Investors lose N304bn in one week

The All-Share Index and market capitalisation depreciated by 1.08 per cent to close the week at 51,355.74 as the market capitalisation shed N304bn to close the week at N27.963 tn. The year-to-date returns for investors have now settled at 0.20 per cent.

Similarly, all other indices finished lower with the exception of NGX Main Board, NGX Pension, NGX Insurance, NGX AFR Div. Yield, NGX MERI Growth and NGX Consumer Goods which appreciated by 0.73 per cent, 1.44 per cent, 1.41 per cent, 0.80 per cent, 4.37 per cent and 0.17 per cent respectively while the NGX ASeM, NGX Growth and NGX Sovereign Bond indices closed flat.

However, indigenous conglomerate, Transcorp Corporation Plc, led the gainers’ chart of the Nigerian Exchange Limited in the last week as its share price appreciated by 44.97 per cent to close trading at N2.45, following the acquisition of over five per cent stake in the group by billionaire businessman, Femi Otedola.

During the past week, a total of 3.920 billion shares worth N15.620bn were traded in 16,856 deals by investors on the floor of the Exchange, in contrast to a total of 2.824 billion shares valued at N10.964bn that exchanged hands the previous week in 15,686 deals.

The Conglomerates Industry (measured by volume) led the activity chart with 3.050 billion shares valued at N5.964bn traded in 1,379 deals; contributing 77.81 per cent and 38.18 per cent to the total equity turnover volume and value respectively.
The Financial Services Industry followed with 707.962 million shares worth N6.175bn in 8,430 deals. The third place was the Consumer Goods Industry, with a turnover of 43.155 million shares worth N1.026bn in 2,223 deals.

Trading in the top three equities namely Transnational Corporation Plc, Access Holdings Plc and Fidelity Bank Plc (measured by volume) accounted for 3.302 billion shares worth N7.999bn in 2,375 deals, contributing 84.23 per cent and 51.21 per cent to the total equity turnover volume and value respectively.

During the four-day trading week, 35 equities appreciated in price during the week higher than 18 equities in the previous week.

Thirty-one equities depreciated in price lower than 39 in the previous week, while 90 equities remained unchanged, lower than 99 equities recorded in the previous week.

Otedola confirms acquisition of stakes in Transcorp

Billionaire businessman, Femi Otedola, has confirmed the acquisition of shares in the indigenous conglomerate, Transcorp Corporation Plc.

In a tweet on his Twitter handle on Monday, Otedola expressed a desire to work with the management of the corporation to realise its potential.

“Following this acquisition, I look forward to working with the board and management of Transcorp to realise the amazing future potential of the corporation …F.Ote,” he said.

In a corporate notice filed last week with the Nigerian Exchange Limited, Transcorp had disclosed that Otedola bought 2,245,639,251 units of the shares of the group, which amounts to a 5.52 per cent stake.

In the notice filed signed by the Company Secretary, ‘Funmi Olofintuyi, with the NGX on Thursday, Transcorp said that it welcomes the investment.

“As noted in our previous communication, the Company welcomes this expression of confidence in its leadership and management as we continue our unwavering commitment to superior stakeholders’ returns, anchored in our ideology of Africapitalism. Rest assured of our commitment to remain resolute in executing our Group’s strategy of making strategic investments in key sectors within the Nigerian economy, our transformation agenda and our ability to contribute positively towards building prosperity for all,” the statement partly read.

Over the weekend, there were also reports that Otedola had acquired more shares in the conglomerate, bumping his stakes to over six per cent.

Meanwhile, some shareholder groups have hailed the acquisition of shares in Transcorp by Otedola. They also advised the business mogul to work with the existing shareholders to move the conglomerate forward.

Currency in circulation rises by 71% to N1.6tn – CBN

The currency in circulation in the country jumped by N701.4tn in one month to hit N1.6tn in March, 2023 after the Central Bank of Nigeria reversed its policy on the naira redesign.

According to the CBN, currency-in-circulation is defined as currency outside the vaults of the central bank; that is, all legal tender currencies in the hands of the public and in the vaults of the Deposit Money Banks.

The currency in circulation in the country had dipped by a 235.03 per cent to N982.09bn at the end of February from N3.29tn at the end of October 2022, on the back of the naira redesign policy of the CBN.

Figures obtained from the CBN revealed that N2.3tn was mopped up from circulation during the period under review.

In a report by a research firm, Augusto&Co, titled ‘Redesign gone wrong? – Costly cashless’, while the policy was still on, it stated that, “How does the Central Bank retrieve 84.5 per cent of a country’s currency in circulation in just 90 days?

“This was one of the many questions seemingly begging for answers when Nigeria’s apex bank announced its plan to redesign the three higher value notes of the naira (N200, N500 and N1,000) on 25 October2022.”

A performance appraisal of the CBN’s execution of the redesign project would range from grossly unprepared to poorly perceived, it stated.

Speaking on the consequences during the implementation, Augusto&Co said, “Public outrage has degenerated to violent protests in some cities, with incidents of vandalism of several banks’ facilities – and PoS outlets.

“The cash crunch and the uncertainty surrounding the policy are fanning a long-simmering fire of public resentment, triggered by deteriorating economic conditions and recently exacerbated by unending petrol shortages.”

The hardest hit by the policy had been the most vulnerable members of the population (the poor, the unbanked and the rural dwellers), the report added.

It would be recalled that the Governor of the CBN, Godwin Emefiele, had in October 2022, announced plans to redesign the old N200, N500 and N1,000 notes.

The governor decried the challenges associated with currency management, including the hoarding of banknotes by members of the public, with statistics showing that over 80 per cent of currency-in-circulation was outside the vaults of commercial banks.

Due to hardships the policy subjected Nigerians to among others, some state governments sued the Federal Government over the naira redesign policy; the Supreme Court in its ruling on March 3 extended the legal tender status of the old N200, N500, and N1,000 notes to December 31.

Ten days after the Supreme Court judgement, the CBN officially ordered commercial banks to comply with the court verdict.


Union Homes Acquisition: ASO Savings Shareholders Give Management Clean Bill of Health

Shareholders of ASO Savings and Loans Plc have given the Management of the Mortgage Bank a clean bill of health on the way it handles the acquisition of Union Homes Savings & Loans Plc, insisting that contrary to the claims in certain quarters, the transaction followed all due processes to the satisfaction of all stakeholders.

Following the Central Bank of Nigeria (CBN) directive to Banks to divest its ownership of Subsidiaries in the non-core banking sector, Union Bank Plc had put out Union Homes for acquisition.

ASO Savings emerged as the successful bidder, acquiring 92 per cent ownership stake in Union Homes, through its Investment Vehicle, UH Investment Nig Ltd, with the payment of N5 Billion capital deposit to the CBN.

Following the successful acquisition of Union Homes, the Management of ASO Savings immediately commenced the integration process, which is aimed at merging the acquired Union Homes with ASO Savings to form one corporate entity.

This integration process, which requires ASO Savings to take over the actual management of the affairs of Union Homes by ASO Savings’ representatives drawn from its Board and Management, received the regulators’ and CBN’s approval.

To ensure a seamless integration process, the Executives of ASO Savings took charge of the day to day management of the newly acquired entity.

In an Advertorial, ASO Savings’ Shareholders noted that the integration process was widely accepted by Union Homes staff, enabling ASO to commence the task of resuscitating the ailing firm and ultimately bringing it to profitability.

The ASO Shareholders are, however, disappointed by the activities of some staff who have continued to throw spanner in the works.

The shareholders in the advertorial said: “A few members of Staff, masquerading as Staff Union members, had, for their selfish motives, sought to frustrate the integration process, using threats, extortion and blackmail.”

The shareholders noted further: “The inordinate demands of such group of Staff include, amongst others, a demand for payment of the sum of N1 Million to each member of the group, with a threat to disrupt the integration process and make damaging publications amongst other threats against ASO and its Executives if the demands are not met.”

Stock Market Depreciates by N857bn in March Amid Political Tension

The market capitalisation of the Nigerian Exchange (NGX) depreciated by N857billion in March 2023 amid political tension, inflationary pressure and scarcity of local currency in the domestic economy.

Nigerians on February 25 and March 18, 2023 went to the polls to decide the leadership of their country, leading to foreign investors exit in some fundamental stocks on the Exchange.

Also, inflation rate, according to National Bureau of Statistics (NBS) increased to 21.91 per cent in February 2023 from 21.82 per cent reported in January and it impacted on investors return on investment in the stock market

Although the stock market in first quarter gained N2.44 trillion in market capitalisation to close on March 31, 2023 at N29.544 trillion from N27.915 trillion at which it opened for trading activities on January 3, 2023, its performance in March dropped by N857billion from N30.401trillion to N29.544trillion it closed for trading.

The overall market performance measure NGX All-Share Index, which tracks the general market movement of all listed equities on the Exchange, rose by 5.11 per cent to close at 54,232.34 basis points in Q1 2023 from 51,595.66 basis points it closed on December 30, 2022.

NGX ASI in the month of March dropped by 2.82 per cent to 54,232.34 basis points from 55,806.26basis points.

The decline was influenced by investors profit-taking in Airtel Africa Plc, MTN Nigeria Communications Plc, and Dangote Cement Plc.

The stock price of Airtel Africa dropped to N1,479.00 per share, a decline of 8.7 per cent from N1,620.00 per share it opened for trading in March while Dangote Cement show its stock price closing March at N270 per share, representing a decline of 2.9 per cent from N278 per share it opened for trading.

The stock price of MTN Nigeria Communication moved to N240.00 per share in March from N245.00 per share it closed in February 2023, representing a decline of 2.04 per cent.

Amid controversies, the stock price of Seplat Petroleum dropped by 13.2 per cent to N1,150.00per share in March from N1,325.00 it closed for trading in February 2023.

However, the sector performance in Q1 2023 was bullish as most indices closed the period on uptrend as at March 31, 2023. NGX Consumer Goods index appreciated the most by 19.32 per cent. NGX Premium Board index followed with a gain of 11.97 per cent, while NGX Oil & Gas index rose by 10.45 per cent.

Others are NGX Lotus II index, NGX Banking index, NGX Pension index, NGX 30, NGX Industrial Goods index and NGX Insurance went up by 8.79 per cent, 8.50 per cent, 6.35 per cent, 4.93 per cent, 2.21 per cent and 1.81 per cent in that order.

Financial analysts noted that the positive sentiment during the period was as a result of change in the holding structure of the market since foreign investors left the market on the grounds of COVID-19 and local investors dominated with increased buying interest due to the better-than-expected corporate earnings post-COVID and higher dividend payouts.