Another Disappointing Year From GTCO

Good morning and welcome to this week’s edition of 4 Customs Street, our weekly newsletter on the stock market.

The newsletter is divided into two:?

• Green White Green—focused on the Nigerian stock market.?
• Star-Spangled Banner—focused on the US stock market.

Green White Green Last Week?

A disappointing orange year

During the week, GTCO released its audited results for the financial year ended December 2022.

While gross earnings increased, profit after tax dipped slightly.

Gross earnings rose by 20% from ?447 billion in FY 2021 to ?553 billion in FY 2022.

Profit after tax dipped slightly from N174 billion in 2021 to ?169 billion in 2022, down 3% year-on-year.?

Not only is this the lowest profit after tax for the firm in the last five years, it also shows it has had three straight years of declining profits.?

What were the key factors behind the poor numbers??

Impairment charges on Ghanaian debt instruments and higher operating expenses.

In total, a ?35.5 billion impairment loss charge was taken on Ghanaian debt instruments. That's a massive jump from the ?760 million in charges it took last year for that line.

An impairment means not getting the entire capital that was invested and the returns that were expected.?

UBA Q1 2023

Gross earnings rose by 47.5% from ?183.9 billion to ?271.2 billion.

Profit after tax rose by 29.1% from ?41.4 billion in 2022 to ?53.5 billion in 2023.

Standout points were higher interest income (chiefly from term loans, bonds and treasury bills) and trading income (fixed income in particular).

Fidelity Bank announced the result of the private placement of 3,037,414,308 ordinary shares of 50 kobo each at ?4.60 per share, which opened on Wednesday, February 22, 2023 and closed on Thursday, February 23, 2023.

The private placement was therefore 100% subscribed. A private placement is when a company sells shares to a select group of investors.?

Green White Green This Week?

GTCO will be holding an analyst call following the release of its FY 22 numbers.

MTN Nigeria will be holding its Annual General Meeting (AGM) within the week. If you are a shareholder or have bought your shares before the qualification date, expect your dividend to land in your bank account soon after.?

Star-Spangled Banner Last Week?

Air Jordans sell for $2.2 million

Kanye West has been defeated by Michael Jordan as the king of the shoe secondary market.

The new public sales record price for any pair of sneakers was set on Tuesday when a pair of signed Air Jordan XIII sneakers that Mr. Jordan wore during the 1998 NBA Finals sold at Sotheby's for a record-breaking $2.2 million including fees. A Nike Air Yeezy 1 prototype that sold at a private auction for $1.8 million in 2021, held the previous record.

Despite those in the sneaker-collecting community expecting a bidding frenzy, only one early $1.8 million bid was successful in the online auction. The bid was below Sotheby's estimate of $2 million to $4 million.

US Inflation hits the lowest level since 2021

The Federal Reserve may decide to contemplate another interest rate increase at its May meeting despite the fact that US inflation dropped in March to its lowest level in nearly two years due to persistent price pressures.

For their headline inflation, the month-on-month inflation rate stands at 0.1% while the year-on-year rate is 5.0%. Headline inflation is the total inflation in the economy.

On the other hand, for their core inflation, the month-on-month inflation rate is 0.4% and the year-on-year rate is 5.6%. Core inflation is the change in price of goods and services excluding the food and energy sector. These sectors are excluded when calculating the core inflation because their prices are too volatile, that is, they fluctuate rapidly.

According to the Labor Department, consumers paid more for housing, plane tickets, and auto insurance last month while paying less for groceries, petrol, medical care, and utilities.

Star-Spangled Banner This Week

Next week, the earnings season becomes busier with many of the biggest corporations in the world, including Johnson & Johnson, Bank of America, Netflix, Lockheed Martin, Tesla, Morgan Stanley, IBM, American Express, and Procter & Gamble, releasing their quarterly financial results.

Inflation numbers from the UK, eurozone, and Japan will also be provided, along with data on China's first-quarter GDP.

Slack v. Pirani, a challenging securities law case that may determine the future of direct stock listings in the US, will be discussed by the US Supreme Court on Monday.

On June 20, 2019, tech company Slack went public through a direct listing, which allows existing shareholders to sell their shares on the exchange.

Fiyyaz Pirani purchased 30,000 Slack shares at $38.50 per share on the day it went public and went on to purchase another 220,000 over several months. Subsequently, the share price dropped below $25.?

Pirani took Slack to court, alleging that Slack’s registration statement was inaccurate and misleading because it did not disclose information about its service disruptions and how it compensated customers for those disruptions.

The district court held that Pirani had standing to sue Slack even though he could not prove that his shares were issued under the registration statement he said was inaccurate. On appeal, a panel of the US Court of Appeals for the Ninth Circuit affirmed over one dissenting vote.

The supreme court will rule on if investors can prove that they bought shares registered under the registration statement they claimed was misleading.

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