Market Update

Nigerian Equities Market Update: 19th February, 2018

Rounding up the first trading day of the new week, equities trading on the floor of The Nigerian Stock Exchange swerved by 153Bpts as it closed at 41,988.18 from 42,638.83. It was a mixed performance amongst the observed market indices as shown in the index movement table. After today’s bearish moves, point lost in the month of February increased to 531Bpts.

Value loss by the market capitalization of the listed equities during today’s trading activities was N233.653 billion, same as 153Bpts below the opening value.  Meanwhile, trading activities for the day produced 16 advancers and 32 lagers. NSEASI Year to Date gain is now 9.79% while the Market Capitalization Year to Date gain stood at N1.458 trillion same as 10.72% above the year’s opening value.

The central bank of Nigeria in its bid to protect depositors and safe shareholders’ fund from depletion, has made known its resolve to put to play the long standing policy on dividend payment for deposit money banks (DMB) and discount houses. Although this policy is not new, it may have put more fear in most investors and increased panic sell off of some banking equities. Please find stated below, details of the policy. Also a table of various bank’s position as at third quarter of 2017 is attached.

  • Banks that do not meet the minimum capital adequacy ratio shall not be allowed to pay dividend.
  • Banks that have a Composite Risk Rating (CRR) of “High” or a Non Performing Loan (NPL) ratio of above 10% shall not be allowed to pay dividend.
  • Banks that meet the minimum capital adequacy ratio but have a CRR of “Above Average” or an NPL ratio of more than 5% but less than 10% shall have dividend payout ratio of not more than 30%.
  • Banks that have capital adequacy ratios of at least 3% above the minimum requirement, CRR of “Low” and NPL ratio of more than 5% but less than 10%, shall have dividend pay-out ratio of not more than 75% of profit after tax.
  • There shall be no regulatory restriction on dividend pay-out for DMBs and DHs that meet the minimum capital adequacy ratio, have a CRR of “low” or “moderate” and an NPL ratio of not more than 5%. However, it is expected that the Board of such institutions will recommend payouts based on effective risk assessment and economic realities.
  • No Bank shall be allowed to pay dividend out of reserves.
  • Banks shall submit their Board approved dividend payout policy to the CBN before the payment of dividend shall be permitted.

We strictly recommend a safe play around the market.

Comment here

Market Update

Nigerian Equities Market Update: 19th February, 2018

Rounding up the first trading day of the new week, equities trading on the floor of The Nigerian Stock Exchange swerved by 153Bpts as it closed at 41,988.18 from 42,638.83. It was a mixed performance amongst the observed market indices as shown in the index movement table. After today’s bearish moves, point lost in the month of February increased to 531Bpts.

Value loss by the market capitalization of the listed equities during today’s trading activities was N233.653 billion, same as 153Bpts below the opening value.  Meanwhile, trading activities for the day produced 16 advancers and 32 lagers. NSEASI Year to Date gain is now 9.79% while the Market Capitalization Year to Date gain stood at N1.458 trillion same as 10.72% above the year’s opening value.

The central bank of Nigeria in its bid to protect depositors and safe shareholders’ fund from depletion, has made known its resolve to put to play the long standing policy on dividend payment for deposit money banks (DMB) and discount houses. Although this policy is not new, it may have put more fear in most investors and increased panic sell off of some banking equities. Please find stated below, details of the policy. Also a table of various bank’s position as at third quarter of 2017 is attached.

  • Banks that do not meet the minimum capital adequacy ratio shall not be allowed to pay dividend.
  • Banks that have a Composite Risk Rating (CRR) of “High” or a Non Performing Loan (NPL) ratio of above 10% shall not be allowed to pay dividend.
  • Banks that meet the minimum capital adequacy ratio but have a CRR of “Above Average” or an NPL ratio of more than 5% but less than 10% shall have dividend payout ratio of not more than 30%.
  • Banks that have capital adequacy ratios of at least 3% above the minimum requirement, CRR of “Low” and NPL ratio of more than 5% but less than 10%, shall have dividend pay-out ratio of not more than 75% of profit after tax.
  • There shall be no regulatory restriction on dividend pay-out for DMBs and DHs that meet the minimum capital adequacy ratio, have a CRR of “low” or “moderate” and an NPL ratio of not more than 5%. However, it is expected that the Board of such institutions will recommend payouts based on effective risk assessment and economic realities.
  • No Bank shall be allowed to pay dividend out of reserves.
  • Banks shall submit their Board approved dividend payout policy to the CBN before the payment of dividend shall be permitted.

We strictly recommend a safe play around the market.

Comment here