Why Meyer Fell By Over 50% Last Week

Good morning.?

How was your weekend??

Welcome to this week’s edition of 4 Customs Street, our weekly newsletter on the stock market.?

The newsletter is divided into 2:?

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

Green White Green Last Week?

It was a down week on the exchange as the All-Share Index fell by 0.10%. 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.?

Honeywell Flour was the best performing stock last week. It gained 46%, opening at ?2.05 and closing at ?3, up ?0.95.?

Meyer led the losers for the week. It declined by 66.10% opening at ?0.59 and closing at ?0.20. The sharp drop was largely due to a markdown. A markdown is when a stock is adjusted downwards to take into account a proposed dividend or bonus.?

Meyer will be paying an interim dividend of ?1.50. Why is it called interim? An interim dividend is one that is paid before the end of a company’s financial year.?

The dividends are funded from part of the proceeds of the sales of an asset. That’s also the first time in a long while the company is paying a dividend.?

Meyer is a company in the paints business that has struggled over the years. Hopefully , the injection of funds will turn the business around.?

In the short-term, you could see the stock bounce a bit having fallen sharply due to the markdown. In the long run, it needs to make a consistent profit from core operations, for it to be worth investing.?

Green White Green This week?

Daar Communications, LASACO Assurance, and RT Briscoe will be holding their Annual General Meetings (AGMs) on August 26, 2021.?

Aside from that, it is a relatively quiet week. Results from GTCo, Zenith and UBA is expected anytime from now.

Access Bank had sent in a notice stating it would release its results on or before September 10, 2021. If you are an Access shareholder, you may have to wait a bit for an interim dividend.?

Star-Spangled Banner Last Week?

Last week was a red week for stocks. The Dow fell by 1.11%. The S&P 500 fell by 0.59%. NASDAQ fell by 0.73%.?

The poor performance was largely due to fears that the Fed ( US central bank) will cut back on its bond buying programme (known as tapering) within the year.? The Fed buying bonds helps to lower interest rates in the financial markets.?

Star-Spangled Banner This Week?

It is a tech week as Snowflake, Peloton, Paloalto Network,? Splunk and Dell Technologies will be releasing their earnings during the week.?

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