Olayemi Cardoso is Nigeria's New CBN Governor

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

Nigeria's new CBN governor

Olayemi Cardoso has been confirmed as the new governor of the Central Bank of Nigeria. He is a seasoned banker with experience in both the public and private sectors. He previously served as chairman of Citibank Nigeria and commissioner for economic planning and budget in Lagos State. Cardoso takes over for a five-year term, following the resignation of former governor Godwin Emefiele.?

He will face a number of daunting challenges including:

• Stabilizing the naira: The naira has weakened sharply against the US dollar in recent months, reaching more than ?1,000 to $1 on the parallel market. Cardoso has said his immediate priority is to clear the central bank's backlog of foreign exchange debt. Also, the central bank's backlog of foreign exchange debt is estimated at $6.8 billion.
• Attracting foreign investment: Nigeria is facing a chronic shortage of foreign exchange, and foreign investors have been shying away from the country. Cardoso will need to find ways to attract foreign investment and boost liquidity.
• Taming inflation: Inflation is at an 18-year high of more than 25%. Cardoso will need to use monetary policy tools to bring inflation under control.

Risevest has acquired Chaka?

Risevest, a fintech company in Nigeria, has acquired Chaka, a digital trading platform, for an undisclosed amount. The acquisition, which was finalized on September 26, 2023, aims to combine the strengths of both companies to create a more robust investment technology ecosystem in Nigeria.

Chaka is a digital platform that allows Nigerians to invest in international markets, such as the Nigerian and US stock exchanges. Risevest, on the other hand, focuses on making dollar investments easy for Nigerians. The acquisition will allow Risevest to leverage Chaka's infrastructure and team to improve its products and services. Risevest co-founder, Eke Urum said that the two companies will continue to operate as separate products, but Chaka's capitalization table will be updated.

Flour Mills of Nigeria Plc (FMN) releases 2021/2022 sustainability report

Flour Mills of Nigeria Plc (FMN), Nigeria's leading food and agro-allied group, has released its 2021/2022 sustainability report titled, "Building a Sustainable Future, Scaling Impact." The report highlights FMN's progress in driving food self-sufficiency in Nigeria and developing local content.

The report shows that FMN has increased its economic value generated, distributed, and retained over the past three years. The group has also invested heavily in developing local content through procurement and backward integration. For example, the total amount paid to suppliers increased from ?552.5 billion in 2021 to ?649.9 billion in 2022.

FMN is also committed to environmental sustainability. The group recycled 2,068 MT and 780 MT of packaging materials across its Morpack Lagos and Kano offices, respectively, in 2022. FMN also renewed its Environmental Audit Reports (EAR) at six sites during the financial year.

FMN is focused on customer satisfaction and product quality. In a customer satisfaction survey, 97% of FMN customers were satisfied with the quality of the company's flour products.

FCMB Group Plc delays publication of Q3 2023 unaudited results

FCMB Group Plc has announced that it will not be able to publish its nine-month (Q3 2023) unaudited results for the period ending September 30, 2023, by the due date of October 30, 2023.

The delay is because FCMB Group Plc is auditing its largest subsidiary, First City Monument Bank Limited, for the period ending September 30, 2023. The group has revised its timeline for publishing its Q3 2023 unaudited results to November 29, 2023.

FBN Holdings to hold board meeting to consider Q3 unaudited accounts?

FBN Holdings, the parent company of First Bank, has announced that its board of directors will meet on October 26 to consider the company's Q3 unaudited accounts for the period ending September 30, 2023.

A closed period will commence on October 15 and continue until twenty-four hours after the company's unaudited accounts have been filed with the Nigerian Exchange Limited. During this time, insiders of the company and their connected persons are prohibited from trading in the company's shares.

Green White Green This Week?

Coronation Insurance Plc will be holding its AGM this week.

AGM stands for Annual General Meeting. It is a mandatory yearly meeting held by companies, organizations, and associations to discuss important matters with their shareholders or members.

The AGM serves as a platform for key stakeholders to receive updates on the company's performance, review financial statements, elect board members or directors, approve the distribution of dividends, and address any other significant issues.

If you held your shares within the qualification period, expect your dividends after the AGMs.?

Star-Spangled Banner Last Week

Retail theft surge in 2022

Retail theft saw a significant increase of nearly 20% in 2022 compared to the previous year, as reported by the National Retail Federation. In terms of the percentage of total retail sales in 2022, shrinkage resulted in losses amounting to $112.1 billion, up from $93.9 billion in 2021, as indicated by the 2023 National Retail Security Survey. This news coincided with Target's announcement of the closure of nine stores in major US cities due to rising violence and organized retail crime.

The issue of organized retail crime continues to be a major concern, primarily due to heightened levels of violence. Retailers have reported taking various measures in response, including closing specific store locations (28%), reducing operating hours (45%), or modifying their in-store product selections (30%) as a direct response to retail crime.

Retailers such as Target (TGT), Dick’s Sporting Goods (DKS), Lowe’s (LOW), and Macy’s (M) have pointed to the increase in crime as a contributing factor to reduced earnings. They have also expressed concerns that this issue may continue to impact their financial results. The top five areas most affected by organized crime in the past year were Los Angeles, San Francisco/Oakland, Houston, New York, and Seattle.

Amazon hit by major antitrust lawsuit

On Tuesday, Amazon (AMZN) experienced a 4% decline in its stock value following the formal filing of a lawsuit against it by the FTC and 17 states. The lawsuit alleges that Amazon employed anticompetitive tactics to maintain its monopoly status, including actions that obstructed competitors and sellers from reducing prices, imposed excessive charges on sellers, and hindered fair competition among rivals.?

Amazon issued a statement in response, stating, "The lawsuit is incorrect both in terms of facts and legal interpretation, and we eagerly anticipate presenting our case in court." This marks a significant antitrust lawsuit, given that Amazon currently holds approximately 40% of the e-commerce market. SA analyst Bradley Guichard has identified two potential outcomes for this case;

• A potential outcome of the FTC's case against Amazon is the company being forced to split up. Amazon's revenue sources go beyond e-commerce, including its leading position in cloud services (AWS), services for third-party sellers, digital advertising, and subscriptions. Breaking up Amazon would have both positive and negative consequences. On the one hand, it would decrease Amazon's competitive advantage and cause uncertainty, which could lower the stock price. On the other hand, it would give investors more choice, as they could invest in the highly profitable AWS business without having to invest in the e-commerce segment.

• The worst-case scenario for Amazon would be a big deal, but it is more likely that the case will end in a settlement that avoids such a scenario, as most similar cases do. The settlement could involve fines and/or changes in practices, and the amount of the fine will likely be related to Amazon's earnings and profits over time. In a recent settlement, Alphabet was fined $170 million, while Meta Platforms paid a record $5 billion in 2019.

Nike beats profit expectations but misses China sales targets

Nike is experiencing an 8% premarket surge in its stock price after surpassing profit expectations, although its sales in China fell short. In the first fiscal quarter, Nike achieved an EPS of $0.94, exceeding the average analyst estimate of $0.75. However, its total revenue of $12.94 billion fell slightly below the projected $12.99 billion, with Greater China's revenue reaching $1.74 billion, missing the anticipated $1.83 billion.?

Notably, Nike successfully reduced its inventory to $8.7 billion, slightly lower than the estimated $8.84 billion, and saw a 6% increase in direct sales, totaling $5.4 billion compared to the previous year.?

CEO John Donahoe emphasized the company's commitment to expanding these achievements consistently and swiftly while streamlining its business operations. Nike announced dividends of $524 million, marking a 9% increase from the previous year. However, it's worth noting that Nike has experienced a 25% decline in its stock price year-to-date.

Star-Spangled Banner This Week

• A potential government shutdown looms unless Congressional leaders reach a consensus on eleventh-hour funding measures to extend government operations beyond September 30.

• This week, we'll receive updates on the job market, including the August Job Openings and Labor Turnover Survey (JOLTS), ADP's National Employment Report detailing private sector payrolls, and the nonfarm payrolls report for September.

• Constellation Brands and Levi Strauss are scheduled to release their earnings reports in the upcoming week.