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Investors embrace Nigerian stocks, with portfolio investment rising by N40.5 billion

Domestic transactions accounted for 70.33% while foreign transactions accounted for 29.67% of the total transactions.

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The Nigerian Stock Exchange appears to be gaining significant traction as total portfolio investments rose by N40.5 billion in September 2020.

This was contained in the domestic and foreign investments report released by the Nigerian Stock Exchange (NSE).

According to the report, the total portfolio investments rose by 42.9% compared to 94.45 billion recorded in August 2020. The breakdown of the report shows that domestic transactions accounted for 70.33% of the total transactions, while foreign transactions accounted for 29.67% of the total transactions in September.

Key highlights

  • Total domestic transactions completed year to date (YTD) is about N825.94 billion, while foreign transactions completed YTD is about N510.25 billion.
  • Foreign inflows decreased by 71.67% since the last rise in September 2019, while Foreign Outflows decreased by 70.31% since the last rise in March 2020.
  • The total value of transactions completed by Domestic Investors in September 2020 surpassed that of the total value of transactions completed by Foreign Investors by N54.87 billion.
  • Portfolio investments increased sharply by 42.9% from N94.45 billion (about $244.27 million) in August 2020 to N134.97 billion (about $349.85million) in September 2020.
  • Compared with September 2019 (N141.45 billion), the performance of the current month indicates that total transactions decreased by 4.58%.

As illustrated in the chart, total transactions completed between August and September 2020 indicated that total domestic transactions surged by 71.12% from N55.47 billion in August to N94.92 billion in September.

Also, total foreign transactions increased by 2.74% in September 2020 from N38.98 billion (about $100.81 million) in August 2020 to N40.05 billion (about $103.81million) in September 2020.

Meanwhile, for domestic transactions, analysis revealed that Institutional Investors outperformed Retail Investors by N23.54 billion.

A comparison of domestic transactions in the current and prior month (August 2020), revealed that both retail and institutional transactions increased by 34.12% from N26.61 billion in August 2020 to N35.69 billion in September 2020, and 105.23% from N28.86 billion in August 2020 to N59.23 billion in September 2020 respectively.

For foreign transactions, analysis revealed that Foreign Outflow outperformed Foreign Inflow by N12.05 billion. A comparison of foreign transactions in the current and prior month (August 2020) revealed that Foreign Inflow declined by 20.72% from N17.66 to N14 billion, while Foreign Outflow increased by 22.19% from N21.32 to N26.05 billion.

What you should know

  • Over a 6-year period, based on the data available on the NSE, analysis indicated that total domestic transactions decreased by 67.94% from N296.06 billion in September 2014 to 94.92 billion in September 2020; while total foreign transactions decreased by 82.33% from N226.68 billion in September 2014 to N40.05 billion in September 2020.
  • Total domestic transactions accounted for 70.33% of the total transactions carried out in September 2020, while foreign transactions accounted for 29.67% of the total transactions in the same period.

What this means

Considering the importance of foreign investment, the decline is particularly alarming and could indicate that foreign investors are shying away from Nigerian stocks. Meanwhile, more Nigerian investors are venturing into the market compared to previous months.

However, the encouraging factor is that total foreign and domestic portfolio figure recorded in September is the highest since the dip in March. This may well mean that stocks are beginning to pick up, which is good news for stock investors.

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STOCK MARKET

Nigeria’s stock market soars amid plunge in CWG and IKEJAHOTEL

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Nigeria’s stock exchange market ended today’s trading session bullish, posting a profit at the end of the trading session. The All-Share Index increased by +0.18% to close at 38,482.52.

• The Nigerian Stock Exchange market value currently stands at N20.3Trillion. Its Year-to-Date (YTD) returns currently stands at -4.44%.
• The market breadth closed positive today as UPL led 15 Gainers, and 20 Losers were topped by CWG at the end of the session showing a consolidation as movement is not certain.

Top gainers

1. UPL up +9.38% to close at N1.40
2. REGALINS up +8.16% to close at N0.53
3. VERITASKAP up +5.00% to close at N0.21
4. CHIPLC up +4.17% to close at N0.75
5. ROYALEX up +3.90% to close at N0.80

Top losers

1. CWG down -9.66% to close at N1.87
2. IKEJAHOTEL down -9.09% to close at N1.00
3. NASCON down -8.78% to close at N13.50
4. JOHNHOLT down -8.62% to close at N0.53
5. LINKASSURE down -8.33% to close at N0.55

Outlook

• Market sentiments trend towards the bulls as 15 gainers outweighed 20 losers.

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STOCK MARKET

Custodian Investment declares final dividend of N2.65 billion to shareholders

Custodian Investment Plc has announced the payment of a final dividend of 45 kobo for every share of 50 kobo held by shareholders.

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The Board of Directors of Custodian Investment Plc has announced the payment of a final dividend of 45 kobo for every share of 50 kobo held by shareholders, making a total of N2.65 billion to be paid to shareholders for the year ended 2020.

This is according to a disclosure signed by the company’s secretary, Adeyinka Jafojo, which was sent to the Nigerian Stock Exchange.

According to the notification, the accrued final dividend will be disbursed electronically to qualified shareholders on the 22nd of April, 2021, subject to appropriate withholding tax and approval from the Annual General Meeting scheduled the same day.

It is also worth noting that the company had paid an interim dividend of 10kobo for the half-year period of 2020.

What you should know

The qualifying conditions for payment on the aforementioned date are;

  • Only shareholders, whose names appear in the register of members as at close of business on 9th of April, 2021 will be considered for payment.
  • Shareholders must have completed the E-Dividend registration.
  • Shareholders must have mandated the Registrar (Meristem Registrars and Probate Service Limited) to pay their dividends directly into their bank accounts.
  • Custodian Investment Plc has total shares outstanding of 5,881,864,195 and currently trading at N6.
  • A total dividend of 55 kobo has been thus declared for FY 2020 (45 kobo+10 kobo interim).

In lieu of this, the register of members will be closed from 12th-16th of April 2021 (both dates inclusive).

Drivers

Custodian Investment Plc had recently posted an impressive financial performance, evident by a surge in key financial metrics for the year ended 2020. For example, it recorded the following;

  • Profit after tax of N12.69 billion for the year (+111% YoY).
  • Profit Before Tax of N13.69 billion. (+69.6% YoY)
  • Earnings per share N194 vs N97. (+111.04% YoY)
  • Retained Earnings of N25.38 billion (+9.7% YoY).
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STOCK MARKET

NB Plc to pay N5.52 billion dividend, says shareholders can receive new shares

The board of Nigerian Breweries Plc has proposed N5.52 billion as dividend to shareholders for 2020.

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Nigerian Breweries Plc is set to reward shareholders of the company with N5.52 billion as dividend for the period ended 31st December 2020.

This is in line with the Board’s recommendation as the dividend is subject to the deduction of the appropriate withholding tax, and approval by shareholders of the company at the Annual General Meeting slated for 22nd of April 2021.

According to the notification issued by the Company Secretary, Uaboi G. Agbebaku, at the close of trading activities, the dividend declared by Nigerian Breweries on a per-share basis was pegged at 69 kobo per share. This puts the total dividend to be paid to shareholders at N5,517,862,415.19.

Shareholders can opt to receive new shares of the company

The Board of the Company however provided shareholders with the option to receive new shares of Nigerian Breweries, as Qualifying Shareholders have the right of election to receive new ordinary shares in the company instead of the final dividend in cash. This election is required to be made on or before the 10th of April, 2021.

In view of this, the Reference Share Price for the purpose of determining the number of shares due to Qualifying Shareholders who elect for the share option will be a ten-day trading average of the Company’s share price on the floor of The Nigerian Stock Exchange, starting on the 11th of March, 2021.

What you should know

  • It is important to note that the dividend declared is subject to appropriate withholding tax and the approval of shareholders at the Brewer’s next Annual General Meeting.
  • Qualifying Shareholders: The dividend will be paid to shareholders whose names appear in the Register of Members as at the close of business on the 10th of March, 2021.
  • Payment Date: On the 23rd of April, 2021, the dividends will be paid electronically to Qualifying Shareholders
  • To qualify for the dividend payment: Shareholders who are yet to complete the e-dividend registration are advised to download the Registrar’s E-Dividend mandate Activation Form, which is available at, complete same and submit to the Registrar of their respective Banks.
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