April 11, (THEWILL) – A total of 22.45 billion shares turnover was traded in the Nigerian Exchange (NGX) totaling N301.75 billion in the first quarter (Q1) of 2022, data from the nation’s bourse has shown. The figures were gathered from 12 weekly reports published by the NGX during the period, showing the relevant statistics. The three months had four equal weekly reports, though March ended with the trading of April 1, to complete the week of March 25 .
A study of the reports showed that January recorded N158.29 billion from 7 billion shares turnover, while 6.48 shares were traded in February yielding N92.55 billion for the market. For the month of March, 7.68 shares turnover created a value of N98.4 billion.
During the period, the Financial Services sector topped the activity charts followed by the Consumer Goods, the Conglomerates Industry and the ICT sectors.
Market capitalisation gained N3.012 trillion as the market closed positive with N24.322 trillion at the end of the quarter in the last week of March, as against N22.296 trillion at the first week of the month in January. Consequently, the All-Share Index (ASI) also recorded a positive market closure of 4,249 basis points reflecting a 10 percent jump; the quarter opened with an ASI of 42,716.44 to close 46,965.48.
A significant development in the market during the period is the impact of the telecommunications (telecoms) sector. The listing of two telecoms giants, Airtel Africa Plc and MTN Nigeria Communications Plc, altered the fortunes of the equity market. Though not directly in the same sector with ICT, it helped to uplift the market in the ICT-related activities. The ICT sector which had operated in what used to be the obscure dormant stock group over the years, has transformed into the active stock category, going by the Q1 report.
As already stated, data from the Q1 report revealed that ICT joined the league of bouncing sectors (like the Financial Services, the Conglomerates and the Consumer Groups) to drive the equity market into positive territory at the end of the period.
MTN Nigeria Communications Plc was listed on the Premium Board of the NGX by introduction 20.35 billion ordinary shares on May 16, 2019 at N90 per share. Following the successful listing, MTN Nigeria became the first Mobile Network Operator to be listed on the Nigerian Stock Exchange. Airtel Africa Plc was listed on July 10, 2019 with 3.758 ordinary shares at N363 per share.
The two telecom firms are performing outstandingly on the Exchange as MTN remains the largest company by revenue while Airtel shares slot with Nestle as the highest-prices stock on the nation’s bourse. Airtel share price as at Friday, April 8 was N1,260.40 while Nestle is N1,387.70 on the same day.
After 20 years of operation in Nigeria, the two leading telecom companies were given licence in principle to commence Payment Service Bank (PSB) operations, by the Central Bank of Nigeria. The PSB licence empowers the operator to provide financial services through digital means to low-income earners and the unbanked – people that do not use banks or banking institutions for transactions –
According to the announcement, Airtel will operate PSB via its Smartcash Payment Service Bank Limited while MoMo Payment Service Bank Limited will be MTN’s PSB. The essence is to bring more people into the financial inclusion space and reduce Nigeria’s huge population of unbanked.
The development was a huge success to the Financial Inclusion scheme of CBN. It could be recalled that Nigeria failed to meet its National Financial Inclusion Strategy target for 2020 to include 80 percent of its adult population into the financial system. This means that 36 percent of Nigerian adults, or 38.1 million of the country’s 106 million (18 years and above) adults, remain completely financially excluded.
Segun Ogunsanya, CEO, Airtel Africa, said on the occasion of the firms listing, “I am very pleased that Smartcash has been granted an approval in principle to operate a service bank business in Nigeria. We will now work closely with the Central Bank to meet all its conditions to receive the operating licence and commence operations.
“The final operating licence will enable us to expand our digital financial products and reach the millions of Nigerians that do not have access to traditional financial services. I am looking forward to working closely with the Government, the Central Bank and traditional financial institutions to expand financial inclusion and meet the evolving needs of our customers and the economy.
Uto Ukpanah, company secretary at MTN Nigeria, said MTN Nigeria was optimistic that it would eventually get the PSB licence.
“This is the first step in a long process that would lead to eventual approval. In other words, MTN Nigeria would be required to fulfil a number of conditions, even as ‘the decision to issue a final approval is firmly within the regulatory purview of the CBN’,” the statement reads.
“MTN Nigeria expressed optimism that it would eventually get the PSB license, and reaffirmed its commitment to the financial inclusion agenda of the CBN in Nigeria.”
There have been clamour from the financial services sector and the media for the two telecos to be licensed for PSB operations. The CBN granted licences to Moneymaster PSB, a subsidiary of Glo and 9PSB, a subsidiary of 9mobile in 2020. The clamour heightened with the unveiling of the Central Bank Digital Currency, eNaira) by President Muhammadu Buhari on October 25, 2021.
A stock market analyst, Shedrack Benson, said the coming of the telecoms sector to the Nigerian equity market is a huge game changer that will benefit Nigeria, the investors and Africa as a whole.
“The presence of the telecoms firms in the Nigerian stock market is a huge game changer that will benefit the country, the investors and Africa as a whole. With the PSB licence approved for them, it is obvious that the capital market will grow stronger. I can tell you, their presence helped to keep the market on the gaining side as the economy recovers from the effects of COVID-19 which disrupted the economies of the world and created the worst health challenge for mankind, Benson said.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
