Dividends Declaration, First Quarter Earnings Lift Equities Market

0

Goddy Egene

The stock market pared losses of many weeks as the Nigerian Stock Exchange (NSE) All-Share Index rose by 1.78 per cent to close at 30,086.31 last week, compared with a decline of 0.19 per cent the previous week. 

Similarly, market capitalisation appreciated by same margin to close higher at N11.301 trillion. In the same vein, all other indices finished higher with the exception of the NSE Oil/Gas Index that depreciated by 2.12 per cent.

Market analysts said the recovery in the market could partially be attributed to investors’ reaction to the financial results declared by some companies which included dividends recommendation.

FBN Holdings Plc announced a dividend of 26 kobo for the year ended December 31, 2018, while Nigerian Aviation Handling Company Plc recommended a dividend of 25 kobo for the 2018 financial year. AIICO Insurance Plc declared a dividend of three kobo, while Prestige Assurance Plc and Regency Alliance Insurance Plc recommended a dividend of three kobo apiece.

FBN Holdings Plc’s results witnessed an improvement, showing a profit after tax (PAT) of N59.667 billion, which is a jump of  58 per cent compared with N37.708 billion posted in 2017.

A breakdown of the audited results showed that FBN Holdings recorded gross earnings of N583.477 billion, indicating a marginal decline from N595.446 billion recorded in 2017.  Net interest income reduced from N332 billion to N284.168 billion, while impairment charges declined by 43 per cent from N150.424 billion to N86.911 billion.

In terms of first quarter (Q1) results, Access Bank Plc posted PAT of 86 per cent in 2019. Details of the results showed that net interest income rose to N56.838 billion, from N44.653 billion, while net fee and commission income stood at N13.068 billion as against N13.923 billion in 2018. Net impairment charges fell from N4.961 billion to N3.375 billion in 2019. The financial institution also reduced its personal expenses from N12.290 billion to N12.786 billion. PAT grew   by 86 per cent from N22.116 billion in 2018 to N41.147 billion in 2019.

Commenting on the results, Group Managing Director/ Chief Executive Officer of Access Bank Plc, Mr. Herbert Wigwe said: “The group delivered solid earnings underscoring the value potentials of the newly expanded business model. Gross earnings showed a 16 per cent increase to N160.1bn from the prior year, comprising strong earnings on interest income and non-interest income of 69 per cent and 31 per cent respectively, whilst Profit before Tax (PBT) grew  to N45.1 billion.

Similarly, Guaranty Trust Bank Plc’s PAT rose 10.37 per cent from N44.67 billion in 2018 to N49.302 billion in 2019.  Customers’ deposits also rose by 6.0 per cent to N2.41 trillion in March 2019 from N2.274trillion in December 2018, whilst the bank’s loan book grew by 1.6 per cent from N1.262trillion as at December 2018 toN1.282trillion in March 2019. Its balance sheet remained strong with the bank closing the quarter with total assets of N3.556 trillion and shareholders’ funds of N627.2 billion. In terms of assets quality, non-performing loan (NPL) ratio and Cost of Risk closed 7.03 per cent and 0.05 per cent in March 2019 from 7.30 per cent and 0.34 per cent in December 2018 respectively.

According to  the Managing Director/CEO of GTBank Plc, Mr Segun Agbaje, “Going into 2019, we knew that it would be a challenging year, but our strategy and unwavering focus on delivering value for our customers and shareholders continues to underpin our ability to consistently deliver solid results despite changing market variables. We carried on the momentum of the previous year, posting strong growth in earnings, effectively managing costs and leveraging our digital-first customer-centric strategy to deliver world-class services that are simple, cheap and easily accessible.”

On its part, Zenith Bank Plc  announced gross earnings of N158.1 billion in Q1 of 2019, down seven per cent from N169.2 billion in the corresponding period of 2018. However, net interest income rose 23 per cent from N69.997 billion to N86.137 billion in 2019. The bank reduced its operating expenses by four per cent from N61.701 billion to N59.404 billion. PAT rose seven per cent to N50.2 billion, compared with N47.79 billion in 2018.

According to bank, the growth in net interest income and operating income by 23 per cent and one per cent respectively mitigated the decline in gross earnings. It noted that the effective management of cost-to-income ratio, cost of funds and cost of risk offset top-line declines to deliver an enhanced operating income in the period.

“Our risk and asset quality continues to improve as cost of risk dropped significantly by 52 per cent from 0.9 per cent in the prior year to 0.4 per cent for the period. This was achieved as impairment charges declined by 54 per cent(N2.5billion year on year reduction). Our cost of funds also improved, declining by 25 per cent from four per cent  Q1 2018 to  three per cent  Q1 2019. This was supported by a 22 per cent decrease in interest expense of N10billion over the same period, affirming the Group’s robust treasury and liquidity management. Our prudent cost management led to a five per cent decline in our cost-to-income ratio by  five  per cent from 53.3 per cent  in 2018 to 50.9 per cent in the period with an absolute reduction in operating expenses by N2.3 billion year-on-year,” the bank explained.

Market Turnover

Meanwhile, a total turnover of 988.692 million shares worth N11.432. billion in 13,596 deals were traded last week by investors down from 1.770 billion shares valued at N15.264 billion that exchanged hands the previous week in 17,015 deals.   The market opened for four trading days last week as the Federal Government of Nigeria declared Friday 19th April 2019 (Good Friday) and Monday 22nd April 2019 (Easter Monday) Public Holidays to mark the end of the End of the Lenten season and Easter celebrations.

The Financial Services Industry led the activity chart with 766.191 million shares valued at N7.261 billion traded in 7,820 deals, thus contributing 77.50 per cent and 63.51 per cent to the total equity turnover volume and value respectively. The ICT Industry followed with 74.769 million shares worth N24.600 million in 212 deals. The third place was Consumer Goods Industry with a turnover of 48.022 million shares worth N3.095 billion in 2,374 deals.    Trading in the top three equities namely, Union Bank of Nigeria Plc, Access Bank Plc and Guaranty Trust Bank Plc   accounted for 355.043 million shares worth N4.845 billion in 2,133 deals, contributing 35.91 per cent and 42.38 per cent to the total equity turnover volume and value respectively.

 There was no Exchange Traded Products (ETPs) traded during the week compared with a total of 13,740 units valued at N215,010 that was transacted the previous week in two deals.  A total of 14,246 units of Federal Government Bonds valued at N14.980 million were traded last week in 17 deals compared with a total of 787,527 units valued at N795 million transacted   the preceding week in 26 deals.

Price Gainers and Losers

The price movement chart showed that 33 equities appreciated in price during the week, lower than 35 in the previous week, 33 equities depreciated in price, higher than the 31 equities of the previous week. Chams Plc led the price gainers with 28.5 per cent, trailed by First Aluminium Nigeria Plc with 28.1 per cent. Dangote Flour Mills Plc with 27.3 per cent, just as Access Bank Plc and AIICO Insurance Plc garnered 15.1 per cent and 10.2 per cent in that order.

Other top price gainers are:  The Initiates Plc (9.5 per cent); Livestock Feeds Plc (9.0 per cent); Cadbury Nigeria Plc (8.9 per cent); Nestle Nigeria Plc (8.5 per cent); and Consolidated Hallmark Insurance Plc (8.3 per cent).

Conversely, Associated Bus Company Plc led the price losers with 17.5 per cent, trailed by Royal Exchange Plc with 12.0 per cent. C & I Leasing Plc shed 9.8 per cent. A.G Leventis Nigeria Plc, shed   9.8 per cent and 9.6 per cent apiece.

UACN Property Development Company Plc, John Holt Plc and Vitafoam Nigeria Plc went down by 9.6 per cent apiece.  Julius Berger Nigeria Plc and Niger Insurance Plc depreciated by 9.0 per cent each.