beat inflation rate, raising hopes of better earnings that will support price and payout at the end of the financial year.
Given the outcome of the Monetary Policy Committee meeting in the month under review, the prevailing mixed economic data and as well more corporate earnings now looking up, analysts believe that positive earnings surprises and possible interim dividend declarations from companies would spur increased bargain-hunting activities on the bourse.
They also added that the profit-taking activities on stocks that have experienced substantial appreciation might like be possible.
Analysts at Cordros Research, said “In the medium term, we expect investors’ sentiments to be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed-income market.”
Investors in the Nigerian equities market lost N250 billion at the close of trading on Tuesday.
This followed the dip in the share value of Oando, UPL, Academy, and others on the trading floor today.
After five hours of trading at the capital market, the equity capitalisation crashed to N56.1 trillion from N56.3 trillion posted by the bourse on Monday.
The All-Share Index (ASI) decreased to 99,217.60 from 99,651.67 recorded the previous day.
The market breadth was negative as 26 stocks advanced, 23 declined, while 72 others remained unchanged in 8,511 deals.
Okomuoil, John Holt, and Conhall PLC led other gainers with 10 percent, 9.79 percent and 9.43 percent growth in share price to close at N291.50, N3.14, and N1.74 from the previous N265.00, N2.86, and N1.59 per share.
On the flip side, Oando, UPL, and Academy led other price decliners as they shed 9.75 percent, 9.09 percent, and 8.00 percent each to close at N12.50, N2.50, and N1.84 from the initial N13.85, N2.75, and N2.00 per share.
On the volume index, Transcorp led trading with 47.509 million shares valued at N581 million in 306 deals followed by GTCO which traded 37.853 million shares valued at N1.64 billion in 258 deals.
Veritaskap traded 34.950 million shares valued at N31 million in 173 deals.
On the value index, GTCO recorded the highest value for the day trading stocks worth N1.64 billion in 258 deals followed by MTNN which traded equities worth N598 million in 427 deals.
By Opeyemi Abdulsalam
Femi Otedola, a prominent billionaire businessman, has made a significant move by acquiring additional shares in FBN Holdings.
This development was made public through a corporate filing on the Nigerian Exchange Group (NGX) on Monday.
The acquisition adds 2.22 percent to Otedola’s existing stake in the company, solidifying his position as a major shareholder.
With this latest acquisition, Otedola’s total shareholding in FBN Holdings now stands at 11.63 percent, the highest among all shareholders.
This significant stake cements his influence and control in the company’s decision-making processes.
Overall, this development highlights Otedola’s status as a shrewd businessman and a key player in the Nigerian financial sector.
His significant stake in FBN Holdings is a clear indication of his dedication to the company’s success and his contribution to the growth of the Nigerian economy.
According to the NGX filing, Otedola spent N17.2 billion to 797,946,415 shares at 21.58k.
The latest acquisition comes just four days after the serial investor increased his stakes in the holding company to 9.41 percent after splashing a whooping N18.9 billion to buy a total of 863,180,810 shares.
With that and in addition to the latest purchase, Otedola’s shares (direct and indirect) in FBN Holdings has now leapt to 4,178,409,365 — from 2,517,282,140 shares.
This means the businessman is now the biggest shareholder in the company, displacing Barbican Capital Limited, owned by Oba Otudeko, which has 3,110,400,619 direct shares.
In January, FBN Holdings appointed Otedola as the chairman of its board of directors.
The appointment had come two years after the investor became the firm’s single largest shareholder in December 2021, when he increased his stake to 7.57 percent.
A month after the appointment, FBN Holdings named Barbican Capital Limited as its majority shareholder — making Otedola the second major shareholder at the time.
It was learnt that Otedola spent over N100 billion on FBN Holdings shares in three years.
By Opeyemi Abdulsalam
The Director General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, has called on investors and market intermediaries to embrace sustainable finance, a move that could unlock a potential $2.6 trillion market.
Dr. Agama made the call at the 2024 Business Luncheon of the Association of Corporate Trustee (ACT) in Lagos, themed “Sustainable Finance: The Role of Corporate Trustees.”
Represented by the Director, Market Development of SEC, Tunde Kamali, the DG emphasised the importance of sustainable finance principles in growing the market.
The SEC boss noted that the principles of sustainable finance offer a new vista for market intermediaries, including trustees, to take their businesses and client relationships to a higher level.
He urged businesses to move towards more sustainable and climate-friendly solutions, citing the daunting challenges facing the planet, including climate change, resource scarcity, social inequality, and economic instability.
Dr. Agama emphasised the critical role of corporate trustees in facilitating sustainable financing, acting as intermediaries between investors and issuers, and overseeing assets while ensuring compliance with legal and fiduciary obligations.
He encouraged trustees to align investors’ interests with sustainable objectives by incorporating Environmental, Social, and Governance (ESG) criteria into investment strategies, guiding capital towards projects and initiatives that promote sustainability.
According to Dr. Agama, the demand for sustainable investing is not yet fully met by investment advisors, presenting an opportunity for financial intermediaries to tap into this growing market.
He stressed the collective responsibility of addressing the demands of the sustainability market, positioning ourselves ahead of the green supply curve while adhering to global standards and frameworks.
The SEC DG assured stakeholders of the commission’s commitment to championing sustainable financing, urging them to move beyond traditional roles, especially in sustainable finance.
He pointed out that the potential market size for sustainable finance is staggering, with opportunities for wealth creation alongside environmental and social impact.
The event also featured speeches from the Director-General, Debt Management Office (DMO), Ms. Patience Oniha, and the President of ACT, Omolola Iyinolakan, who emphasised the importance of sustainability and the role of trustees in protecting investors’ interests.
The push for sustainable finance comes as the world grapples with the challenges of climate change, environmental degradation, and social inequality.
The SEC’s call is seen as a step in the right direction, as Nigeria seeks to align its financial sector with global best practices in sustainable finance.
In a related development, a 2023 report by Deloitte highlighted the growing demand for sustainable investing among investors, with many seeking more support from their advisors.
The report noted that investment advisors are not fully meeting this demand, presenting an opportunity for financial intermediaries to tap into this growing market.
The SEC’s commitment to sustainable finance is expected to have a positive impact on the Nigerian financial sector, as stakeholders embrace the opportunities and challenges of this growing market.
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