NASD OTC Market CAP Increased By 0.34% WoW to Close At N524.64bn

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Friday September 04, 2020 / 09:10 PM / by NASD Plc/ Header Image Credit: NASD Plc


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COVID 19 Impact Series: Aviation Industry

The effects of the pandemic as a result of the outbreak of the coronavirus has been felt globally. As a result, most governments enforced lockdown and travel restrictions within and out of their respective countries. Therefore, the transportation sector as a whole suffered a decline in the level of activity. Nonetheless, the aviation industry, in particular, was affected negatively. One could argue that it has been impacted the most out of all other sectors.

 

The first thing to note is that this industry revolves around the use of aircraft to perform particular services with transportation being the most obvious one. Moreover, the industry can be classified into airlines, aircraft manufacturers, cargo and other services. Therefore, this article will attempt to highlight the impact of the current situation on these three parts to make a general conclusion for the whole industry.

 

Specifically, we see aircraft manufacturers like Boeing and Airbus making projection of their worst recession since the twin tower attacks on September 11, 2001. This is due to the fall in demand for aircraft as a result of the drop in economic activities. These manufacturers project it might take up to 36 months at most for them to completely recover. This also means that revenue projections would not be met and there would be drawbacks that will affect their staff and their livelihood.

 

Moving on, airlines are not immune to this situation. According to the International Air Transport Association Economics Bulletin, the number of global air passengers has seen a terrible nosedive since the virus broke out in late 2019. Also, unforeseen costs have to be covered by these airlines before the resumption of travel. Airlines like Delta, United, Emirates, British Airways and even the local one like Air Peace all have to be innovative in their resumption processes to cater for safety – that is to prevent virus outbreak and minimization of cost to achieve maximum returns.

 

It is obvious at the moment that most governments are trying to reopen their respective countries for both local and international travel by easing restrictions gradually. However, for the period that these restrictions were firm in place, airports and hangars enjoyed contrasting fortunes. On one hand, the hangars experienced an increase in the quantity of aircraft stationery present. This would indicate that there should be increased revenue on their part. In contrast, airports had to cover operating expenses even though air travel was halted temporarily. Thus, the airports had to lay off some staff because of the decline in revenue and flights to and fro.

 

Furthermore, the cargo side of this industry was not left out of the picture. Pre-pandemic, this was the most profitable part of the aviation industry, but as expected this is no longer the case. This is because of the restrictions enforced by the sovereign authorities. Those restrictions have had a ripple effect across the board as global production of commodities followed the same trend as the reduced global demand due to the outbreak of the virus. Thus, if there is a decline in demand from final consumers, hence, the firms will also demand less for the transportation of commodities from one place to another. To put things into perspective, air transport is the fastest means available so it attracts the highest fees among all other means. So, the cargo part of the industry has also been constrained negatively.

 

Finally, the service providers like laundry marts, cattery services, ground handling services and even the demand for aviation fuel also have a share of this bitter pie. As a result of the COVID-19 pandemic, all of these mentioned above have experienced declines in turnover and revenue as at the half-year 2020 compared to the previous year.

 

On the bright side, NASD continues to provide a suitable platform for capital formation and inflow into the aviation industry through the Enterprise Portal (NASDeP) and the Venture Ramp. Thus, they encourage a suitable environment for recovery by encouraging potential aviation industry investors to take viable opportunities in this industry and help them with raising funds to make this a reality.

 

Particularly for Nigeria, this will deepen the industry and promote growth and development from both internal and external sources. This will be done by encouraging liquidity through the sectors of the economy and negotiating with the government to implement macroeconomic policies that can serve as shock absorbers in case of any other unforeseen circumstances in the future. 

 

Year-to-Date Overview 

NASD OTC Securities Exchange Market closed on a positive note YTD as the market recorded an increase in performance. NASD Security Index Year to date return rose by 2.39%. Total volume traded Year-to-Date stands at 7,822,911,433 units in 1066 deals and total Value traded is N10,725,077,859.21.


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Week 36 Overview

 

NASD OTC Securities Exchange closed the week with a positive return on NSI. The NSI return rose by 0.43% to close the week at 714.21 points against 711.15 points against preceeding Friday, August 28 2020.

 

In addition, Week 36 saw NASD Investors gain N2.25 Billion in value. NASD OTC Market capitalization closed at N524.64 Billion compared to N522.39 Billion in the preceding Friday, resulting from a positive movement of prices.

 

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There was a 2.41% increase in the total value traded during the week as week 36 saw NASD Investors trade a total of N5,482,398.00 in value compared to N5,353,298.96 in the previous week. Total trade activity for the year is valued at N10,725,077,859.21.

 

In the same pattern, volume traded during the week was 75,289.00 units compared to 250,906 units in the previous week leading to a -69.99% decrease in trade volume compared to week 35. Total volume traded for the year is 7,822,911,433 units.


Top Traded Securities by Volume

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The week closed with Central Securities Clearing System Plc ranking top among four most traded securities by volume and Niger Delta Exploration and Production Plc as the fourth most traded stock by volume in week 36.


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Top Traded Securities by Values

 

The week closed with FrieslandCampina Wamco Nigeria Plc ranking top among four most traded securities by value and Afriland Properties Plc stood as the fourth most traded Security by Value for the week.

 

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Advancers for the Week 

One of NASD OTC stocks closed the week with a positive movement in price. Central Securities Clearing System Plc, which currently holds a Market Capitalization of N72.5 Billion closes the week at N14.5 representing a 3.57 percent increase from the previous close of N14.


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Decliners for the Week

 

One of NASD OTC stocks closed the week with a negative movement in price. Afriland Properties Plc, which currently holds a Market Capitalization of N2.28 Billion closes the week at N1.66 representing a -9.78 percent increase from the previous close of N1.84.

 

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