Elon the Cutter

Good Morning?

How are you doing?

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.

This week, we are flipping things by starting on the foreign scene, as it has been a fairly slow week in Nigeria.?

Star-Spangled Banner Last Week

Elon the cutter?

Elon Musk was in the news again (and very likely will be for the next few months) following job cuts at Twitter.

Elon in a tweet defended the move as the company was losing over $4 million per day. He also stated that everyone fired was offered three months severance pay.?

Roughly half of the company's workforce (about 3,700 people) were laid off on Friday. What got people upset is that they were sacked in an abrupt manner. Cut off from company access without notice.

Some of the laid off staff may be taking the company to court. So expect some fireworks from there.?

Jack Dorsey, co-founder of the firm, somewhat took responsibility for this, as he apologised for growing the company too fast.?

Few days later, the company rolled out plans to charge verified users (those who have a blue tick by their handles) $8 a month. Many users kicked because it is a large sum of money. Would you pay over ?6,000 monthly for that??

Elon being Elon defended the move saying some ex staff of the company had solicited for money in exchange for doing so.

Star-Spangled Banner This Week

Unconfirmed reports indicate Meta (formerly known as Facebook) may be laying off some staff this week. Will that turn down the pressure on Mark Zuckerberg??

Apple is in the news as well following reports that COVID restrictions in China may hamper iPhone Pro production. One analyst (who you should definitely follow if you are into tech stocks) estimates it could cost the company $3 billion in revenue.?

High or low?

Inflation figures for the month of October will be out this week. Analyst estimates place it at 7.9%. That would be slightly lower than the previous month, but we could be in for a surprise.

The direction is important because it will influence if the US Fed (equivalent of the Central Bank of Ghana) will increase interest rates in the country.?

Time to play

A few companies from the entertainment space will be dropping their earnings. They include Disney, Roblox, and Take Two Interactive.

For the last quarter, Disney+ streaming numbers came in better than expected (subscribers hit 137.7 million?in Q2, up 8 million from Q1). So the bar has been raised. Will it exceed them or falter??

Roblox had a disastrous last quarter. So, any good news is welcome.?

Green White Green Last Week

Everyone is under pressure??

BUA Foods last week released its 9M numbers and they came in good. Revenue rose by 20.2% from ?241.1 billion in 9M 2021 to ?289.8 billion in 9M 2022. Profit after tax increased by 17.2% to ?68.7 billion in 9M 2022 (9M 2021: ?58.6 billion)

For BUA Foods, selling and distribution expenses increased by 32.3% from ?7.8 billion in 9M 2021 to ?10.4 billion in 9M 2022 (due to huge increase in cost of diesel within the period.

Due to energy challenges, there was also a decline in production volumes across all three segments: flour, pasta and sugar.?

International Breweries (arguably one of the top two brewers in the country by volume) also shared some of the challenges it's facing.?

In a press release, it stated:

“... Our volumes declined in the third quarter of 2022 due to a soft industry and ongoing supply chain constraints. The last three months (July to September, 2022)?have been characterised by elevated inflationary pressure which has had an impact on consumer disposable income. The period experienced especially severe weather with a longer rainy season and floods in key markets.”?

Green White Green This Week?

Omatek, McNichols and Nigerian Enamelware will be holding family meetings (formally known as Annual General Meetings AGMs during the week).?

They are not very prominent companies, but being listed we must cover them. Like we said at the beginning of this newsletter, it is going to be a fairly uneventful week in Nigeria. Should anything come up, we will share. Meanwhile, please follow us on all our social media platforms.?

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