Business
Capital market loses N309bn year to date
LAGOS – Among the 30 highly capitalised stocks listed on the Nigerian Stock Exchange (NSE), three banking stocks – Skye Bank plc, Ecobank Transnational Incorporated plc, and Fidelity Bank plc – were most negatively impacted in a recent value loss which took about N309 billion off Nigerian equities.
The sensitivity of the All Share Index (ASI) as benchmark indicator that tracks performance of the entire Nigerian equity market is largely driven by highly capitalised stocks.
BusinessDay tracking of the performance of large cap stocks at the Nigerian bourse (from January 7 to February 7, 2014) shows that Skye Bank plc lost most in the NSE-30 basket after its share price declined by 46.12 percent or N1.96kobo from a high of N4.25kobo to N2.29kobo.
Another big loser in the four-week period to February 7 is Ecobank Transnational Incorporated (ETI), which has declined by 12.82 percent or N2.18kobo from a high of N17 to N14.82kobo.
Similarly, Fidelity Bank plc has lost 11.24 percent or N0.3kobo from the value of its shares, which was N2.67kobo as at January 7 but declined to N2.37kobo as at February 7.
Also, at a low of N6.85kobo from N7.70kobo, Diamond Bank plc lost 11.04 percent or N0.85kobo of the value of its share in the review four-week period.
The value loss recorded in large cap stocks contributed immensely in redirecting the market trajectory to the negative zone of about 1.34 percent at the close of deals last week.
As banks recover from the 2013 regulatory pressures, with appreciable earnings growth expectation, market participants expect a positive correction in the prices of the value names in the sector.
For instance, Bismarck Rewane, CEO, Financial Derivatives Company Limited, noted that “bargain hunters may consider banks with solid fundamentals in this temporary downturn”.
Rewane, who spoke at the Lagos Business School (LBS) executive breakfast meeting, added that “banking stocks on the NSE are trading on average at 8.5x earnings compared with the market P.E. at 14.5x”.
Ashaka Cement plc, United Bank for Africa plc and Access Bank plc also followed the trio earlier mentioned in value loss.
In the four-week period to February 7, Ashaka Cement plc declined by 9.73 percent or N2.06kobo from a high of N21.17kobo to N19.11kobo; United Bank for Africa plc lost 9.72 percent or N0.86kobo from the value of its share from N8.85kobo to N7.99kobo; while Access Bank plc, which traded at a low of N8.79 kobo from N9.7kobo, lost 9.38 percent or N0.91.
As the banking counters occupy top position in this value shed, with associated positives on full-year 2013 earnings releases now in the air, market analysts see recent value shed as an opportunity for bargain hunters to buy into some of these banks, particularly those with strong fundamentals and dividend payment history.
The value of equities traded daily dropped by 49.85 percent or N3.163 billion from N6.344 billion to N3.181 billion; while the volume of equities declined by 34.58 percent or 144.361 million from 417.498 million to 273.137 million.
In addition to the aforementioned equities, Union Bank of Nigeria plc lost 9.09 percent or N0.95kobo from N10.45 to N9.50kobo; FBN Holdings plc declined by 8.69 percent or N1.4kobo from a high of N16.10kobo on January 7 to N14.70kobo as at February 7, 2014; while Nigerian Breweries plc, which opened the review period at N167.5kobo, dropped by 8.06 percent or N13.5kobo to N154.
Guinness Nigeria plc lost 7.91 percent or N18.83 percent from N238.08kobo to N219.25kobo; Lafarge Cement Wapco plc dropped by 6.09 percent or N7 from N115 to N108; while Zenith International Bank plc lost 4.92 percent or N1.15 from N23.38 to N22.23.
Looking further into the performance of stocks in NSE-30 basket, it shows that UACN plc, which stood at N70.35 on January 7, declined to N69 as at February 7, indicating a decline of 1.91 percent or N1.35; while GlaxoSmithKline Nigeria plc gained N1 or 1.47 percent from a low of N68 to N69.
International Breweries plc recorded a decline of 1.36 percent or N0.4kobo from N29.4 to N29; Oando plc lost N0.1kobo or 0.46 percent from N21.73kobo to N21.83kobo; FCMB Group plc declined by N0.11kobo or 2.87 percent from a high of N3.83kobo to N3.72kobo; Transnational Incorporated plc, which stood at N4.05kobo, rose to N4.11kobo, indicating a rise of 1.48 percent or N0.06kobo; while Nestle Nigeria plc declined by N30 or 2.56 percent from N1,170 on January 7 to N1,140 as at February 7.
Unilever Nigeria plc was in the gainers league in our four-week trend watch after rising by 1.44 percent or N0.77kobo from N53.24kobo to N54.01kobo; Stanbic IBTC Holdings plc lost 6.98 or N1.5kobo from a high of N21.50kobo to N20; Flour Mills of Nigeria plc also dropped by 0.07 percent or N0.06kobo from N87.06kobo to N87; GTBank plc dipped by N0.92kobo or 3.31 percent from N28.4kobo to N27.48kobo; while Total Nigeria plc lost 0.26 percent or N0.45kobo from N175.46kobo to N175.01kobo.
Forte Oil plc recorded a value rise of 14.84 percent or N13.21 from N89 to N102.21; Dangote Cement plc gained N5 or 2.13 percent from N235 to N240; Dangote Sugar Refinery declined by 1.36 percent or N0.16 from N11.8 to N11.64; Julius Berger was down by 1.78 percent or N1.29 from N72.29 to N71; while PZ Cussons Nigeria plc gained N0.1 or 0.26 percent from N37.90 to N38.
– BUSINESS DAY
Business
Tesla Aims for 2028 Commercial Production of Flying Car
Tesla has set a 2028 commercial production date for its new Roadster sports car that can briefly rise into the air using rocket technology.
According to CNN, the date was revealed when the manufacturers demonstrated its functionality on Thursday at a SpaceX testing facility in Texas, United States, where the two-seater vehicle performed a series of manoeuvres, including driving upside down before making a short airborne movement.
The prototype was operated without a driver during the test, with Musk saying the decision was taken “to make sure we don’t kill anyone.”
“Success is not guaranteed. I mean that. It’ll probably work, but if it doesn’t work, we’re at a safe distance,” he said.
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CNN reported that the vehicle uses 10 nozzles and high-pressure air tanks to generate thrust, with Musk claiming it could accelerate from zero to 60 miles per hour in less than a second.
The Tesla boss attributed the development to cooperation between the electric vehicle manufacturer and SpaceX, the rocket company he also leads.
He described the project as “the results of what happens when you have a collaboration with the world’s best car company and the world’s best rocket company.”
Musk also sought to assure spectators that the demonstration was genuine, saying, “We need an audience to prove that it’s not AI or SI. So you guys can tell people you saw it with your eyes, because what you see with your eyes, you will not believe.”
Despite the display, questions remain about whether the vehicle can achieve sustained flight and how practical it would be for everyday transportation.
Roger Conner, curator for vertical flight at the Smithsonian’s National Air and Space Museum, told CNN that combining the requirements of road vehicles and aircraft presented significant engineering challenges.
“Aircraft are extremely sensitive to weight, whereas with ground vehicles you want them to have bumpers and crumple zones and all that,” he said.
“Inevitably, something that is a hybrid between the two is going to be a poor performing aircraft and a poor performing vehicle, and also quite expensive,” he added.
Conner questioned whether the demonstration amounted to flying in the conventional sense.
“We’re not talking about sustained flight. We are literally talking about hopping,” he said.
However, Jim Dukhovny, chief executive of flying car startup Alef, said the technology was achievable, while pointing to the difficulties involved in making such vehicles transition safely from vertical take-off to forward flight.
“It absolutely is 100% feasible,” he told CNN.
“That being said, the hardest part on all eVTOLs, and for us, it’s a transition from (rising) vertical to (moving) forward. It needs to be extremely careful, making sure you do not lose lift, and making sure it’s very stable,” he added.
CNN also reported that Alef’s prototype weighs about 254 pounds, uses eight propellers and is designed to carry one person.
Musk said Tesla intended to begin production of the new Roadster in 2028.
CNN reported that the latest display adds to Musk’s ambitions to push Tesla’s vehicle technology beyond conventional electric cars, although the prototype’s ability to operate as a practical flying vehicle has yet to be established.
Business
Marketers Eye Portion of FG’s Petrol Discount
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has urged the Federal Government to add its member-stations to the petrol discount programme.
It cautioned that the current arrangement could limit the reach and deny vast consumers in underserved communities the benefits of the 30-day discount window.
The PETROAN also urged the FG to allocate at least 30 percent of the discounted petrol volume to outlets operated by its members.
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The calls followed last week’s announcement by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, of a petrol discount at Nigerian National Petroleum Company Limited (NNPC Ltd) retail outlets, with priority given to public transport operators nationwide.
According to the National Publicity Secretary, Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, the exclusion of independent marketers could undermine the programme’s effectiveness, particularly in communities where NNPC retail outlets have limited presence.
He argued that independent marketers, with their extensive nationwide distribution networks, were better positioned to extend the benefits of the intervention to consumers in remote and underserved areas.
“Independent oil marketers have over 90 percent coverage and presence in the nooks and crannies of this country. You are giving NNPC that is situated only in the town. So how do the poor masses, whom you intend to ensure that this petroleum product will alleviate their sufferings, how would they now get it?” Ukadike asked.
He said the association was not opposed to the government’s policy but insisted that independent marketers should be included to ensure wider access to the discounted product.
“But it’s government policies; we are not against government policies, but let it be all-inclusive; let independent marketers be part of it,” he said.
Ukadike also urged the government to extend the discount period to 60 days, citing logistical challenges that could delay the movement of petrol from coastal depots to other parts of the country.
“And the 30 days should be extended to 60 days. Because of the circulation of petroleum products, most times it takes two weeks for a truck to leave Apapa and get to Gombe, Maiduguri, because of the bad road and all the rest of them and loading process,” he added.
Similarly, PETROAN National President, Billy Gillis-Harry, urged the Federal Government to allocate 30 per cent of the discounted petrol volume to the association’s retail outlets to facilitate broader national distribution.
Business
Tanzania Nears Completion of $42bn Equinor, Shell-Led LNG Project
In the bid to transform Tanzania into the East African regional energy hub, the country is on the verge of concluding an agreement with a consortium of energy companies, including a $42 billion LNG project.
It was gathered that the project is designed to tap the 47.13 tcf of gas discovered in Tanzania’s deep offshore fields, part of the country’s estimated 57.54 tcf in total discovered reserves, the sixth-largest in Africa, behind Nigeria, Algeria, Senegal, Mozambique and Egypt.
READ ALSO: Shell Identifies Keys to Nigeria’s Energy Future
Equinor and Shell would be the lead operators, alongside involvement from ExxonMobil Pavilion Energy and Medco Energi, while state oil major, the Tanzania Petroleum Development Corporation (TPDC), would also hold an equity stake in the project.
“It’s almost there,” Khamis Mussa Omar, Tanzania’s finance minister, told Reuters.





