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Inflation pushes Stock Market down by N655bn; Naira exchanges N441.25 to Dollar

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Equity Market Extends Gains by N63bn; Geregu, SCOA Lead Laggards’ Table

The market capitalisation of the Nigerian Exchange Ltd (NGX) dropped by N655 billion, following the hike in the nation’s inflation rate to 20.77 per cent.

The newsmen report that the National Bureau of Statistics (NBS) on Monday announced the inflation rate for September, standing at 20.77 per cent as against 20.5 per cent in August.

Also read: NGX: Market declines by N4bn; Naira depreciates to N441.83 to Dollar

The market capitalisation lost N656 billion or 2.53 per cent to close at N25.254 trillion from N25.909 trillion recorded on Friday.

Similarly, the All Share Index (ASI) decreased by 1,203.09 basis points or 2.53 per cent to close at 46,365.95 basis points compared with 47, 569.04 posted on Friday.

The downturn was impacted by losses recorded in Airtel Africa Plc.

Similarly, the stock market’s weak performance was driven by selloffs in Airtel Africa, depreciating by 10 per cent.

Analysts at United Capital Plc said bargain hunting would continue as investors looked forward to the third quarter ended September, thus cherry-picking stocks with great underlying fundamentals.

“However, we maintain that the broader equities market will remain in a lull pending the release of Q3, 2022 results,” United Capital said.

However, market breadth closed positive, with 14 gainers versus five losers. PZ Cussons Nigeria recorded the highest price gain of 9.52 per cent to close at N9.20, per share.

University Press followed with a gain 9.33 per cent to close at N1.64, while Courteville Business Solutions appreciated by 4.35 per cent to close at 48 kobos, per share.

Cutix went up by 3.50 per cent to close at N2.07, while Wapic Insurance appreciated by 2.86 per cent to close at 36 kobo,  per share.

On the other hand, Airtel Africa led the losers’ chart by 10 per cent to close at N1,620.00, per share.

Sovereign Trust Insurance followed with a decline of 7.14 per cent to close at 26 kobos, while AIICO Insurance went down by 7.02 to close at 53 kobos, per share.

Dangote Sugar Refinery lost 2.80 per cent to close at N15.60, while Fidson Healthcare shed 2.51 per cent to close at N8.94, per share.

The total volume traded rose by 10.89 per cent to 137.983 million shares, worth N4.317 billion, and traded in 3,234 deals.

Transactions in the shares of Guaranty Trust Holding Company (GTCO) topped the activity chart with 33.715 million shares valued at N609.863 million.

Courteville Business Solutions followed with 26.138 million shares worth N12.545 million, while Fidelity Bank traded 19.980 million shares valued at N69.022 million.

Sterling Bank traded 8.930 million shares valued at N13.767 million, while United Bank for Africa (UBA) transacted 6.526 million shares worth N45 million.

In another development, the Naira on Monday appreciated slightly against the dollar at the Investors and Exporters window, exchanging at N441.25.

The figure represented an increase of 0.03 per cent compared with the N441.38 it exchanged for the dollar before the close of business on Oct. 14.

The open indicative rate closed at N439.63 to the dollar on Monday.

An exchange rate of N442.50 to the dollar was the highest rate recorded within the day’s trading before it settled at N441.25.

The Naira sold for as low as N425 to the dollar within the day’s trading.

A total of 46.21 million was traded in foreign exchange at the official investors and exporters window on Monday.

 

 

Economy

FG Threatens To Open Borders for Cement Importation Over Price Hike

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Palpable fear has gripped cement manufacturers following the Federal Government’s threat to throw open the nation’s borders for cement importation if the product manufacturers fail to bring down the cost.

The Minister of Housing and Urban Development, Mr Ahmed Dangiwa issued the threat on Tuesday in Abuja at a meeting with Cement and Building Materials Manufacturers.

The meeting was summoned to address the astronomical increase in the cost of cement nationwide.

The minister expressed concerns that in the past couple of months, the country had witnessed a recurring alarming increase in the prices of cement and other building materials.

“Clearly, this is a crisis for housing delivery. An increase in essential building materials means an increase in the prices of houses.

“We are not the only country facing this challenges, many countries are facing the same type of challenges that we’re facing, some even worse than that.

“But, as patriotic citizens, we have to rally round the country when there is crisis, to ensure that we do our best to save the situation,” he said.

The minister added: “Honestly speaking, we have to sit down and look at this critically and know how you should go back and think of it.

“The government stopped importation of cement in other to empower you to produce more and sell cheaper

Bags of cement

“Otherwise the government can open the borders for mass importation of cement, the price will crash, but you will have no business to do”.

Dangiwa said the reasons given by cement manufacturers for the price increase – high cost of gas and manufacturing equipment – were not enough for such astronomical pricing.

He expressed his displeasure at the position of  Cement Manufacturer Association of Nigeria (CEMAN) that the association “does not interfer with the pricing of cement”.

He said the association should not just fold  its arms when things were going wrong.

“One person cannot be selling at N3500 per bag and another selling at N7000 per bag and you cannot call them to order.

“The association is expected to monitor price control, otherwise the association has no need to exist,” he said.

Earlier, Mr Salako James, Executive Secretary, CEMAN, said the housing policy of the administration of President Bola  Tinubu was laudable and every responsible Nigerian has to key into it.

He, however, identified some areas of concern and appealed to the government to look into them to tackle the issue of cement pricing.

Salako identified the challenges of gas supply to heavy users like the cement industry and urged the government to create a window whereby gas will be bought with Naira instead of dollar.

He also complained about the distribution channel, stressing tha there was a great difference between the price from the manufacturers and the market price.

He, therefore called for government intervention to help stabilise the situation and bring sanity to the economy.

At the end of the meeting, the minister directed that a committee should be constituted to review the situation and come out with implementable resolutions that would benefit the common Nigerian.

The three major cement producers, Dangote Plc, BUA Plc, and Lafarge Plc were represented as well as other industry stakeholders.

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Economy

Cement Price Can Be Lower Than FG, Manufacturers’ Projection — Association 

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…Warns that high price could lead to corner-cutting and building collapse

The National Association of Block Moulders of Nigeria (NABMON) says the agreement between the Federal Government and three major cement manufacturers that a 50kg bag of cement, for now, is not supposed to sell for more than N7,000 to N8,000 is faulty.

The National President, Mr Adesegun Banjoko, said this on Tuesday in Lagos.

Recall that the parties, at a meeting on Monday, said that the ideal price of  a 50kg bag of cement for now should be between ₦7,000.00 and ₦8,000.00 depending on location.

They agreed that the current higher prices of cement in parts of the country were abnormal.

The main manufacturers of cement in the country are Dangote Plc, BUA Plc and Lafarge Plc.

According to Banjoko, there is no reason for the price of cement to be sold even at the projected prices, since limestone, which is a key ingredient, is readily available in Nigeria.

He expressed fears that the high price would lead to corner-cutting and building collapse.

The NABMON president expressed the belief that the government and manufacturers could do better and offer lower prices.

Bags of cements

He suggested a reduction or elimination of customs duties on other imported materials used in cement production, adding that this would incentivise manufacturers to lower their prices.

He, therefore, proposed a target price of ₦3,500 to ₦5,000 per bag.

Banjoko said, “There are three issues that make me disagree with the government and the main manufacturers.

“First, limestone is sourced in Nigeria; agreed they have some few other materials they bring in from abroad.

“But if the government is really concerned about life and property lost to building collapse, they should either remove custom duties on such items or reduce them by half to encourage the manufacturers to come down to between N3, 500 and N5, 000.”

He also advised the government to temporarily halt road construction projects that use cement.

Banjoko said that this would free up available cement for vital projects and potentially reduce demand, leading to lower prices.

The NABMON president warned that the high price of cement had added to the existing tensions in the country.

He urged the government to act cautiously with essential commodities like cement, emphasising its impact on public well-being.

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Economy

NGX: Bullish Sentiment Persists, Investors Gain N329bn

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Stock Market Gains N18bn; FTN Cocoa Processors, Prestige Assurance lead Losers’ Chart 

…Unilever Nigeria Plc, Julius Berger lead Losers’ table 

Bullish sentiment persisted on Thursday at the Nigerian Exchange Ltd. (NGX) equity market, as the market indices rose by 0.58 percent.

Specifically, investors gained N329 billion or 0.58 percent, as the market capitalisation closed at N56.961 trillion, as against N56.632 trillion recorded on Wednesday.

The All-Share Index also appreciated by 0.58 percent or 601.72 points to settle at 104,100, compared to 103,498.28 posted in the previous session.

As a result, the Year-To-Date (YTD) return rose to 39.22 percent.

Continuous buy interests in the shares of BUA Cement, BUAFoods, and Geregu kept the market in the positive terrain.

A total of 284.49 million shares valued at N6.91 billion were exchanged in 8,168 deals, as against 426.86 million shares valued at N12.11 billion exchanged in 8,654 deals.

However, analysis of the market activities showed trade turnover settled lower relative to the previous session, with the value of transactions down by 42.89 percent.

Guaranty Trust Holding Company(GTCO) led the activity table in volume and value with the trade of 56.61 million shares worth N2.22 billion.

Transcorp followed with 33.17 million shares valued at N418.31 million, while United Bank of Africa(UBA) traded 18.38 million shares worth N442.96 million.

Also, Mutual Benefits Assurance sold 16.76 shares valued at N11.48 million and AXA Mansard traded 12.51 million shares worth N75.57 million.

On the gainers’ table, University Press Ltd.(UPL) led in percentage terms of 9.96 percent to close at N2.87, followed by Juli Plc by 9.84 percent to close at N1.34 per share.

Mutual Benefits gained 9.38 percent to close at 70k, Daar Communications rose by 8.82 percent to close at 74k, while Honeywell Flour garnered 7.50 percent to close at N4.30 per share.

Stock Market Gains N18bn; FTN Cocoa Processors, Prestige Assurance lead Losers’ Chart 

Conversely, Unilever Nigeria Plc led the losers’ table by 9.80 percent to close at N16.10, Julius Berger lost 9.64 percent to close at N50.60, while Morison Industries Plc shed 9.60 percent to close at N2.23 per share.

May & Baker Nigeria Plc depreciated by 6.52 percent to close at N6.45 and National Salt Company of Nigeria (NASCON) dropped 5.37 percent to close at N59.04 per share.

Market breadth closed negative with 26 declining stocks outnumbering 23 advancing ones.

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