Welcome to this week’s edition of 4 Customs Street, our weekly newsletter on the stock market.
The newsletter is divided into two parts:
Green White Green is focused on the Nigerian stock market.
Star-Spangled Banner is focused on the US stock market
Green White Green Last Week
The NGX Group (the parent firm of the exchange) announced it had made a significant investment in the Ethiopian stock exchange along with other investors.
The Ethiopian government has a 25% stake, and private investors hold the rest.
Earnings
Champion Breweries’ profit fell sharply from ₦1.4 billion in 2022 to ₦370 million in 2023.
The drop was due to a higher cost of sales (a spike in energy costs) and selling and distribution expenses.
Wema Bank's profit after tax moved up sharply from ₦11.3 billion in 2022 to ₦35.9 billion in 2023. Key drivers were higher net interest income and FX revaluation gains.
Transcorp FY revenue went up by 47.3% from ₦133 billion in 2022 to ₦197 billion in 2023.
Profit after tax rose from ₦17 billion in 2022 to ₦32.6 billion in 2023.
The firm has proposed a 10 kobo dividend, which is miniscule compared to the ₦40 it made in earnings.
Transcorp power gross earnings rose by 57.3% from ₦90.3 billion in FY 22 to ₦142.1 billion in FY 23.
Profit after tax jumped from ₦17.2 billion in 2022 to ₦30.2 billion in 2023.
The firm has proposed a final dividend of ₦3.13.
Green White Green This Week
We will see more companies release their audited FY 23 numbers. eTranzact did so early this morning.
Transcorp Power will hold an earnings call this Thursday at 1pm.
Star-Spangled Banner Last Week
The S&P 500 (an index comprising 500 of the biggest companies in the United States equity space) had its worst weekly performance for the year, declining by 1% to 5,204.
The key factor behind this was strong jobs data, which means the US Fed (central bank) is less likely to lower interest rates. Lower interest rates are great for stocks.
Non-farm payroll numbers for the previous month show the economy added 303,000 jobs vs 202,000 expected. The unemployment rate was essentially flat, at 3.8%.
Star-Spangled Banner This Week
The earnings season kicks off this week. It is called a season because many companies drop their financials at the same time.
While Delta Air comes first, all eyes will be on the three Musketeers: JP Morgan Chase, Wells Fargo and Citigroup. People pay close attention to banks because they are close to the pulse of spending. The United States is a highly consumer-driven economy.
On a stand-alone basis, all three firms play a systemic role. They're large banks.
JP Morgan Chase is the biggest bank in the United States. CEO Jamie Dimon is pretty blunt during the calls. He also has a huge dislike for Bitcoin (hopefully, there will be no questions on that).
Wells Fargo is the third-largest bank in the United States by assets.
Citigroup is engulfed in a turnaround process that has lasted almost a decade. It is the 4th largest bank by assets.
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