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Experts highlight market data as critical to navigating shocks in the Capital Market

Equities market recorded negative performance in the first quarter of the year, with the ASI posting a quarterly return of -20.65% in Q1’2020.

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Globally, there is an increasing reliance on market data as a fundamental tool for making sound financial decisions and the Nigerian case is no different.

This was highlighted at The Nigerian Stock Exchange (NSE or The Exchange) 5th Market Data Workshop 2020 hosted in collaboration with InfoWARE Limited.

The event, which held virtually on Friday, 13 November 2020, was themed, “Handling Shocks in the Capital Market: A Quantitative Risk Management Approach Using Market Data.”

Speaking at the event, the Chief Executive Officer, NSE, Mr. Oscar N. Onyema, said, “In Nigeria, the equities market recorded negative performance in the first quarter of the year, with the NSE All Share Index (“ASI”) posting a quarterly return of -20.65 percent in Q1’2020.

However, the market saw an upswing since April 2020, and has so far gained +31.67% as at 12 November. This feat – particularly during the COVID-19 pandemic – can be attributed to smart investors bargain hunting and the release of positive year-end financial results of several listed companies, coupled with improved dividend declarations.

It demonstrates the opportunities that abound in the market for discerning investors, even in a time of crisis, and underscores the importance of quality market data for investment decision-making.”

The first panel session of the event featured Felix Egbon, Group Head, Risk Management, Zenith Bank Plc; Tapa Das, Chief Executive Officer (CEO), NG Clearing Limited; Oladipupo Oyefuga, Head, Risk, Stanbic IBTC Bank; and Dr. Olaoluwa Simon Yaya, Sub Dean, Faculty of Science, University of Ibadan.

This panel session, which was moderated by Olufemi Balogun, Head, Market Services, NSE, highlighted the importance of building financial or investment models that can be tested with real-life situations. Panellists agreed that the unprecedented happenings of 2020 have proven that reliable real-time and historical data that can easily be understood is critical to building these models.

In addressing the topic, Adopting a Data Driven Culture: The Key to Innovation, the second panel session addressed changes in business operations occasioned by the COVID-19 pandemic and how the timeliness, accuracy and availability of data has been critical in shaping how they interact with stakeholders.

The panel session featured Uwa Agbonile, CEO and Chief Software Architect, Infoware Limited; Lilian Olubi, CEO, EFG-Hermes; Saheed Bashir, CEO, Meristem Stockbrokers Limited; Carl Larry, Principal Consultant, Oil Outlooks and Opinions LLC; and was moderated by Dr. Ogho Okiti, Managing Director, BusinessDay Media Limited.

During the workshop, Ms. Anita Gopaldas, Market Data Officer, Market Services, NSE, gave a presentation which highlighted The Exchange’s wide range of reliable, accurate and timely market information services and data solutions across all asset classes and data products to market participants locally and internationally.

Some of these provisions include the NSE API which ensures the dissemination of real-time data to stakeholders; FIX Order Management System which allows trade information to be transmitted from anywhere to The Exchange; and the recently upgraded X-DataPortal, which serves as a consolidated, streamlined platform for market participants to access quality and timely data at an affordable rate.

Other presentations at the workshop were delivered by Olufemi Balogun, Head, Market Services, NSE; Uwa Agbonile, CEO, Infoware Limited; and Benedict Whittam Smith, CEO, Deontic Data.

From their presentations, it was made clear that quality, accessible data is critical not only to dealing with the problems of today, but in mitigating the crises of the future.

Other sponsors of the 2020 NSE Market Data Workshop were Zenith Bank, EFG-Hermes, WCM Capital, Apel Asset Limited, Investor Hangout, Cordros Capital, CSL Stockbrokers, NG Clearing Limited and Meristem.

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STOCK MARKET

Nestle S.A acquires additional shares of Nestle Nigeria worth ₦300 million

Nestlé Nigeria Plc has notified the NSE that Nestle S.A. has acquired 214,924 additional units of its ordinary shares, worth N300.89 million.

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The largest consumer goods company on the Nigerian Stock Exchange (NSE), Nestlé Nigeria Plc, has notified the Exchange that Nestle S.A.- its parent company, has acquired 214,924 additional units of its ordinary shares, worth N300.89 million.

In line with the Nigerian Stock Exchange policy on insider dealing, the formal disclosure was made by the Company’s Secretary, Bode Ayeku.

Mr. Ayeku disclosed that Nestlé S.A acquired the additional 214,924 units of Nestle Nigeria Plc shares in a single transaction, at an average share price of ₦1.400 per share.

This put the total consideration for the shares purchased by the parent company at N300,893,600.00.

What this means

The purchase of the shares of Nestlé Nigeria further cements Nestlé S.A’s position as the majority shareholder of the company.

In line with the information contained in the financial statements of the company as of 30th September 2020, the company had exactly 792,656,252 shares outstanding, with Nestlé S.A being the majority shareholder with 525,537,201 units – 66.30% of the total shares of the company outstanding.

Hence, with the purchase of 214,924 additional units, Nestlé S.A’s ownership percentage of Nestlé Nigeria is now put at 66.33%.

Why this matters

Dealings by insiders of listed companies are corporate actions to be disclosed, as required by the Nigerian Stock Exchange to aid transparency.

What you should know

Nestlé Nigeria’s shares opened the trading session on the Nigerian Stock Exchange today, November 16, 2020, at ₦1450.00 per share. This price, however, is 89.67% higher than its 52-week low of ₦764.90.

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STOCK MARKET

Fidelity Bank non-Executive Director purchases 3.1 million shares

A Non-Executive Director of Fidelity Bank has acquired 3,138,000 additional units of the bank’s shares.

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Fidelity Bank Plc has notified the Nigerian Stock Exchange that Chief Charles Umolu, a Non-Executive Director in the bank, has acquired 3,138,000 additional units of Fidelity Bank shares, worth ₦8.8 million.

In line with the Nigerian Stock Exchange policy on insider dealing, the formal disclosure was made by the Bank’s Secretary, Ezinwa Unuigboje.

According to the disclosure, Chief Umolu acquired the additional 3,138,000 units of Fidelity Bank shares in three transactions, at an average share price of ₦2.8 per share.

This put the total consideration for the shares purchased by the non-executive director by at ₦8,876,740.00.

Fidelity Bank Plc’s shares closed the week at ₦2.89 per share on Friday the 13th of November, 2020. This price, however, is 92.7% higher than its 52-week low of ₦1.50.

Why this matters

Dealings by insiders of listed companies are corporate actions to be disclosed, as required by the Nigerian Stock Exchange. Reporting the trade is part of the transparency required by the Exchange and compliance of the bank.

Trade by insiders, particularly purchases, often demonstrates confidence in the financial performance of the companies that they run.

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STOCK MARKET

Seplat announces exchange rate of N385.78/$1 in payment of its interim dividend

Seplat has announced that an exchange rate of N385.78/$1, will be used to determine its interim dividend.

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Seplat Plc has announced that an exchange rate of N385.78/$1, will be used to determine its interim dividend payment of US$0.05 (United States Five Cents) per share to shareholders whose names appear on its Register of Members as at 13th November 2020.

This disclosure was made in a corporate announcement issued by the company’s Chief Financial Officer, Emeka Onwuka, which was made available on the website of the Nigerian Stock Exchange (NSE).

The management of the company advised in the document that shareholders that hold their shares on the NSE may elect to receive their entire dividend payment in Dollars, while shareholders on the London Stock Exchange (LSE) may elect to receive their entire interim dividend payment in GBP or USD Dollar.

In line with this, the company submitted that the following currency exchange rates would be applicable in the determination of the interim dividend payment to shareholders that qualify for and have elected to receive the Q3 2020 interim dividend payment in Naira or GBP.

Exchange Rate

1 USD = 385.78 Naira
1 USD = 0.7534 GBP

What you should know

However, the exchange rate for the Naira or Pounds Sterling amounts payable was determined by reference to the exchange rates applicable to the US dollar available on 12th November 2020.

The CBN official exchange rate currently stands at N379.5. Further checks revealed that the Naira rate used is the FMDQ benchmark rate for foreign exchange spot operations in the Investors and Exporters FX Window (NAFEX).

What this means

It may be argued that the N385.78/US$ proposed by the company is a fair decision on the NSE shareholders, as the proposed exchange rate by the company, holds a fairly robust premium of N6.78/US$ for the shareholders when compared with the CBN rate of N379/US$ the day the decision was made.

However, when compared with the rate at the parallel market, which had opened and closed at N460/US$ on the day the decision was made – Friday 13th November, one may argue that shareholders would have wanted more in terms of currency conversion.

Viewed from the parallel market exchange rate angle, NSE shareholders may conclude that they lost N74.22 per US$ on the conversion.

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