UBA plans to issue unsecured offering as telcos rally boosts market performance

United Bank for Africa Plc (UBA) has notified the Nigerian Stock Exchange on the possible issuance of a 5-year fixed rate benchmark USD-denominated Regulation S/144A Senior Unsecured offering, under UBA’s Global Medium Term Note Programme. According to UBA, a mandate has been given to Citigroup Global Markets Limited, Mashreqbank PSC, Renaissance Securities (Cyprus) Limited, Standard Chartered Bank, and United Capital PLC as joint lead managers to arrange a global investor call in addition to a series of fixed income investor meetings (each of which will not constitute a public offer in Nigeria) commencing on November 8, 2021. Furthermore, UBA proposes to redeem its outstanding US$500mn 7.750% 2022 bonds (US91339TAA51 | XS1623828966), in connection with the new bond offering, and would later today announce a cash tender offer for any and all of the outstanding bonds (the “Tender Offer”).

Today, the local bourse commenced the week with its biggest daily gain in 2021 as bullish sentiment on AIRTELAFR (+10.0%), MTNN (+9.6%) and WAPCO (+2.0%) drove the NGX All-Share Index higher by 2.9% to 43,246.87 points. The strong rally in AIRTELAFR and MTNN  came on the back of market reaction to the telco giants securing a payment service banking license (in principle) from the CBN. As a result, market capitalisation rose ₦36.9bn to ₦22.6tn while YTD return improved to 7.4%. Market activity intensified as volume and value traded increased by 72.2% and 69.2% respectively to 443.6m units and ₦5.0bn. STERLNBANK (81.2m units), UACN (67.2m units), and FBNH (42.2m units) topped the volume chart while ZENITH (₦797.3m), MTNN (₦772.2m), and UACN (₦706.4m) led the market by value.

Performance across sectors under our coverage was mixed as 3 indices gained and 3 lost. The AFR-ICT rose 9.8% to lead the advancers, fueled by buy interests in MTNN (+9.6%) and AIRTELAFR (+10.0%). Trailing, the Consumer and Industrial Goods indices gained 0.3% and 0.1% respectively due to price appreciation in UNILEVER (+9.4%), GUINNESS (+1.6%), and WAPCO (+2.0%). Conversely, profit-taking across CUSTODIAN (-9.5%), AIICO (-1.5%) and MANSARD (-1.7%) weighed on the Insurance index which fell by 1.4%. Similarly, the Oil & Gas and Banking indices shed 0.6% and 0.1% apiece following sell pressure on CONOIL (-9.8%), ARDOVA (-3.6%), ZENITH (-0.4%) and GTCO (-0.9%). 
 
Investor sentiment, as measured by market breadth (advance/decline ratio), weakened to 0.7x from 1.9x as 18 stocks advanced while 26 stocks declined.  AIRTELAFR (+10.0%), REDSTAREX (+9.9%), and CUTIX (+9.9%) led gainers while CONOIL (-9.8%), CWG (-9.7%), and CUSTODIAN (-9.5%) led decliners. In the subsequent trading session, we expect the positive sentiment to linger due to sustained interest in the ICT space.

Market Statistics for Monday, 8th November 2021