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MTN Nigeria records gain, investors profit up by N42 billion

REDSTAREX led 9 Gainers as against 17 Losers topped by UBN at the end of today’s session.

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Nigerian bourse on Tuesday closed its trading session on an impressive note. The All Share Index gained by +0.31% to close at 25,574.35 points as against +0.01% appreciation recorded on Monday.

  • Its Year-to-Date (YTD) returns currently stands at -4.42%. Nigerian Stock Exchange capitalization presently stands at N13.408 trillion.
  • Investors gained N42.09 Billion.
  • Nigerian bourse trading turnover printed positive as Nigerian Stock Market trading moved and gained 33.61% as against +1.36% uptick recorded on Monday.
  • ZENITHBANK, FBNH, and TRANSCORP were the most active to boost market turnover.
    Market breadth ended negative as REDSTAREX led 9 Gainers as against 17 Losers topped by UBN at the end of today’s session – an unimproved performance when compared with the previous outlook.

Top gainers

  • REDSTAREX up 9.80% to close at N3.25
  • TRANSEXPR up 9.33% to close at N0.82
  • MTNN up 2.41% to close at N123
  • FBNH up 2.04% to close at N5
  • DANGSUGAR up 0.83% to close at N12.1

Top losers

  • UBN down 6.54% to close at N5
  • INTBREW down 2.94% to close at N3.3
  • UACN down 1.56% to close at N6.3
  • PRESCO down 0.80% to close at N49.5
  • DANGCEM down 0.22% to close at N134.7

Outlook

Nigerian bourse unsurprisingly ended higher amid rising oil prices and high buying pressures noticed in NSE30 stocks like Dangote Sugar, First Bank, and MTN Nigeria.

  • Market liquidity was notably higher as institutional investors increased their stakes on decent stock brands.
  • In spite of the sell-offs in global markets, and the dollar strengthening upward, as Local investors are taking advantage of undervalued stocks across the spectrum
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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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