Stock Market Review

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

How was your weekend? 

Green White Green Last Week

Nigerian stocks continue to tumble in March. How do we know this? By looking at a figure known as the All-Share Index. 

The index measures the average performance of stocks on the exchange. On average, if the index gains, it means stocks have gone up. But if the index declines, it means most stocks dropped.

Last week, the index declined by 1.74%. Some stocks usually do better or outperform the index, while others do worse or perform below the index. 

Champion Breweries led the gainers for last week. It appreciated by 45.2% to close at ?2.44. Eterna Plc led losers as it declined 18.95% to close at ?4.62.

Three stocks were marked down during the week. United Capital, Zenith Bank, and Nigerian Breweries. A markdown is when a stock price is adjusted for either a dividend or bonus. 

United Capital was marked down by 70 kobo and the ex-dividend price was ?5.02. Zenith Bank was marked down by ?2.70 and the ex-dividend price was ?22.20. Nigerian Breweries was marked down by 69 kobo and the ex-dividend price was ?49.30. 

Heartbreak from UBA 

UBA, one of the big 5 banks in Nigeria, released its audited full-year 2020 numbers. 

Shareholders had their hearts broken as the bank cut its final dividend. It is proposing a final dividend of 35 kobo per share. That is a 56.2% drop from the 80 kobo paid for the 2019 final year. 

During an investor call, the CEO of the bank Kennedy Uzoka stated that the bank decided to do so in order to have a buffer following the disruptions caused by COVID-19. 

Green White Green this Week 

Zenith Bank will hold its Annual General Meeting on March 16, 2021. The final dividend of ?2.70 will be paid on the same day, if approved by shareholders. 

We also expect some of the outstanding big 5 numbers to be released sometime within the week. The big 5 refers to the 5 biggest banks by capitalisation in Nigeria. They are FBN Holdings, UBA, GTBank. Access and Zenith. UBA and Zenith have released their audited full-year 2020 numbers. 

Star-Spangled Banner Last Week 

Last week was a positive one for the market, as all indices closed northwards. The S&P 500 gained 2.64%. The Dow Jones Industrial Average (commonly known as the Dow) gained 4.07%. NASDAQ gained 3.09%. 

Roblox, the popular kiddies gaming app was listed on the New York Stock Exchange (NYSE) during the week. Roblox had a direct listing. In a direct listing, existing shareholders sell their shares to members of the public. The stock closed at $69.70, 54.8% above its reference price of $45. 

Coupang, a South Korean e-commerce platform, had its Initial Public Offer (IPO) during the week as well. An IPO is the first time a company sells new shares to members of the public. The stock closed at $48.47, 38.4% above its IPO price of $35. 

Star-Spangled Banner this Week. 

The US Fed will hold its Federal Open Market Committee (FOMC) meeting on March 16 and March 17. 

The Fed is the US central bank, while the FOMC formulates monetary policy. In the last couple of weeks, there have been worries about a rise in inflation. 

Higher inflation means, at some point in time, the interest rate will be raised. That means a higher return on fixed-income investments such as bonds and treasury bills. If that happens, investors will move some of their funds away from the stock market. 

The Fed chair, Jerome Powell, has at various fora indicated a rise in rates won’t happen anytime soon. Analysts will be watching closely if that has changed.  

A couple of key firms will release their earnings during the week.  They include Dollar General, Crowdstrike, Accenture, FedEx, and Nike. 

Would you like to learn more about investing in stocks? We have a webinar coming up on Saturday, March 27, 2021. You can sign up here

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