Seplat’s Big Move

Good morning and 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.?

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Green White Green Last Week?

Last week was a good one for the Nigerian stock market. Why do we say so??

The All-Share Index gained 0.40% this week. The index measures the average performance of stocks on the exchange. Some stocks will do better than the index. Some stocks will do worse than the index.?

RT Briscoe was the best performing stock this week. It gained 53.8%, opened at ?0.60, closed at ?0.94, up ?0.34.?

Ellah Lakes was the worst-performing stock this week. The stock declined by 9.88%, opened at ?4.25, closed at ?3.83, down ?0.42.

The biggest headline on the bourse this week was Seplat Energy’s announcement of its intentions to acquire Mobil Producing Nigeria Unlimited? (MPNU) for $1.2 billion. Seplat will also pay an additional $300 million subject to some terms and conditions.?

The company currently expects the transaction to close in H2 2022. If approved by regulators (and ultimately President Muhammdau Buhari who is the Minister of Petroleum), the transaction will make the company one of the biggest independent energy producers in the country

What does Seplat get from this?

MPNU’s assets are in what's known as shallow waters. That means there are fewer disruptions to operations such as pipeline vandalism that occurs on land. Some of the assets also have large gas reserves, and Seplat is very big on gas. Seplat also gains access to other export facilities beyond what it currently has.?

If you are a shareholder, do not worry about the dividend payout. The company stated it will continue to maintain the dividend payout.?

Shareholders seem to be happy with the planned deal, as the stock gained 10% on Friday to close at ?945.80.?

Green White Green This Week?

Seplat will release its FY 2021 numbers this morning. If you have any questions, you can ask on the analyst call. We will share the link once we get it.?

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Star-Spangled Banner Last Week?

While stocks dipped mid-week, following Russia’s invasion of Ukraine, they largely bounced back. The S&P 500 gained 0.8%. The NASDAQ composite appreciated by 1.1%. The Dow fell 0.1%.?

Star-Spangled Banner This Week?

Expectedly, various countries in Europe have imposed sanctions on Russia. The US, Britain, Europe and Canada have blocked some Russian banks from accessing the SWIFT international payment system.

What will Russia do next? Nobody knows. That uncertainty will filter into the financial markets as well.?

In terms of earnings, it is a fairly quiet week. From the tech space, Zoom Video and Snowflake will be releasing their earnings during the week.

From the retail end, Kroger, Best Buy, and Costco will release their earnings

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