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Market Value of Airtel, BUA Foods, Stanbic, Others Depreciate by N135.42bn in February

Market Value of Airtel, BUA Foods, Stanbic, Others Depreciate by N135.42bn in February

.Airtel market capitalisation now N4.735trn .Dangote Cement adds N219.8bn

Kayode Tokede

On the backdrop of aggressive profit-taking by investors’, the market capitalisation of 10 top losers on the Nigerian Stock Exchange Limited (NGX) depreciated by N135.42billion in the month of February 2022, market data has revealed
Among the top losers on the Exchange in February are; Airtel Africa Plc, Okomu Oil Palm Plc, BUA Foods Plc, Vitafoam Nig Plc and Stanbic IBTC Holdings Plc

Others included; Ecobank Transnational Incorporated, Dangote Sugar Refinery Plc, Nigerian Brew. Plc, Ellah Lakes and Glaxo Smithkline Consumer Nigeria Plc.

THISDAY analysis of stock market data for the period under review showed that BUA Foods market value depreciated most, followed by Airtel Africa and Stanbic IBTC Holdings.

With 4.65 per cent or N3.00 decline in stock price in February, the market capitalisation of BUA Foods depreciated by about N54billion, while a drop of 0.87 per cent or N11.00 per share downsized Airtel Africa market capitalisation by N41.34billion in the month under review.

Despite dropping from N1,271.00 to N1,260.00 per share, Airtel Africa leads the market capitalisation of all listed companies on the bourse, covering 18.53 per cent or N4.735trillion of the entire N25.543 trillion of market capitalisation.

Analysts explained that price appreciation witnessed by BUA Foods and Airtel Africa since commencement of trading in 2022 led to investors’ profit-taking in February.

Commenting, the Vice president, Highcap Securities Limited, Mr. David Adnori said the price of Airtel Africa appreciated in January amid investors’ reaction to transactions the telecommunication carried out in East Africa that enhance the profitability of the company.

According to him, “There was a lot of exorbitant that moved the price of Airtel Africa and BUA Foods upward. Along the line, profit-taking has corrected the price to the normal price of both companies. Both companies are excellent in corporate earnings.

“BUA Foods when it was listed in January took the stock market by storm. The market was already waiting for the company to be listed and when it was listed, it was well accepted by both foreign and local investors. They priced the stock and it moved from N40 to N60 in a short period. Along the line, profit-taking has corrected the overvaluation and it has started to show its real value on the Exchange.

On his part, analyst at PAC Holdings, Mr. Wole Adeyeye also collaborated with Adnori, stressing that investors’ profit-taking down the stock price of Airtel Africa and BUA Foods.

According to him: “It is expected of BUA Foods and Airtel Africa to show their fair value following investors profit-taking.”

Meanwhile, Okomu Oil Palm Plc and Vitafoam Nigeria Plc were among the top losers in market capitalisation during the period under consideration. While Okomu depreciated by N6.67billion, Vitafoam Nigeria went down by N2.62billion in market capitalisation in February.

Also, Stanbic IBTC Holdings was among the top losers in market capitalisation, dropping by N9.7billion while Ecobank Transactional Incorporated depreciated by N10.09billion in market capitalisation last month.

On the contrary, Dangote Cement gained N219.8billion in market capitalisation as its stock price appreciated by N12.90 or 4.95 per cent to close at N273.50 per share.

The cement producer yesterday released its 2021 financial results reporting a revenue of N1.38 trillion during the period from N1.03trillion reported in 2020, representing a 34 per cent increase Y-o-Y.

The company’s result is on the back of an inflationary year, as most businesses and their consumers have had to deal with the rising cost of goods and services.

A result posted on the NGX website revealed that the company’s profit was driven by a significant rise in domestic and export sales in Nigeria, compared to domestic and export sales in Pan Africa.

Dangote Cement’s reported 32 per cent increase in profit to N364.44billion in 2021 from N276.07billion reported in 2020 as the management proposed a dividend of N20.00 per ordinary 50 kobo share (2020: N16.00).

In the same vein, MTN Nigeria and Seplat Petroleum appreciated by N71.24billion and N41.13billion in market capitalisation in the month under review respectively.

Analysts attributed gains in the stock price of Seplat petroleum to investors’ positive sentiment which was trigged by the jumping in global oil prices, following the Ukraine Russia conflict.

They also noted that the acquisition of the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from Exxon Mobil Corporation, Delaware (ExxonMobil), surge demand for the company’s stocks on the bourse.

Further analysis revealed that Zenith Bank, among the listed banks appreciated most in February trading transactions.
The lender’s market capitalisation gained N32.97billion when it stock price added N1.05 or 4.03per cent to close at N27.10 per share.

Zenith Bank reported profit before tax closed 2021 at N280.4billion, an increase of 10 per cent from N255.9billion reported in 2020.

According to the bank: “The increase in profit before tax was due to growth in the top-line and very strong management of our treasury portfolio that increased efficiency, resulting in a drop in interest expense by 12per cent from N121.1 billion in 2020 to N106.8 billion in the current year.

“This further led to a seven per cent increase in net interest income of N320.8 billion in 2021 from N299.7 billion in 2020.

“This was on the back of 23per cent Year-on-Year (YoY) growth in non-interest income from N251.7billion to N309billion and a two per cent YoY growth in interest income from N420.8billion to N427.6billion.

The group also reported 6.01 per cent increase in profit after tax to N244.6billion from N230.57 billion reported in 2020.

The bank’s board had proposed a final dividend of N2.80 per share for 2021 financial year (2020FY: N2.70/s), which equates to a dividend yield of 10.3per cent based on the closing price of N27.10/s as of the 28th of February 2022.

Commenting on the bank’s result, analysts at Cordros Securities said, “We like that Zenith Bank maintained the earnings growth momentum throughout the year, although at a slower pace (of 6.4 per cent vs 10.1per cent in 2020FY) as it continues to grapple with headwinds from the business and regulatory environment.

“In our opinion, the bank remains one of the premier banks in the country, with strong fundamentals that denote its strength. We remain positive regarding the long-term outlook for the bank and expect financial performances to remain strong, supported by strong underlying fundamentals and strong management. We are reviewing our estimates.”

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