Investors Expect Reduced Profit Taking On Expected Payout, Q1 Earnings Surprises

Nigeria equity market in the past week had a mixed performance to close marginally higher, while trying to resist further decline that had beclouded it in recent months on the strength of expected Q1 earnings and positive economic data. There is also the effect of the geopolitical uncertainties surrounding the coming 2019 general elections that had been of great concerns in a market dominated by foreign investors.
The 2018 Q1 earnings reporting season kicked off with during the week, with Forte Oil making available its Q1 result to the market after trading had closed last Friday. More scorecards are expected between now and month-end as listed companies keep to their post-listing requirement that gives listed companies 30 days after the end of quarter to release their Q1 earnings reports or face sanction.

The positive news of a sharp decline in March inflation rate to 13.34% from the February’s 14.33%, which is below the Nigeria’s benchmark Monetary Policy Rate (MPR) has supported the recovery recorded in this period. The market recorded its first back-to-back gains in April to close higher on low volume traded and increasing demand for stocks within the week. The continued decline in consumer price index since April 2017, has resulted in inflation hitting a 23-month low, to reveal the impact of monetary stimulus on the economy as the Central Bank of Nigeria (CBN) intervention continues to support liquidity in the foreign exchange market, ensure a relatively stable exchange rate that keeps sustain inflows into the system.

Election Uncertainties
Despite, the uncertainties around the coming 2019 general elections when there is expected to be huge political spending that will boost company numbers and support share prices, the prospects look very good for positive surprises, as earnings reports pick up. Investdata however conservatively estimates 10% Q1 earnings, but factoring in the propensity for positive surprises in historical earnings reports, some analysts expect 13% Q1 earnings growth, which is seemingly ambitious. It is expected to continue through the year, with the 15% estimated earnings growth for Q2, 17% for Q3 and 20% growth for Q4.
Given that improving purchasing power and recovery economy are the fundamental drivers of impressive numbers, we have seen so far and the expected future results, if all things remain equal.

The declining inflation and money market rates in a low yield fixed income environment is likely to trigger more inflow into the equities market as average dividend yields are looking up and many of the stocks are trading below their intrinsic value. This situation is therefore offering traders and investors a high margin of safety.

Week High, Low
Meanwhile, the NSE’s All-Share index retraced up after touching the week low of 40,206.10 basis points and a high of 40,961.20bps, resisting the 40,000-psychological line that recently became another strong support level before closing the week at 40,928.7bps from an opening level of 40,841.14bps, on a lower traded volume and positive market sentiments.

The upbeat performance witnessed around developed markets of the world over the period were due to rebound of oil price as it hit a three-year high at $71.96 per barrel, despite the geopolitical tension and security challenges arising from Syrian war and chemical attack. The reducing possibility of trade war between the world’s largest economies, had boosted positive sentiments for equities around the world as European and Asian market indices increased, a situation that also spread to emerging and frontier markets.
Back home, the week’s market technicals was strong but mixed, with the low traded volume on negative market breadth and strong buying pressure of 96%. Selling volume was 4% of the week’s total transaction, to halt the bear run, as money flow index continues to point downward at 42.07bps.

The All Share Index for the period gained 87.56 bps to close at 40,928.70 bps, representing 0.21% growth from the opening point of 40,841.14. Similarly, market capitalisation s increased by N30.72bn to close at N14.78tr from its opening value of N14.75tr, also representing a 0.21% value gain.
The up market during the period was attributed to rekindled interest in low, medium high cap stocks that had suffered losses before now, just as those that were adjusted for dividend. Consequently, the market has become attractive, when the strong earnings powers of listed companies is considered. Buying positions were with particular attention on Cement Company of Northern Nigeria (CCNN), Double One, Learn Africa and Oando, as well as second tier banking stocks, among others.
The NSE’s year-to-date returns therefore inched to 7.02%, even as market capitalisation growth for the period stood at N1.14tr, representing 8.40% gain from the year’s opening value.

During the week, low and high cap stocks were dominant on the advancers table, particularly those with high dividend payouts and low-price attractions. Transactions were driven by activities in the financial services, consumer goods and oil/gas sectors, even as market breadth was negative with decliners outnumbering advancers in the ratio of 38:37 on a low volume of trades.

The composite NSE index opened the week on a bearish note, a trend that was extended from the previous week, but reversed on Tuesday when it gained 0.17%, a situation that was sustained at the midweek with another gain of 0.90%. This could not be sustained on Thursday as it shed 0.10% and rebounded on the last trading of the week with a gain of 0.28%, bringing the week’s total gain to 0.21% as the market expects impressive Q1 numbers.

Sector indexes for the week had a mixed performance as the NSE Industrial and NSE Oil/Gas were in the green, while others closed in the red except for NSE AseM that was flat.
Market activities in volume and value were down by 19.77% and 26.05% to 1.42bn shares worth N19.64bn, from previous week’s 1.77bn units valued at N26.56bn.

The best performing stocks for the period were Learn Africa and Double One, which topped the advancers table with 18.89% and 17.65% gains respectively to close at N1.15 and N200 per share, on the back of their high Dividend Yields and expected Q1 earnings results. The worst performing were C & I Leasing and Consolidated Hallmark Insurance that fell 18.02% and 14.71% to close at N1.43 and N0.29 respectively to profit taking.
During the week also, the share prices of Access Bank, FCMB, UBA and Custodian Allied Insurance were adjusted for dividend recommended by their directors.

Market Outlook
We expect sustained upturn in the market on the strength of low price attractions of fundamentally sound stocks, ahead of first quarter economic data and Q1 earnings that will further reveal the true state of the economy and listed companies so far in 2018, helped also by the sustained rise in oil prices
Meanwhile, dividend income players are take position ahead of more economic data, even amidst the expected sustained volatility and repositioning.

However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is approaching.
We advise investors to allow numbers guide their decisions while repositioning for the rest of the year’s trading activities, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.

Fundamental, Technical Tools
It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.

Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the INVEST 2018 traders and the investors’ summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.

Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.
Big thanks to all participants and all that supported to make the Abuja stock market trading workshop a success.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
http://investdata.com.ng/2018/04/investors-expect-reduced-profit-taking-expected-payout-q1-earnings-surprises/

Thank you for your Time.

I want to express my sincere gratitude to all those who came to the The Power of Fundamental and Technical Analysis In Protecting your Capital In Pre-Election Year and Beyond not only because they showed up but due to the fact that take burned all bridges of doubt and failure to attend. That is, many traveled down to attend the seminar.

In addition, they also had fears and doubts about this bearish season but they understood that it is better they equipped themselves than to assume because they understand that plan fail for lack of counsel but with many advisers they will surely survive.

For those that did not attend, I want to congratulate you too because all is not lost. I really understand why you did not attend which are normal things in our everyday life i.e

-doubt,
-inaction,
-indecision,
-comfort zone,
-not willing to take risk,
-low resistance
-distance

Once more thank you for attending my summit and to those who did not attend.


What is the difference between market order and limit order?

Market orders are transaction meant to execute as quickly as possible at the present market price.
Conversely, a limit order is setting the maximum or minimum price at which one is willing to buy or sell.

A market order deals with the execution of the order at the current available market price,the price of the stock is secondary to the speed of completing the trade.
Limit orders deal primarily with the price, if the stock's value is currently resting outside the parameters set in the limit order, the transaction does not happen.

Investdata Academy

Happy Trading,
Ambrose Omordion
http://investdataltd..com/2018/04/thank-you-for-your-time.html

All Eyes On Q1 Earnings, Economic Data, Low Equity Valuation, For Price Reversals


Trading on the Nigerian Stock Exchange for the week on Monday was yet another bad session, as the benchmark All-Share index opened with a gap down that continued all morning, even as analysts hope that the numbers from the Q1 earnings season and the low valuation of stocks in the market would result in reversal in the coming days.
By midday, it tried to rally, got right to the breakdown point, at resistance and rolled over only to make lower lows. This resulted from losses suffered by high cap stocks and particularly, the N10.50 price adjustment of Dangote Cement Plc, the market’s most capitalized equity for the dividend recommended by its directors for the year ended December 31, 2017.

The release of Q1 earnings reports is expected to boost a pick-up of the NSE indicators this week. The results are likely to support the reversal attempt that was suppressed by Monday’s pullback, which may not last, once the anticipated Q1 numbers start hitting the market, serving as the needed catalyst to stop the ongoing price decline and sell off in the market.
The driver will be positive surprises, considering the prevailing low stock valuations, which is what market watchers are looking onto as the week unfolds.
From the just concluded 2017 earnings season, remember we have corporate earnings that are forecast to grow about 15% this year, despite being a pre-election year, due to the expected increasing political spending that will further boost consumption. This factor is expected to sustain the ongoing economic recovery that and lead it onto the path of growth and development, notwithstanding some uncertainties that come with the general elections.

The falling rates in the money market, as well as the rising oil prices should be a plus for stocks, especially now that Nigerian equities are cheap and undervalued. Last week, we saw for the first time in April that stocks are getting ready for reversal which we believe positive Q1 earnings and economic data would support.

Meanwhile, market technicals on Monday were weak and mixed as volume traded was low on a strong buying pressure, positive market breadth and improved sentiments. Buying position was 79% and selling volume, 21% on a volume index of 0.40 of the day’s total transactions. Money flow index is looking down at 44.78 point from the previous day’s position of 48.72 points, which is an indication that funds are gradually leaving the market again.

Index and Market Cap

The All Share Index shed 395.33 basis points, closing at 40.533.37 basis points after opening at 40,928.70 bp, representing a 0.97% decline on a low volume that was higher than the previous day’s. Similarly, market capitalisation for the day was went down by N132.8bn to close at N14.64tr from an opening value of N14.78tr, also representing 0.97% value loss.
The day’s downturn was due to losses suffered by medium and high cap stocks, like Dangote Cement, NB, Double One, Presco and Access Bank. This impacted negatively on the NSE’s Year-to-Date returns, which contracted to 5.99%, just as market capitalisation gains for the period dropped to N1.03tr, representing 7.58% above the year’s opening value.

Mixed Sectoral Indices
Sectoral performance for the day was mixed as the NSE Industrial Goods, Banking and Oil/Gas were up due to price appreciations in Zenith Bank, UBA, Seplat, Oando and Lafarge Afrca, while other sectors closed in red.
Market breadth for the day was positive as advancers outnumbered decliners in the ratio of 26:20 despite the halt in the up market.
Market activities were up in volume and value by 15.42% and 53.3% respectively to 192.5m shares worth N3.13bn from the previous day’s 146.12m units valued at N1.54bn.

Transaction volume was boosted by financial services and oil stocks like GTBank, Japaul Oil, Fidelity Bank, Zenith Bank and UBA, which witnessed increased trading to top the activity chart.
Skye Bank and Oando were the best performers for the day, topping the advancers’ table after gaining 10% and 9.4% respectively to close at N0.88 and N7.55 each. This was due to market forces and sentiment.
On the flip side, UACN Property Development Company and Double One were the worst performing, after losing 7.90% and 5% to close at N2.58 and N190.00 respectively on profit booking and market forces.

Market Outlook
We expect a reversal on the strength of low valuation amidst ongoing volatility and portfolio realignments, ahead of Q1 scorecards and economic data. Even so, value investors continue to position for the short and long-term on the strength of company fundamentals.
However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is ongoing and Q1 results are expected in the market arena.

We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.
It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.

Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the Chart Summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.
Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.
Big thanks to all participants and those who made last weekend’s Abuja Stock Market Trading Workshop a huge success. We are grateful and believe all you learnt will enhance your knowledge and transform your investing strategies for profitable returns going forward.
Again, from the INVESTDATA team, we say a big thank you.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467

Photo caption: From left to right, Ms. Tinuade Awe, Executive Director, Regulation Division, The Nigerian Stock Exchange (NSE); Michel Puchercos, Group Managing Director/CEO, Lafarge Africa Plc; Oscar Onyema, Chief Executive Officer, NSE; Tony Elumelu, Chairman, United Bank for Africa (UBA) Plc; A.B.C. Orjiako, Chairman, Seplat Petroleum Plc; Mrs. Mosun Belo-Olusoga, Chairperson, Access Bank Plc; Mobolaji Oludamilola Balogun, Chairman, Lafarge Africa Plc; Herbert Wigwe, Group Managing Director/CEO, Access Bank Plc; Austin Avuru, Chief Executive Officer, Seplat Petroleum Plc; Kenedy Uzoka, Group Managing Director, UBA Plc during the Closing Gong Ceremony in commemoration of NSE Premium Board migration at The Exchange on Monday.

http://investdata.com.ng/2018/04/eyes-q1-earnings-economic-data-low-equity-valuation-price-reversals/

Low Valuations, Expected Economic Data Spur Demand For Nigerian Equities


Nigeria’s stock market on Tuesday witnessed increased demand for stocks ahead of Q1 numbers resulted from the prevailing low valuations that had attracted foreign and local investors to trade huge volume in banking stocks. They were lured, as Investdata has continuously noted in the past, by the high margin of safety based on the intrinsic value of listed equities on the exchange, at a time Money flow index dropped to 32.79 points from previous day’s 44.78 points. This is an indication that funds are leaving the market.
It was a very volatile session, but huge rally that started with a gap down as trading opened, a situation that lingered till midday before the market reversed on the back of heavy volume. There was stronger positive sentiment that pushed intraday highs to 40,862.01 by the afternoon from lows of 40,409.90, before closing at 40,788.68 in the last five minutes of trading.

This was also helped by money market rate and bond yield that remain south ahead of the expected easing of the benchmark Monetary Policy Rate (MPR) when the Monetary Policy Committee (MPC) meets in the nearest future. Before then, stock prices are likely to head north, especially as the market expects inflow of earnings surprises from the Q1 scorecards that have started trickling in. The numbers are expected to further test the positive economic data emanating and anticipated from the National Bureau of Statistics (NBS) and Central Bank of Nigeria (CBN).
Market technicals for the day were positive and strong as volume traded was high on a strong buying pressure, positive market breadth and improved sentiment with buying position of 84%, while selling volume was 16% on a volume index of 3.52 of the day’s total transaction.

Index and Market Cap
The composite All-Share Index gained 255.31 points to halt previous day’s down market, closing at 40.788.68 basis points after opening at 40, 533.37bp, representing a 0.63% growth on a huge volume that was higher than the previous day’s. Similarly, market capitalisation for the day rose by N92.22bn to close at N14.73tr, from N14.64tr, also representing 0.63% value appreciation to reduce the losing position of investors.
The upturn recorded was attributed to price rally in low, medium and high cap stocks which impacted positively on the NSE’s Year-to-Date returns, which stood at 6.66%, just as market capitalisation gains for the period stood at N1.07tr, representing 8.12% returns from the year’s opening value.

Bullish Sectoral Indices
Sectoral indices were bullish, except for the NSE Insurance index that closed red. The Banking, Industrial, Consumer and Oil/Gas were up, due to price appreciation in Zenith Bank, UBA, Seplat, Oando, Nestle, Nigerian Breweries and Lafarge Afrca.
Market breadth for the day was remained positive as advancers outnumbered decliners in the ratio of 33:18 to halt Monday’s down market.
Market activities were up in volume and value by 732.4% and 248.9% respectively to 1.6bn shares worth N10.91bn, from the previous day’s 192.5m units valued at N3.13bn.

Transaction volume was boosted by financial services and oil stocks like FCMB, UBA, Zenith Bank, Access Bank and Japaul Oil, which witnessed increased trading to top the activity chart.
Unity Bank and Oando were the best performers for the session, topping the advancers’ table after gaining 9.5% and 9.2% respectively to close at N1.27 and N8.28 each. This was due to market forces and sentiments, as investors positioned in the stocks in hope of their earnings release.
On the flip side, C&I Leasing and Fidson Healthcare were the worst performing, after losing 5% each to close at N1.33 and N5.51 respectively on profit booking and market forces.

Market Outlook
We expect the uptrend to continue on the strength of low valuations amidst ongoing volatility and portfolio realignments, ahead of more Q1 scorecards and 2018 Q1 GDP data. Even so, value investors continue to position for the short and long-term on the strength of company fundamentals.
However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is ongoing and Q1 results are expected in the market arena.
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.

It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.

Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the Chart Summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.
Comprehensive training materials on Stock Trading and Investing for Financial Independence series are available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

We say a big thank you to all participants and all who assisted to make the Abuja stock market trading workshop a success. We are grateful and believe that what you learnt will enhance your knowledge and transform your investing strategies, while ensuring profitable returns.
Again, we say thank you.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
http://investdata.com.ng/2018/04/low-valuations-expected-economic-data-spur-demand-nigerian-equities/#more

World Bank Group Raises $1.5bn In Maiden IDA Bond For Poorest Nations


The International Development Association (IDA), on Tuesday launched its first bond in its nearly 60-year history, raking in $1.5bn from investors around the globe.
The triple A-rated asset and support life-changing instruments for investments in some of the most pressing development issues among the world’s poorest countries.

IDA provides technical expertise and low-cost financing for projects and programmes that boost economic growth and reduce poverty in the world’s poorest countries— from tackling conflict, fragility and violence; forced displacement; climate change; and gender inequality to promoting governance, institution building, creating jobs and supporting a strong private sector for economic transformation.

A statement by the World Bank Group noted that until now, IDA has been virtually unleveraged, building up an unparalleled equity base of US$158 billion.
In 2016, IDA shareholders agreed to transform IDA’s financing model, leveraging its strong capital base to pioneer a new model for development finance that combines donor funding with funding raised in the capital markets. IDA’s borrowing program will enable IDA to significantly scale up its support toward achieving the Sustainable Development Goals, while offering investors an efficient way to contribute to global development.

The statement quoted World Bank Group President Jim Yong Kim as saying the “bond issue will allow IDA to tap into the power of capital markets to tackle some of the world’s biggest challenges and help millions lift themselves out of poverty.
“While it is a new bond issuer, IDA is an established institution, with an almost 60-year track record as the leading source of development finance and expertise for some of the fastest growing economies in the world. As a borrower, it leverages its unrivaled capital position – the largest equity of any multilateral development bank – and decades of strong donor support, a solid track record of repayments, and prudent financial management.”

World Bank Group Managing Director and Chief Financial Officer, Joaquim Levy described the inaugural bond issuance as “a landmark in mobilizing capital for development finance. By leveraging the balance sheet and the significant achievements of IDA for the first time, we are delivering shareholders value for money, opening new investment opportunities in the fixed income space and, most importantly, scaling up IDA’s ability to have an impact where it makes the greatest difference.”

For the group’s Vice President and Treasurer Arunma Oteh, “IDA received a resounding response from the market for its debut issuance. Investors globally seized the unique opportunity to be the first to invest in IDA’s triple-A rated bond and make a positive impact in the lives of hundreds of millions of people around the globe. I want to thank investors, lead managers and all the bankers for their personal engagement and commitment to making IDA debut such a fantastic success. As we grow IDA’s borrowing program, we will continue to ensure a strong financial condition and prudent financial and operational management for IDA. We will also continue to put to work for IDA the World Bank Treasury’s 70-year track record of innovation in connecting capital markets with development.”

World Bank Vice President for Development Finance Axel van Trotsenburg said: “Three years ago, the international community agreed that business as usual is no longer enough for development finance, and committed to leveraging aid balance sheets, scaling-up, and raising more capital to help the poorest countries achieve Sustainable Development Goals (SDGs) by 2030. IDA’s historic entry into the global capital markets, with its first issuance of an IDA bond today, represents a transformational shift responding to shareholder ambitions, development needs, and investor requirements.

http://investdata.com.ng/2018/04/world-bank-group-raises-1-5bn-maiden-ida-bond-poorest-nations/#more

Fuel Retailing, Power Segments Lift Forte Oil Profit To N2.96bn


The board of Forte Oil Plc, on Monday presented its unaudited financials for the first quarter ended March 31, 2018, indicating that profit before and after tax rose at a faster pace than revenue for the period, helped by fuel retailing, power segments.

According to the result, revenue increased by 20.63% from N33bn in the corresponding period of 2017, to N39.811bn, with retailing of fuels remaining its golden egg, after contributing N2.5848bn to revenue, up from N22.765bn in the first quarter of 2017. It was followed by power generation with N10.071bn, up from N6.532bn; and N3.453bn from lubricants and greases, compared to N3.237bn, while production chemicals and solar system remained small segments of the business.

Cost of sales increased by 21.35% to N33bn, from N27.2bn, with fuels gulping all of N23.989bn from N20.142bn; ahead of N6.009bn from power generation (4.164bn in 2017); and N2.764bn from lubricants and greases, up from N2.645bn. These left gross profit of N6.802bn, up by 17.22% from N5.803bn.

Other income suffered a sharp 54.12% decline to N297.282m from N647.896m, with the bulk of N157.848m, being freight income on 100 trucks owned by the company and managed by various logistic companies, compared to N61.668m; followed by dividend received of N90m from Forte Upstream Services Limited, one of its subsidiaries (nil in 2017Q1); ahead of the N53.113m foreign exchange gain from sale of US$ inflows, which represented a significant slide from N499.877m in 2017.
Distribution expenses rose to N593.848m, representing an 18.41% rise over the N501.521m in the prior Q1; administrative expenses crawled 8.46% up from N2.322bn to N2.126bn; resulting in operating profit of N4.379bn, which represented a 20.76% improvement over the N3.626bn reported in the corresponding period of 2017.

Finance income was flat at N533.682m, as against the previous N563.586m, out of which interest income on bank deposits rose to N221.602m from N214.034m; other income fell from N236.044m to N198.572m, while income from government grant on loan stood at N113.508m.
Finance cost dropped to N1.747bn from N2.14bn, with interest on medium term bond rising slightly to N422.247m from N417.239m; interest expense on bank loans and overdrafts was the bulk at N1.325bn, a drop from N1.723bn; leaving net finance cost of N1.214bn, a 23.02% drop from N1.577bn.

Profit before tax stood at N3.165bn from N2.049bn. A tax expense of N202.917m, up by 22.79% from N165.258m in the 2017Q1, left profit after tax at N2.962bn, as against the previous N1.884bn; translating to Earnings Per Share of 41 kobo, a 24% drop from the previous 54 kobo.

http://investdata.com.ng/2018/04/fuel-retailing-power-segments-lift-forte-oil-profit/#more

GTC ORDER


Do you know what a GTC order is?

GTC simply means Good Till Cancelled. A good till cancel order is an order placed by an investor/ trader to buy or sell a stock at a specified price,of which the price remains active until it is either canceled by the investor/ trader or the trade is executed.
It offers an alternative to placing a sequence of day orders which expires at the end of each trading day.

GTC orders are commonly set to expire within a week to a month after trade are entered on the floor of Nigeria Stock Exchange.

Simply put, GTC orders provide investors/traders the convenience of placing orders at specified price points,which can also be referred to as limit orders,that remains in force until they reach an expiration date, either they are executed or are canceled. These orders can be entered to buy or sell stock, or as stop orders.

Investdata Academy
https://investdataltd..com.ng/2018/04/gtc-order.html

Support and Resistance




Support and Resistance are technical words used in technical analysis in stock, forex, commodities etc.
Support and Resistance is a concept that the movement of the price of a stock will tend to stop and reverse at certain predetermined price levels. These levels are denoted by multiple touches of price without a breakthrough of the level.

Support levels are where demand is perceived to be strong enough to prevent the price from falling further, while resistance levels are prices where selling is perceived to be strong to prevent prices from rising higher.

Support and Resistance levels are psychological important levels where a lot of buyers and sellers are willing to trade the stock.
When trend lines are broken, the market psychology shifts and new levels of support and resistance are established.

Investdata Academy.
https://investdataltd..com.ng/2018/04/support-and-resistance.html

Investdata Corporate Actions For Week Ended April 20, 2018

http://investdata.com.ng/2018/04/investdata-corporate-actions-week-ended-april-20-2018/#more

Investdata Price & Earnings Tracking For Week Ended April 20, 2018

http://investdata.com.ng/2018/04/investdata-price-earnings-tracking-week-ended-april-20-2018/#more

World Bank Approve $13bn Fresh Capital For IFC, IBRD To Fight Global Poverty


Rising from a wrap-up gathering of its 2018 spring meeting in Washington D.C., shareholders of the World Bank Group, on Saturday endorsed an ambitious package that includes a $13bn paid-in capital increase for the fight against global poverty.

This is among a series of internal reforms and set of policy measures to strengthen the International Finance Corporation, the International Bank for Reconstruction and Development (IBRD), two global poverty fighting institution, thereby scaling up assistance in areas of the world in need of assistance.

The package agreed by the Development Committee of the Board of Governors, according to a statement by the group, consists of $7.5bn paid-in capital for IBRD and $5.5bn for IFC, through both general and selective capital increases, as well as a $52.6bn callable capital increase for IBRD.
The boost in capital will be augmented by a broad range of internal measures including operational changes and effectiveness reforms, loan pricing measures, and other policy steps to create an even stronger World Bank Group, the statement added.

The agreed capital package for IBRD and IFC, the group said, builds on the strong commitment of contributors to IDA, as demonstrated in the IDA18 replenishment, the successful launch of IDA in the capital market, and strengthened MIGA financial capacity.
With Saturday’s move, the combined financing arms of the World Bank Group are expected to reach an average annual capacity of nearly $100bn between financial year 2019 and 2030, benefiting all Bank Group members across the income spectrum.
Commenting on the decision, World Bank Group President Jim Yong Kim noted that “through the historic agreement endorsed today, our shareholders have clearly demonstrated a renewed confidence in global cooperation, and we greatly appreciate this strong support from our member countries. This boost in capital was essential for us to advance our efforts to mobilize additional finance for development to meet the aspirations of the people we serve.

“Our shareholders have asked the Bank Group to step up our leadership role in addressing the multiple overlapping challenges of our time, and this capital package allows for greater responsiveness to risks to global stability and security, particularly in poorer countries and fragile states.”
The package endorsed by the Development Committee follows through on shareholders’ commitment for the World Bank Group to better assist all client countries in addressing global challenges while deploying scaled-up assistance to areas that most need financing.
The statement noted also that across client groups, the World Bank Group will be able to support drivers of long-term sustainable growth—including investments in human capital and resilience. The package also puts forward a robust commitment by the World Bank Group to further strengthen its operational model and effectiveness.

The Development Committee also accepted the recommendations of the Shareholding Review completed earlier this year, including a Selective Capital Increase (SCI) for IBRD which will result in rebalanced shareholding and reduce extreme under-representation while continuing to deliver increased voice and representation for emerging markets and developing economies in manageable steps.
“The recommendations also included an SCI for IFC, which will result in a more closely aligned voting power between the institutions of the World Bank Group and will contribute to the IFC capital increase,” the statement added.

Also, the “shareholders reiterated their commitment to the twin goals of ending extreme (global) poverty and boosting shared prosperity and to the four key priorities that the World Bank Group’s Forward Look established: (i) stay engaged with all clients; (ii) lead on the Global Public Goods agenda; (iii) mobilize capital and create markets; and (iv) continually improve effectiveness and the internal operational model.”
The Development Committee communiqué noted the challenging environment in which the package was endorsed: “The capital package has been developed against the backdrop of a changing and increasingly complex development landscape.

Despite impressive gains in recent decades, development progress remains uneven. Keeping up the pace of past progress and addressing emerging challenges will require sustained effort in the face of persistent global headwinds and structural changes to the global economy.”
The Development Committee welcomed the successful conclusion of the negotiations on the financial and policy package, and have asked the Board and management to submit draft resolutions to Governors by the end of June for approval by the Annual Meetings 2018.

http://investdata.com.ng/2018/04/world-bank-approve-13bn-fresh-capital-ifc-ibrd-fight-global-poverty/#more

Global Economy: Nigeria, Others Face Challenge Of Sustainable Growth- World Bank

Photo Caption: Minister of Finance, Mrs. Kemi Adeosun (left); the UK Chancellor of the Exchequer, Rt. Hon. Philip Hammond and Minister of Finance, Malta, Edward Scicluna, during the 2018 IMF-World Bank Spring Meeting in Washington DC which focused on sustainable growth, on Saturday, 21st April, 2018.

Given the structural changes to the global economy, the World Bank Group, on Saturday warned that developing economies, including Nigeria may be challenged with keeping pace with robust and sustainable growth and global development trajectory in the near term.

In a communiqué issued at the close of the institutions’ Spring Meetings in Washington D.C., by its Development Committee, a ministerial-level forum, of the World Bank Group and the International Monetary Fund, nonetheless assured that it “is uniquely placed to address global challenges and help countries achieve their goals in today’s increasingly complex development landscape.”



The communiqué, while stressing support for the group’s twin goals of eliminating extreme poverty and boosting shared prosperity, urged the group to strengthen its financial capacity and meet the aspirations of its shareholders.

World Bank Group President Jim Yong Kim, in his remarks at the press conference that opened the Spring Meetings, also highlighted the financial strengthening of IDA, the World Bank’s fund for the poorest countries, through an inaugural bond issue that raised $1.5 billion from investors around the world this week.

According to him, “IDA’s entry to the global capital markets is historic – the latest transformational shift in how we approach development finance. IDA will be able to dramatically scale up financing to help countries meet the 2030 development goals, and deliver greater value to shareholders.”

Both the committee’s communiqué and Kim’s speech at American University prior to the meetings emphasized that the group must continue to crowd in private sector resources for development, as the main driver of investment, innovation, and jobs.

The committee called on the World Bank, IFC, and MIGA to collaborate for mobilization of private investment as part of maximizing finance for inclusive growth and poverty reduction.

Kim also underscored the importance of building human capital as the foundation for long-term development progress in the Bank Group’s client countries. At the upcoming Annual Meetings, scheduled for October in Indonesia, the Bank Group will release an index measuring countries’ human capital to help inform government leaders’ decisions on investments in health and education.

While acknowledging a range of pressing challenges to sustainable growth for developing countries – a rise in public debt levels for low-income countries, climate and disaster risks, and major gaps in gender equality, among others – the committee reiterated its support for the group’s role in building global solutions.

In his speech, Kim noted that optimism has defined the vision of the World Bank Group from the outset. He quoted U.S. Treasury Secretary Henry Morgenthau, who stated the new organization’s objective at the Bretton Woods Conference in 1944: “A dynamic world economy in which the people of every nation will be able to realize their potentialities in peace, to raise their own standards of living and enjoy increasingly the fruits of material progress. For freedom of opportunity is the foundation for all other freedoms.”

http://investdata.com.ng/2018/04/global-economy-nigeria-others-face-challenge-sustainable-growth-world-bank/#more

Traders, Investors Adopt Wait-And-See Attitude, Ahead Of Regulatory Deadline


Trading on the Nigerian Stock Exchange in the past week was mixed, closing lower as investors, analysts and traders adopted a wait-and-see approach to the expected Q1 numbers that had started to roll in with mixed performance, as they take their time to digest the reports, while expecting others.

While we the wait-and-see attitude continues, we note here that some of the earnings reports beat market expectations, while others came flat and even below forecast which made the week’s trading highly volatile. Besides the high number of companies whose share prices were adjusted for dividend payment within the period, contributing to the market closing lower despite the high volume traded and buying pressure during the week.

The relatively stable exchange rate of the Naira against other currencies of the world, helped by the continued intervention of the Central Bank of Nigeria (CBN) in the FX market will continue to impact positively on productivity and attract inflow of investments. Add this to the impact of the rising oil prices and production volumes, which have led to improvements in fiscal revenue and foreign exchange liquidity.

At the same time, the International Monetary Fund (IMF) expects growth to expand to 2.1% from 0.8% and Investdata Consulting believes that with oil price hitting three-year high at $73.82, it will sustain the current recovery and remain a major driver of the expected growth in 2018.
Oil sector low-base-push will likely last till Q42018, particularly given that oil production disappointed in Q42017 and new barrels are expected from Total’s Egina field by Q42018. Whilst structural constraints to non-oil sector growth –recurring energy scarcity, weak infrastructure and port congestion remain headwinds. We note that the cyclical challenges will start to abate from 2018 against the backdrop of anticipated expansion in fiscal spending as fiscal balance stabilizes and political parties spend ahead of the election. Further deceleration of the nation’s inflation rate will directly affect GDP price deflator and support real growth and increase in private investments due to favourable aggregate demand outlook.

Meanwhile, last week the composite NSE All-Share Index shed 113.81 points to close the period at 40,814.89 from an opening figure of 40,928.70 points, representing a 0.28% decline on a high volume of trade, compared to the previous week’s level. The volume index of total transactions for the week was 1.23, buying pressure of 67%, while selling volume was 33% to reverse the previous week’s marginal gain. In the same vain, market capitalisation for the period lost N41bn to close lower at N14.74tr from N14.78tr, representing a 0.28% loss of value.

The week’s advancers’ table was dominated by low and medium cap stocks as investors focus on value and growth stocks in expectation of their Q1 scorecards as economic fundamentals become even stronger. The losses suffered by Dangote Cement, Nigerian Breweries, Double One and others during the period further reduced the NSEASI’s year to date return to 6.72%, just as the gain in market captalistion dropped at N1.12tr, representing 8.16% growth from the year’s opening value.

Market breadth for the week was positive and strong as the number of advancers outpaced decliners in the ratio of 36:33 on high volume of trades that were mixed, owing to improving demand for stocks. This is coming at a time when many companies are yet to release their Q1 results, thereby becoming a source of concern for the investing public who suspect that numbers may eventually be mixed or better than expected to reflect the improving economic indices.

It is worrisome that many banks are yet to make their first quarter earnings reports available to the market, considering that some are yet to release 2017 full year results six trading days to the end of the 30-day deadline granted under the same post-listing rule of the exchange.
The week opened with the composite NSE All-Share index (ASI) shedding 0.97% to halt the uptrend of the previous week, but reversed on Tuesday when it gained 0.78%, a situation that was short-lived at the midweek with the pullback of 0.04%. This could not be sustained on Thursday as it reversed up by 0.25% but shed 0.14% on the last trading of the week, bringing the week’s total loss to 0.28% as the market awaits more Q1 numbers.

The week’s sectorial indices were bearish and mixed, with the NSE Industrial, Insurance and Consumer Goods, closing in red, whereas the NSE Banking and Oil/Gas were in green, helped by gains in the share prices of UBA, Zenith Bank, Guaranty Trust Bank, Seplat and Oando to impact the sectors positively.
Market activities in volume and value were up by 111.97% and 54.28% as 3.01bn shares worth N30.3bn were exchange, from previous week’s 1.42bn units valued at N19.64bn.

Oando and Jaiz Bank were the best performing stocks for the week, topping the advancers’ table with 39.13% and 21.13% gains respectively to close at N9.60 and N0.86 each, on the back of market sentiments. On the flip side, the worst performing were AG Leventis and 11 Plc that lost 14.06% and 14% to close at N0.55 and N172.00 respectively, owing to profit taking.

During the week also, the share prices of Dangote Cement, Unilever, National Salt, Continental Reinsurance and Transcorp were adjusted for dividend recommended by their directors.
Stocks scheduled for markdown in the new week are: Law Union, Caverton, GSK, AXA Mansard Insurance, Dangote Flour, Lafage Africa, as well as May & Baker

Market Outlook
We expect an upturn in the market on the strength of low valuations, expected numbers to beat expectations as bargain hunters take advantages low prices, ahead of first quarter economic data and corporate earnings that had started trickle in to reveal the true state of the economy and the companies so far in 2018, helped also by the sustained rise in oil prices that hit its highest in three-year at $73.82 as at last Friday.

Meanwhile, dividend income players are take position ahead of more economic data, even amidst the expected sustained volatility and repositioning.
However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is approaching.
We advise investors to allow numbers guide their decisions while repositioning for the rest of the year’s trading activities, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.

It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.

Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the INVEST 2018 traders and the investors’ summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.

Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
http://investdata.com.ng/2018/04/traders-investors-adopt-wait-see-attitude-ahead-regulatory-deadline/

Prioritize Youth, Fix Policy, Regulatory Hiccups, Elumelu Tells African Leaders


Philanthropist, entrepreneur and Africapitalism driver, Tony O. Elumelu wants leaders on the continent to prioritize Africa’s youth by fixing the policy and regulatory issues impeding their innovative spirit, thereby helping to attract foreign investors.

Speaking during the just concluded spring meetings of the International Monetary Fund and World Bank in Washington, DC, Elumelu, founder of the Tony Elumelu Foundation, with World Bank President Jim Kim and LinkedIn CEO Jeff Weiner, on advancing the digital economy in Africa, he harped on the importance of leveraging entrepreneurship to enable Africa leapfrog traditional development paths.

According to Elumelu, “I speak as someone who has supported young African entrepreneurs. I see enthusiasm, intellect, I determination, drive and discipline – you invest $5,000 and indeed they apply this to their purpose. So why don’t we harness all of these people? Why doesn’t government replicate this model?”
When asked about the technological advancements of today, which will be responsible for shifting African development into overdrive, Elumelu was emphatic.

“It is our young people – the 60 percent of [African] people under the age of 30 who will come up with innovations that might help to pull Africa out of where it is today. We need to prioritize them, to give them support by removing the stifling policies holding them back. If we remove those, we will unleash their creativity onto the world.”
While moderating the discussion, World Bank President Dr. Jim Yong Kim, said policy makers in Nigeria and other African countries are ill-prepared to compete in the digital technology space. Elumelu conceded that without critical infrastructure, driving technological advancement would be difficult.

“You can’t talk about a digital economy in Africa without fixing critical infrastructure. Digital connectivity is a major issue in Africa and you can’t fix it if you don’t have reliable access to electricity,” Elumelu said. “So, if we want to truly address the issue of a digital economy in Africa, these challenges have to be fixed.”
Elumelu, who is also Chairman of the United Bank for Africa Group, also highlighted regulation, intellectual property and the need to incentivise investors, as other factors that would help drive the digital economy on the continent.

“Let’s fix policy issues and all these issues I have identified and investors will come to Africa,” Elumelu added.

http://investdata.com.ng/2018/04/prioritize-youth-fix-policy-regulatory-hiccups/#more

NSE: Imminent Rebound, Amidst Portfolio Review, Low Stock Valuation


Nigeria’s equity market had another very volatile session on Monday to start the week lower on a high traded volume with mixed sentiments while it continued its side-way trending. The current market behavior is not unexpected, given that the Nigerian Stock Exchange (NSE) has gone through correction to the level of resisting further decline as we saw on Monday. This has given rise to hope for an imminent rebound.
Trading started off with extension of previous day’s pullback through the mid-morning until midday where the index tested the support level at 40,579.54 basis points before retracing up to touch intraday highs of 40,832.34bps. Thereafter, it snapped back in the last minutes to close the trading session at 40,763.93, while resisting further a slip, a situation which analysts believe is a point to the imminent rebound on the strength of the subsisting low valuations in the market.

The said imminent rebound that is also on the back of expectations of the Q1 GDP numbers from the National Bureau of Statistics (NBS) to reflect the impact of sustained intervention by the Central Bank of Nigeria (CBN) to power a return to growth trend.
It is noteworthy that the market is getting into the final days of the Q1 earnings season and more companies filing their reports by the day.
Meanwhile, after several instances of non-response to otherwise wonderful score-cards, investors and traders finally applauded the Q1 earnings report of Transnational Corporation of Nigeria (Transcorp) which was released on Monday. The applauds came in the form of the 8% notch in Transcorp’s share price for the day, even as it emerged one of the most actively traded stocks, accounting for 17.66m units (SEE REPORT).

Frontier Markets
With emerging markets across the globe continue to wax stronger on the back of the rising commodity prices, particularly oil and supported by improving macro-economic fundamentals, some of them are becoming worthy of investment considerations as alterative opportunities for growth and diversification. One important consideration remains the fact that most assets in these markets are grossly undervalued due to improving company fundamentals and transparency promoted by the exchanges.
Being a frontier market, Nigeria remains an investment destination for foreign and institutional investors as her economic fundamentals continue to look better on monetary stimulus and growth trajectory.

The political risk and mixed performance of companies that released their earnings to the market on Monday, while more are been expected, will determine the general direction of the market. As noted earlier, the Q1 earnings season is gradually coming to an end, even as passage of the 2018 budget by the National Assembly is still being eagerly awaited, while momentum is building at a fast pace for the 2019 general elections. Already, Ekiti and Osun governorship elections are scheduled to hold in succession in the coming months and would give a snippet into what 2019 holds in stock, even as the dominant foreign investors go for safe bets.

Market technicals at the end of Monday were positive and mixed as volume traded was high amidst a strong buying pressure and negative market breadth. The buying position was 73%, while selling volume was 27% on a volume index of 0.67 of the day’s total transaction. The day’s resistance was helped by the improved money flow as can be seen through the index that is looking up at 44.26 points, compared to previous day’s 43.84 points, this is an indication that funds are gradually entering the market.

Index and Market Cap
The NSE All Share Index shed a marginal 50.91points to close at 40.763.93 basis points after opening at 40,81489bps, representing a 0.12% decline on a high volume that was higher than the previous day’s. Similarly, market capitalisation went down by N18.41bn to close at N14.72tr from an opening value of N14.73tr, also representing 0.12% value loss

The downturn recorded for the day resulted from profit booking in Dangote Cement, Flourmills, Guaranty Trust Bank, Dangote Sugar and Lafarge Africa which impacted negatively on the NSE’s Year-to-Date returns, which contracted to 6.59%. Market capitalisation gains for the period stood at N1.11tr, representing 8.09% above the year’s opening value.

Bearish Sectoral Indices
Sector performance was bearish except for the NSE Consumer and Oil that were up due value gain in Forte Oil, Eterna and Nigerian Breweries, while NSE Industrial, Banking and Insurance closed south. This was due to profit booking in Guaranty Trust, Wema and Continental Reinsurance.

Market breadth for the day was negative as decliners s outnumbered advancers in the ratio of 24:19 to extend the market downtrend.
Market activities were up in volume and value by 118.8% and 156.7% respectively to 530.22m shares worth N7.77bn from the previous day’s 242.29 units valued at N3.03bn.
Transaction volume was boosted by financial services, consumer and conglomerates stocks like Law Union, Zenith Bank, FBNH, NB and Transcorp which witnessed increased trading to top the activity chart.

The best performers at the end of day were Learn Africa and Transcorp topping the advancers’ table with gain of 9.17% and 7.98% respectively to close at N1.31 and N1.76 each. This was due to impressive earnings and high dividend yield.
On the flip side, Continental Reinsurance and Unity Bank were the worst performing, after losing 5.145% and 4.72% respectively to close at N1.66 and N1.21 on market forces and profit taking

Market Outlook
We imminent rebound in the midst of profit taking will also be further confirmed by the aggregate of Q1 scorecards, depending on the continued support of such extraneous factors like upswing in oil price, among other global events now closely under watch. Even so, value investors continue to position for the short and long-term on the strength of company fundamentals.

However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is ongoing and Q1 results are expected in the market arena.
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.

It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.

Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the Chart Summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.
Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
http://investdata.com.ng/2018/04/nse-imminent-rebound-amidst-portfolio-review-low-stock-valuation/#more

CBN Sustains Forex Market Interventions With $210m

The Central Bank of Nigeria (CBN), on Tuesday, again stepped into the inter-bank sector of the Foreign Exchange market, intervening in the wholesale segment and other sectors of the market to the tune of $210m.
Figures released by the Bank on Tuesday, April 24, 2018, reveal that the Wholesale sector of the market got another injection of $100m, just as the Small and Medium Enterprises (SMEs) and invisibles sectors each received $55m.

Confirming the figures, the Acting Director, Corporate Communications Department at the CBN, Mr. Isaac Okorafor, said that Tuesday’s interventions, like the previous intermediations, were in line with the Bank’s commitment to sustain the high level of stability in the Forex market and continually ease access to the currency by those requiring it for genuine activities.
Okorafor, while commending the role of every player in the market, said the CBN was ready to inject funds into the market, whenever and wherever necessary, in order to maintain market stability as well as sustain the financial system.

He also said the financial regulator was further buoyed by recent gains in the foreign exchange sector, which had seen the country’s reserves soar closer to the $50bn mark.

Speaking further, Okorafor said the country’s reserves continued to enjoy accretion, adding that the present reserves status at the Bank meant that the CBN was capable of sustaining foreign exchange liquidity in the system.
Tuesday’s intervention came as one United States Dollar (US$1) exchanged for N361 in the Bureau De Change (BDC) segment of the market.
Meanwhile, it will be recalled that the CBN in its last interventions on Friday, April 20, 2018, injected the sum of $396.18m into the Retail Secondary Market Intervention Sales (SMIS).

http://investdata.com.ng/2018/04/cbn-sustains-forex-market-interventions-210m/#more

Rencap Sees Strong Economic Growth In Nigeria, Ghana, 2017 Profit Up 43%


Leading emerging and frontier markets investment bank, Renaissance Capital (Rencap), expressed strong sentiments about the capital market and economy of Nigeria and neighbouring Ghana, which it says could rank among the strongest performers in the coming months and year.
A statement by Renaissance Capital, sent to our correspondent on Tuesday, quoted Christophe Charlier, who was appointed the company’s chairman as saying it is for this reason its ground teams in both countries “are well-positioned to service clients in these (markets).
Charlier equally expressed excitement about the market in Egypt, describing it “as a truly fascinating growth story set to take off in the years to come.”

Announcing its financials for the full year ending December 31, 2017, with Rencap reported net profit from the core business rising by 43% year-on-year to $15.6m, which was despite the marginal 8% growth in operating income at $145m. It was driven mainly by the impressive performance of its derivatives business, whose revenue more than doubled in the reporting period.
Revenue growth, Rencap said in a statement on Tuesday, was also supported by its fixed income, currencies and commodities (FICC) division, which reported 78% growth in revenue. Cash equities business grew by 21%; besides the 43% healthy rise in the investment banking business, with debt capital markets as main driver.

Renaissance Capital’s operating expenses were up by 8% YoY to $121.7m, as a result of investment in personnel and new hires to meet growing client demand and to capitalise on market opportunities.
Equity-to-assets ratio for the period stood at 15%; total assets and equity amounted to $3,260m and $486mn, respectively, as of 31 December 2017.
Also commenting on the result, Ruslan Babaev, Co-CEO at Renaissance Capital, described 2017 as an excellent year for the company’s capital markets activities, as it highlighted an “unrivaled market offerings in emerging and frontier economies. We have led and executed a number of unique transactions.
This, he said, includes “a $400mn international bond issuance for Fidelity Bank Plc, a leading commercial bank in Nigeria; and the debut corporate infrastructure bond for Viathan Group, Nigeria’s largest captive and embedded power producer among others.”
He also recalled the maiden “corporate issue for a foreign borrower in the Russian domestic ruble market for Kazakhstan Temir Zholy, the state railway company of the Republic of Kazakhstan; the first-ever local currency international bond issue out of Georgia for Bank of Georgia; the debut $350m issue for Eurotorg, a privately owned retailer in Belarus.

These, he stressed, were among the “range of excellent opportunities across emerging and frontier markets” in 2017.
On the emerging capital market front, Rencap’s team, the statement continued, worked on a range of significant deals over the past year, such as the Initial Public Offering (IPO) of Obuv Rossii, the leading Russian footwear retailer in the mid-price segment; and the IPO of Waberer’s International, the largest vehicle operator in international full truckload transportation in Europe and the leading logistics company in Hungary. There was also an “accelerated bookbuild offerings for domestic and international companies. We plan to continue growing and reinforcing our positions in the Firm’s core regions, and capitalise on the opportunities arising in global emerging and frontier markets.”

Anna Vyshlova, Co-CEO at Rencap noted: “Our strong financial performance is a result of a continuous campaign for providing career development opportunities, promoting internal people and strengthening our team globally with the best professionals. In 2017 we made a number of important hires, including Petr Molchanov, Head of Investment Banking, Russia & the CIS, Andrey Volkovskiy, Head of Financial Institutions Investment Banking; Alexander Burgansky as Head of Oil & Gas Research and Alexander Fonarkov as Head of International Equity Trading in London as well as three hires in New York. We have progressed with the opening of our office in Cairo, having hired Ahmed Hafez as Head of MENA Research and his team.

“We were recognised as the top Frontier Brokerage in the prestigious Extel Survey in 2017, and were named the Best Bank in Frontier Markets by Global Finance magazine this year. On behalf of the management team, I would like to thank all of our employees for their great efforts, teamwork, dedication and passion for our business. We are incredibly grateful and look forward to another year of market-leading performance and growth across all of our key geographies.”

For Dmitry Razumov, General Director at ONEXIM Group, “it’s been ten years since ONEXIM entered into a strategic partnership and invested in Renaissance Capital. During this period we have witnessed a series of important milestones for the firm, including successfully surviving the global financial crisis, fully turning around its operations and returning to profitability, all while fighting off a range of market disruptions and sector challenges.

“Today, we see a much stronger firm, an independent, renewed, robust, agile investment bank, truly pioneering in the frontier markets space and providing a unique offering to its global investor client base. ONEXIM Group remains fully committed to further supporting Renaissance Capital and is excited to witness the Firm’s future growth.”

http://investdata.com.ng/2018/04/rencap-sees-strong-economic-growth-nigeria-ghana-2017-profit-43/#more

Half Of Earth’s 1.7bn Unbanked Live In Nigeria, China, Five Others- IBRD Report

In what may mean the need for more concerted efforts on the part of stakeholders in the Nigerian economy to meet the goal of 80% financial inclusion rate by 2020, a new report, The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution, published by the International Bank for Reconstruction and Development (IBRD)/The World Bank Group on Thursday said 1.7bn adults, mostly women, across the globe remain unbanked.

Virtually all of these unbanked (defined as adults without an account with a financial institution or through mobile money providers), the report noted, live in developing world, with nearly half of them in seven developing economies. These countries, which are among the world’s most populated are: Nigeria, China, India, Indonesia, Mexico and Pakistan.

Specifically, the report jointly authored by Demirgüç-Kunt, Asli, Leora Klapper, Dorothe Singer, Saniya Ansar, and Jake Hess, noted that half or more of adults in Colombia, Ethiopia, Indonesia, and Nigeria, are unbanked, stressing that such “unbanked adults are just as likely to come from poorer households as from wealthier ones.”

To ensure success in the battle to increase financial inclusion, the World Bank report urged nations to prioritize financial inclusion for women, given that an estimated 56% of the unbanked population are of the female gender.
The report recommended the India example, where the gap between financially included men and women has shrunk from 20% in 2014 to just 6%, recalling also that Bolivia’s gender gap at 8% in 2014, disappeared as account ownership crossed the 50% threshold among men and women.

The Global Findex report urged nations to concentrate on raising financial inclusion among the womenfolk especially in Nigeria, Mexico, Indonesia, Ethiopia, Vietnam and Arab Republic of Egypt with roughly 20% gap. In such economies, the survey showed that wealthier adults are twice as likely to be financially included than the poor masses.

According to the report, unbanked adults are more likely to have low educational attainment, even as “poorer people also account for a disproportionate share of the unbanked. Globally, half of unbanked adults come from the poorest 40% of households within their economy, the other half from the richest 60%. But the pattern varies among economies. In those where half or more of adults are unbanked, the unbanked are as likely to come from a poorer household as from a wealthier one. In economies where only about 20–30% of adults are unbanked, however, the unbanked are much more likely to be poor.”
The survey asked adults without a financial institution account why they do not, with the most common reason being their having too little money to warrant opening an account.
“Two-thirds cited this as a reason for not having a financial institution account, and roughly a fifth cited it as the sole reason. Cost and distance were each cited by about a quarter of those responding to the question, and a similar share said they do not have an account because a family member already has one. Lack of documentation and distrust in the financial system were both cited by roughly a fifth of adults without a financial institution account, and religious concerns by 6%,” the report added.

In Sub-Saharan Africa, 29% or more adults in Ethiopia, Kenya and Nigeria, said they save for a business, even as it noted the large gender gap that continues to slow national progress in financial inclusion. The report also cited the example of Algeria as a country where 56% of men have an account and only 29% of women do, dragging the overall rate of account ownership down to 43%, a situation that is similar to Burkina Faso, Jordan, Mozambique, Nigeria and Peru.

The survey report also drew a link between remittances and financial inclusion, noting that in economies including “Ethiopia, Namibia, Nigeria, and South Africa, people sending domestic remittances through an account are most likely to do so using an account at a bank or another type of financial institution.”
Still on Nigeria and remittances, the 2017 Global Findex survey said “37% of unbanked adults use domestic remittances; similar shares do so in Côte d’Ivoire, the Philippines, and South Africa.

“The most common method for sending or receiving domestic remittances varies across economies. In the Philippines and South Africa unbanked adults are more likely to use an OTC (Over-The-Counter) service. But they are more likely to use cash in Nigeria as well as in Egypt and most other economies in the Middle East and North Africa.
Compared with those who use cash for remittances, people who use OTC services represent a potentially easier opportunity to increase account ownership,” the report added.
The 2017 Global Findex survey pointed to the need to use mobile phone ownership as a driver for financial services delivery and inclusion, as is the case in China and Kenya
represent two different models.

“In China mobile financial services are provided primarily through third-party payment service providers such as Alipay and WeChat using smartphone apps linked to an account at a bank or another type of financial institution. By contrast, in Kenya mobile financial services are offered mainly by mobile network operators, and mobile money accounts do not need to be linked to an account at a financial institution.
In Kenya most account owners have both a financial institution account and a mobile money account. This is reflected in how people make mobile payments. Forty percent of adults use only a mobile money account to make such payments,” the report added.

http://investdata.com.ng/2018/04/half-of-worlds-17bn-unbanked-live-in-nigeria/#more

Nigerian Equity Index Suffers Reversal, Amidst Profit Taking, Weakened Money Flow


Nigeria’s equity market, on Wednesday, closed lower again, reversing previous day’s gain, oscillating amidst volatility, driven by resumed profit taking in highly capitalized equities amidst weakened money flow. The reversal was despite the market entry into the peak of Q1 earnings season, and notwithstanding the relatively impressive numbers emanating from quoted companies so far.
The volatility has become of serious concern to investors, as money flow index continues to move up and down, reflecting weak liquidity in the market arena which had also reflected on the volume traded since the side-trending started on April 10.

However, the day started out with a marginal gain, which held during mid-morning session before it rallied sharply to consolidate at midday, tested intraday highs of 40,926.72 (which is becoming the recent resistance level). It pulled back to a low of 40,589.60 by the afternoon on the strength of value loss by high cap stocks, before retracing up in the last trading minutes of the session, closing at 40,755.73 on a low volume that is below the market traded average.

The foreign portfolio investment flows report for March has actually revealed and supported INVESTDATA’s position that foreign investors are stylishly exiting the market, judging from percentage outflow for the period, which was higher than inflows despite the increase in transactions for the month of March. The prevailing trading pattern in the market revealed a sustained cherry-picking of dividend stocks by smart money and the seeming indecision among short term players. Any breakdown or rally by the market at this point will be massive. So, steady your gaze at this level.

Market technicals at midweek’s trading were positive and mixed as volume traded was low amidst a improving buying pressure and positive market breadth. The buying position was 49%, while selling volume was 51% on a volume index of 0.84 of the day’s total transaction. Arising from the day’s reversal, money flow index lost 42.26 basis points, compared to previous day’s 49.54 points notch, an indication that funds left the market

Index and Market Cap
The composite NSEASI dropped slightly 47.05points to close at 40.755.73 basis points after opening at 40,802.78bps, representing a 0.11% decline on a low volume that was higher than previous day’s. Similarly, market capitalisation went south, shedding N16.54bn to close at N14.72tr from an opening value of N14.74tr, also representing 0.11% value loss which kept investors in their losing position.

The downturn recorded was due to price depreciation in Total Nigeria, Dangote Cement, FBN Holding, an apparent indication that investors were not enamoured by the 25 kobo dividend per share offered by its directors as they released its delayed audited result for the full-year ended December 31, 2017. The market also ignored the impressive growth in net profit, helped by the huge reduction in provisioning for loan loss during the period (READ). Others stocks that contributed to the day’s index slide included: Lafarge Africa, whose Q1 outing also failed to give any sign of hope that current year could be different from the last when the company reported huge loss after tax (READ); while Oando and Zenith Bank suffered profit taking. The reversal impacted negatively on the NSE’s Year-to-Date returns, to contract at 6.57%, just as market capitalisation gains for the period stood at N1.11tr, representing 8.17% above the year’s opening value.

Bullish Sector Performance
Sectorial performance for the day was bullish except for the NSE Industrial and insurance that were down as a result of selloffs in Dangote Cement, Lafarge Africa and Continental Reinsurance, while the NSE Oil/Gas, Banking and Consumer goods closed north, due to value gain in Seplat, Forte Oil, Nestle, Guaranty Trust Bank and UBA.
Market breadth was positive as advancers outnumbered decliners in the ratio of 24:22 to short-live the two-day bear market.
Market activities were up in volume and value by 42.1% and 43% respectively to 350.99m shares worth N4.6bn from the previous day’s 246.58m units valued at N3.22bn.

Transaction volume was boosted by financial services and consumer goods stocks like FBNH, UBA, Fidelity Bank, Access Bank and Flourmills, all of which witnessed increased trading to top the activity chart.
The best performing stocks for the day were Forte Oil and Presco that topped the advancers’ table with gain of 10.16% and 5.00% respectively to close at N47.70 and N69.30 each. This was due to positive market sentiments.
On the flip side, FBNH and Skye Bank were the worst performing, after losing 8.96% and 5.73% respectively to close at N12.20 and N0.82 on profit taking, boosted by other heavy weights that enhanced the reversal.

Market Outlook
We expect a reversal as investors react to earnings reports that are hitting the market in the midst of profit taking and expected Q1 GDP data likely to be supported by monetary stimulus and extraneous factors like upswing in oil price, among other global events now closely under watch.
Even so, value investors continue to position for the short and long-term on the strength of company fundamentals.
However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is ongoing and Q1 results are expected in the market arena.
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.

It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.

Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the Chart Summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.
Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambrose.o@investdata.com.ng
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
http://investdata.com.ng/2018/04/nigerian-equity-index-suffers-reversal-amidst-profit-taking-weakened-money-flow/#more

We’re Partnering CAC To Ensure Shares Are Traded Only On SEC-Regulated Platforms In Nigeria- Uduk


Ms. Mary Uduk, Acting Director-General of the Securities & Exchange Commission (SEC), last week hosted the first Capital Market Committee (CMC) meeting for the year in Lagos and indeed her maiden outing as chief executive of the capital market regulator. The CMC provides a forum for chief executives of capital market stakeholders to discuss issues and ensure the development and orderly conduct of the Nigerian capital market. Last Friday, she along with her team, briefed newsmen on outcome of the meeting, after which Ms. Uduk fielded questions and answers from the financial press, where she took on issues ranging from plans to enforce the law that requires investors to exchange company shares only on SEC-regulated trading platforms. The interaction also dueled on forbearance, electronic Dividend (e-Dividend), e-Initial Public Offering (e-IPO), as well as the high rate companies are voluntarily delisting from the Nigerian Stock Exchange (NSE), among others. Investdata was there. Excerpts…

Some (otherwise large) companies are not listed on any exchange at all, what is the SEC doing about this?

In as much as the capital market will like to attract as many companies as possible, the decision to be listed rests with the individual companies. All we do is to encourage companies and let them see the benefits of being listed. However, all public companies, whether listed or not, are expected to register their securities with the Commission. We also have rules stipulating that shares of public companies can only be transferred on SEC-approved trading platforms/exchanges.
Thus, even when a company delists, its shares can still be traded on, say, NASD OTC Plc. In addition, the Commission is liaising with the Corporate Affairs Commission to ensure that companies comply with registration of their securities and exchanging such securities only on SEC-approved platforms.

What are the terms of reference of the Committee on Listing?

The mandate of the Committee is to drive advocacy and other activities towards increasing the number of listed companies on our exchanges. Their broad terms of reference are to propose strategies to attract listings from target sectors; undertake relevant advocacy as well as other activity that may be relevant to the achievement of this mandate.
New mandate given to that committee is to find out why a number of companies are delisting. Are there regulatory issues; is it that they are having issues with compliance with our regulations? We have given them a mandate to come up with recommendations so that if we need to amend our rules to attract more listing we will look at international best practices and do that. If we have to talk to other government agencies and stakeholders we will equally do so.

What would the new SEC management do differently to boost investor confidence?

Members of the new management team have worked in the Commission for many years with experiences in different department of the Commission and aspects of the capital market. We have always been part of the Commission’s efforts at improving investors’ confidence and implementing the Capital Market Master Plan.
The Master Plan will continue to be our working document and we shall continue to implement initiatives that will promote investors’ confidence such as E-Dividend registration, Direct Cash Settlement, Dematerialization, Complaint Management Framework, Financial Literacy and Investors’ Protection Fund, among others.

What are the effects of the closed window on free e-dividend?

It is important to state that e-dividend registration has not ended; it is free registration that ended 31 March 2018. Before the deadline, the Commission was bearing the cost of registration, but the new direction now is that banks and NIBSS, along with registrars will charge a token sum of N150 per mandate. We are still soliciting for co-operation from the public to key into electronic dividend payment as this is what will address the fundamental issue of unclaimed dividend.

What is the total number of approved mandates?

As at end of March, 2018, the total approved mandates were 2.49 million, translating into 466,000 unique investor accounts

What is SEC doing to promote electronic IPO?

Globally, capital markets are moving towards Electronic IPOs (e-IPO) and the Nigerian Capital Market is working to adopt this trend. A committee was set up during the meeting comprising the Securities and Exchange Commission (SEC), Nigeria Stock Exchange (NSE), Association of Issuing Houses of Nigeria (AIHN), Association of Stock Brokers (ASHON), Central Securities and Clearing System(CSCS), Institute of Capital Market Registrars (ICMR), Capital market Solicitor Association(CMSA), Fund Managers Association of Nigeria (FMAN), and NIBSS

What is the latest on multiple subscriptions and forbearance?

On multiple subscriptions and forbearance for shareholders with multiple accounts, the forbearance window has now been extended to September 2018. Registrars have acknowledged that investors have started coming forward but there are still some challenges in the process. The CMC deliberated and recommended the appropriate Technical Committee to seek input and come up with recommendations to address these challenges. Therefore, we encourage all affected investors to come forward and take advantage of the window before the new deadline.

What other issues did the CMC consider?

The Technical Committee on Non-Interest capital market also presented its report and noted that the first sovereign sukuk which was issued in 2017 had about 1,600 retail investors that invested N5 billion in the instrument. The Committee’s next level of engagements is to work with supra-national entities (such as IFC, AfDB), state governments, institutions (such as Federal Mortgage Bank, NMRC) to include sukuk options in their capital investment plans.

http://investdata.com.ng/2018/04/partnering-cac-ensure-shares-traded-sec-regulated-trading-platforms-nigeria-uduk/#more

More Earnings Surprises Reveal Stronger Companies, Hope For Impressive Q1 GDP Data

Market volatility continued on the Nigerian Stock Exchange Tuesday, halting the two trading sessions of red market, as more companies released impressive Q1 scorecards to the investing public, further revealing the stronger state of quoted companies, while giving insights into what investors should expect going into the future.

NSE Index opened the day on a little gap up in the early hours of the session, which was sustained in the mid-morning before rallying in the midday until mid-afternoon when it finally reached intraday highs of 40,970.31 basis points, testing the recent resistance level from the 40,757.19 lows, before pulling back to close the day at 40,80278bps.

The ability of the market to break through this resistance level will be a function of long term positioning on the strength of better company numbers as they are being posted. Due to political risk and investors would play short for safety.
Right now, the index is side-trending at a KEY short-term support as revealed by the chart below, and if it can’t hold, the level may easily see lower lows. After this big earnings week when players analyse the numbers and the impact of the political risk environment, where majorly foreign and institutional funds are the ones running the market.

For this reason, oftentimes, it is their interpretation of the days ahead of the 2019 general elections in Nigeria that will give direction to equity pricing, despite the impressive numbers. In any case, these stronger numbers, if they continue as expected, will become more meaningful and useful after the election in 2019.

Setting The Stage
It is true, that market correction, sell-offs, continued profit taking and political risks have shaken sentiments as days come by, but as we have discussed in our home study packs, seminars, radio programmes and other platforms that earnings will continue to roll in with big positive surprises (Dangote Cement, Zenith Bank, Transcorp, NEM and others), as far as the Nigeria economy continues on the path of recovery and growth trajectory, there is no doubt that electioneering spending. This is just as related activities will boost demand and support company earnings, making them stronger after the election to attract funds back into the market and indeed the economy, especially as we are expecting positive surprises in Q1 GDP which would hit the market any moment from now.

This combination should set the stage for a sustained recovery and fundamentals to drive stock prices and ultimately lead to a very good year for the stock market. The robust growth that would have otherwise been unleashed on the market would be hampered by the political risk associated with coming election, depending on how it plays out.

Market technicals on Tuesday were positive and mixed as volume traded was low amidst the weak buying pressure and positive market breadth. The buying position was 21%, while selling volume was 79% on a volume index of 0.59 of the day’s total transaction. The reversal for the day was helped by the improved money flow as can be seen through the index that is looking up at 49.54 points, compared to previous day’s 44.26 points, this is an indication that funds are gradually entering the market.

Benchmark Indicators
The benchmark NSE All-Share Index gained a marginal 38.85 basis points to close at 40.802.78bps after opening at 40,763.93bps, representing a 0.10% growth on a low volume that was lower than the previous day’s. Similarly, market capitalisation was up by N14.04bn to close at N14.75tr from an opening value of N14.72tr, also representing 0.10% value gained, reducing the losing position of investors.

The upturn recorded during the day resulted in price appreciation in medium and high cap stocks like Nestle, Forte Oil, Dangote Flour, Flourmills, Zenith Bank, Dangote Sugar, ETI, UBA and Access Bank. This impacted positively on the NSE’s Year-to-Date returns, which rose to 6.69%. Market capitalisation gains for the period stood at N1.12tr, representing 8.29% above the year’s opening value.

Bullish Sectoral Indices
Sectoral performances were bullish except for the NSE Industrial and Insurance that were down as a result of selloffs in Lafarge Africa that continued its string of bad numbers in Q1; as well as Continental Reinsurance and AXA Mansard. The NSE Oil/Gas, Banking and Consumer goods were up, due to value gain in Forte Oil, Eterna, Nestle, Dangote sugar, Zenith Bank, Access Bank and UBA.

Market breadth for the day was positive as advancers outweighed decliners in the ratio of 26:25 to short-live the two day bear market.
Market activities were down in volume and value by 53.5% and 58.55% respectively to 246.58m shares worth N3.22bn from the previous day’s 530.22m units valued at N7.77bn.

Transaction volume was boosted by financial services, oil service and conglomerates stocks like Transcorp, Zenith Bank, Caverton, FBNH, NB and Transcorp which witnessed increased trading to top the activity chart.

Forte Oil and Honeywell were best performers for the day to top the advancers’ table with gain of 10.18% and 5.99% respectively to close at N43.30 and N2.83 each. This was due to positive market sentiment.

On the flip side, Fidson Healthcare and Julius Berger were the worst performing, after losing 9.60% and 5% respectively to close at N5.46 and N25.65 on profit taking and market forces

Market Outlook
We expect a sustained uptrend as more earnings surprises hit the market in the midst of profit taking and expected Q1 GDP that is likely to be supported by monetary stimulus and extraneous factors like upswing in oil price, among other global events now closely under watch.

Even so, value investors continue to position for the short and long-term on the strength of company fundamentals.
However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is ongoing and Q1 results are expected in the market arena.

We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.

It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.

Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the Chart Summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.

Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
http://investdata.com.ng/2018/04/more-earnings-surprises-reveal-stronger-companies-hope-for-impressive-q1-gdp-data/#more

More Earnings Surprises Reveal Stronger Companies, Hope For Impressive Q1 GDP Data


Market volatility continued on the Nigerian Stock Exchange Tuesday, halting the two trading sessions of red market, as more companies released impressive Q1 scorecards to the investing public, further revealing the stronger state of quoted companies, while giving insights into what investors should expect going into the future.

NSE Index opened the day on a little gap up in the early hours of the session, which was sustained in the mid-morning before rallying in the midday until mid-afternoon when it finally reached intraday highs of 40,970.31 basis points, testing the recent resistance level from the 40,757.19 lows, before pulling back to close the day at 40,80278bps.

The ability of the market to break through this resistance level will be a function of long term positioning on the strength of better company numbers as they are being posted. Due to political risk and investors would play short for safety.
Right now, the index is side-trending at a KEY short-term support as revealed by the chart below, and if it can’t hold, the level may easily see lower lows. After this big earnings week when players analyse the numbers and the impact of the political risk environment, where majorly foreign and institutional funds are the ones running the market.

For this reason, oftentimes, it is their interpretation of the days ahead of the 2019 general elections in Nigeria that will give direction to equity pricing, despite the impressive numbers. In any case, these stronger numbers, if they continue as expected, will become more meaningful and useful after the election in 2019.

Setting The Stage
It is true, that market correction, sell-offs, continued profit taking and political risks have shaken sentiments as days come by, but as we have discussed in our home study packs, seminars, radio programmes and other platforms that earnings will continue to roll in with big positive surprises (Dangote Cement, Zenith Bank, Transcorp, NEM and others), as far as the Nigeria economy continues on the path of recovery and growth trajectory, there is no doubt that electioneering spending. This is just as related activities will boost demand and support company earnings, making them stronger after the election to attract funds back into the market and indeed the economy, especially as we are expecting positive surprises in Q1 GDP which would hit the market any moment from now.

This combination should set the stage for a sustained recovery and fundamentals to drive stock prices and ultimately lead to a very good year for the stock market. The robust growth that would have otherwise been unleashed on the market would be hampered by the political risk associated with coming election, depending on how it plays out.

Market technicals on Tuesday were positive and mixed as volume traded was low amidst the weak buying pressure and positive market breadth. The buying position was 21%, while selling volume was 79% on a volume index of 0.59 of the day’s total transaction. The reversal for the day was helped by the improved money flow as can be seen through the index that is looking up at 49.54 points, compared to previous day’s 44.26 points, this is an indication that funds are gradually entering the market.

Benchmark Indicators
The benchmark NSE All-Share Index gained a marginal 38.85 basis points to close at 40.802.78bps after opening at 40,763.93bps, representing a 0.10% growth on a low volume that was lower than the previous day’s. Similarly, market capitalisation was up by N14.04bn to close at N14.75tr from an opening value of N14.72tr, also representing 0.10% value gained, reducing the losing position of investors.

The upturn recorded during the day resulted in price appreciation in medium and high cap stocks like Nestle, Forte Oil, Dangote Flour, Flourmills, Zenith Bank, Dangote Sugar, ETI, UBA and Access Bank. This impacted positively on the NSE’s Year-to-Date returns, which rose to 6.69%. Market capitalisation gains for the period stood at N1.12tr, representing 8.29% above the year’s opening value.

Bullish Sectoral Indices
Sectoral performances were bullish except for the NSE Industrial and Insurance that were down as a result of selloffs in Lafarge Africa that continued its string of bad numbers in Q1; as well as Continental Reinsurance and AXA Mansard. The NSE Oil/Gas, Banking and Consumer goods were up, due to value gain in Forte Oil, Eterna, Nestle, Dangote sugar, Zenith Bank, Access Bank and UBA.

Market breadth for the day was positive as advancers outweighed decliners in the ratio of 26:25 to short-live the two day bear market.
Market activities were down in volume and value by 53.5% and 58.55% respectively to 246.58m shares worth N3.22bn from the previous day’s 530.22m units valued at N7.77bn.

Transaction volume was boosted by financial services, oil service and conglomerates stocks like Transcorp, Zenith Bank, Caverton, FBNH, NB and Transcorp which witnessed increased trading to top the activity chart.
Forte Oil and Honeywell were best performers for the day to top the advancers’ table with gain of 10.18% and 5.99% respectively to close at N43.30 and N2.83 each. This was due to positive market sentiment.

On the flip side, Fidson Healthcare and Julius Berger were the worst performing, after losing 9.60% and 5% respectively to close at N5.46 and N25.65 on profit taking and market forces

Market Outlook
We expect a sustained uptrend as more earnings surprises hit the market in the midst of profit taking and expected Q1 GDP that is likely to be supported by monetary stimulus and extraneous factors like upswing in oil price, among other global events now closely under watch.
Even so, value investors continue to position for the short and long-term on the strength of company fundamentals.
However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is ongoing and Q1 results are expected in the market arena.

We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.

It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.

Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the Chart Summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.

Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
https://investdata.com.ng/2018/04/more-earnings-surprises-reveal-stronger-companies-hope-for-impressive-q1-gdp-data/

Dangote Cement Blames Slow Q1 Growth On Tanzania, Ghana Plants Shutdown, Ethiopia Conflict


The management of Dangote Cement Plc said it would have achieved much more than the 16.31% growth in sales revenue and 29.1% in profit after tax, if not for the shutdown in its Tanzania and Ghana operating plants, made worse by conflict in Ethiopia.

In a management commentary at Tuesday’s 2018Q1 conference call, the management announced a 10% price increases in Ethiopia; 5% in South Africa; and “very marginal” increase in Tanzania during quarter.
A bit of a price increase is still expected in Ethiopia, to fully cover the impact of last year’s currency devaluation; just as price was increased by N50/bag in Nigeria this month, “in reaction to inflation”.

Dangote Cement also noted a growth in its Nigerian volume, reflecting the country’s post-recession activities, just as rising monthly government revenue continues to support infrastructure spending. This has been supported by the company’s marketing initiatives, following which the directors project a 10% volume growth or more this year.
The company also a deliberate shut down of by-road shipment of cement from Nigeria to Ghana owing to the high cost involved, to prepare for exports by sea to Ghana early in 2019.

According to the result presented to the Nigerian Stock Exchange (NSE) on Tuesday, 2018 first quarter revenue rose to N242.116bn, up from N208.166bn; while profit before tax increased by 40.21% from N77.317bn to N108.403bn; while net profit climbed 29.1% to N72.123bn from N55.866bn, representing Earnings Per Share of N4.23, from N3.28 each.
A statement by the company Dangote Cement for the period exported a total of 211 kilotons of cement to Ghana, Togo and Niger, just as volume in Nigeria increased significantly by 5.3% to nearly 4 million tons for the period under review.
A breakdown of the results indicated that total volume of cement sales by the Group went up by 2.8% to 6.2m tonnes with Nigerian volumes up by 5.3% to nearly 4.0 million tonnes.

The statement also announced the appointment Engineer Joe Makoju was appointed Group Chief Executive, while Cherie Blair and Mick Davis also joined the board as Independent Non-Executive Directors.
Commenting on the performance, Makoju said: “The first quarter of 2018 has started strongly with substantial increases in revenues and profitability that drove excellent cash generation across the Group. Despite a slightly slower start to the quarter, Nigerian volumes increased significantly in March and underpin our confidence that 2018 will be a good year for the Group.
“Across our Pan-African operations, higher revenue per tons boosted revenues and increased EBITDA margins, with great potential to improve further when Tanzania switches to gas,” he added.

Speaking on the capacity of the company, Makoju said “Dangote Cement is Africa’s leading cement producer with nearly 46Mta capacity across Africa. A fully integrated quarry-to-customer producer. The company has a production capacity of 29.25Mta in its home market, Nigeria. Our Obajana plant in Kogi state, Nigeria, is the largest in Africa with 13.25Mta of capacity across four lines; our Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta and our Gboko plant in Benue state has 4Mta. Through our recent investments, Dangote Cement has eliminated Nigeria’s dependence on imported cement and has transformed the nation into an exporter of cement serving neighbouring countries.

“In addition, we have operations in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), Zambia (1.5Mta). “
Also, the company’s chairman, Aliko Dangote said: “I am delighted to welcome Cherie and Mick to the Board of Dangote Cement. They bring diverse and valuable experience of emerging-market business, sustainability and governance to our board.”

https://investdata.com.ng/2018/04/dangote-cement-blames-slow-q1-growth-tanzania-ghana-plants-ethiopia/

Nigerian Equity Index Suffers Reversal, Amidst Profit Taking, Weakened Money Flow


Nigeria’s equity market, on Wednesday, closed lower again, reversing previous day’s gain, oscillating amidst volatility, driven by resumed profit taking in highly capitalized equities amidst weakened money flow. The reversal was despite the market entry into the peak of Q1 earnings season, and notwithstanding the relatively impressive numbers emanating from quoted companies so far.

The volatility has become of serious concern to investors, as money flow index continues to move up and down, reflecting weak liquidity in the market arena which had also reflected on the volume traded since the side-trending started on April 10.

However, the day started out with a marginal gain, which held during mid-morning session before it rallied sharply to consolidate at midday, tested intraday highs of 40,926.72 (which is becoming the recent resistance level). It pulled back to a low of 40,589.60 by the afternoon on the strength of value loss by high cap stocks, before retracing up in the last trading minutes of the session, closing at 40,755.73 on a low volume that is below the market traded average.

The foreign portfolio investment flows report for March has actually revealed and supported INVESTDATA’s position that foreign investors are stylishly exiting the market, judging from percentage outflow for the period, which was higher than inflows despite the increase in transactions for the month of March. The prevailing trading pattern in the market revealed a sustained cherry-picking of dividend stocks by smart money and the seeming indecision among short term players. Any breakdown or rally by the market at this point will be massive. So, steady your gaze at this level.

Market technicals at midweek’s trading were positive and mixed as volume traded was low amidst a improving buying pressure and positive market breadth. The buying position was 49%, while selling volume was 51% on a volume index of 0.84 of the day’s total transaction. Arising from the day’s reversal, money flow index lost 42.26 basis points, compared to previous day’s 49.54 points notch, an indication that funds left the market

Index and Market Cap
The composite NSEASI dropped slightly 47.05points to close at 40.755.73 basis points after opening at 40,802.78bps, representing a 0.11% decline on a low volume that was higher than previous day’s. Similarly, market capitalisation went south, shedding N16.54bn to close at N14.72tr from an opening value of N14.74tr, also representing 0.11% value loss which kept investors in their losing position.

The downturn recorded was due to price depreciation in Total Nigeria, Dangote Cement, FBN Holding, an apparent indication that investors were not enamoured by the 25 kobo dividend per share offered by its directors as they released its delayed audited result for the full-year ended December 31, 2017. The market also ignored the impressive growth in net profit, helped by the huge reduction in provisioning for loan loss during the period (READ). Others stocks that contributed to the day’s index slide included: Lafarge Africa, whose Q1 outing also failed to give any sign of hope that current year could be different from the last when the company reported huge loss after tax (READ); while Oando and Zenith Bank suffered profit taking. The reversal impacted negatively on the NSE’s Year-to-Date returns, to contract at 6.57%, just as market capitalisation gains for the period stood at N1.11tr, representing 8.17% above the year’s opening value.

Bullish Sector Performance
Sectorial performance for the day was bullish except for the NSE Industrial and insurance that were down as a result of selloffs in Dangote Cement, Lafarge Africa and Continental Reinsurance, while the NSE Oil/Gas, Banking and Consumer goods closed north, due to value gain in Seplat, Forte Oil, Nestle, Guaranty Trust Bank and UBA.
Market breadth was positive as advancers outnumbered decliners in the ratio of 24:22 to short-live the two-day bear market.
Market activities were up in volume and value by 42.1% and 43% respectively to 350.99m shares worth N4.6bn from the previous day’s 246.58m units valued at N3.22bn.

Transaction volume was boosted by financial services and consumer goods stocks like FBNH, UBA, Fidelity Bank, Access Bank and Flourmills, all of which witnessed increased trading to top the activity chart.
The best performing stocks for the day were Forte Oil and Presco that topped the advancers’ table with gain of 10.16% and 5.00% respectively to close at N47.70 and N69.30 each. This was due to positive market sentiments.
On the flip side, FBNH and Skye Bank were the worst performing, after losing 8.96% and 5.73% respectively to close at N12.20 and N0.82 on profit taking, boosted by other heavy weights that enhanced the reversal.

Market Outlook
We expect a reversal as investors react to earnings reports that are hitting the market in the midst of profit taking and expected Q1 GDP data likely to be supported by monetary stimulus and extraneous factors like upswing in oil price, among other global events now closely under watch.

Even so, value investors continue to position for the short and long-term on the strength of company fundamentals.
However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is ongoing and Q1 results are expected in the market arena.
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.

It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.

Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the Chart Summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.
Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambrose.o@investdata.com.ng
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
https://investdata.com.ng/2018/04/nigerian-equity-index-suffers-reversal-amidst-profit-taking-weakened-money-flow/

Diamond Bank Sells UK Arm, Says To Concentrate On Nigerian Market


At a time it is fast becoming fashionable for its peers to make inroad into the United Kingdom in view of the competition of the future, the board of Diamond Bank, on Wednesday announced sealing a Share Sale and Purchase Agreement to sell its entire stake in that country.
In a statement to the Nigerian Stock Exchange (NSE), Diamond Bank said its entire shareholding in Diamond Bank (UK) Plc is being sold to a member of GFG Alliance for an undisclosed amount.

The statement, signed by Uzoma Uja, the company Secretary and Legal Adviser, said “the disposal is in line with (Diamond) Bank’s objective of streamlining its operations to focus resources on the significant opportunities in the Nigerian retail banking market.”
The decision to focus on the Nigerian market, the bank said arises from the vast potential therein, due to its strong fundamentals, “including millions of people who are either underbanked or unbanked, and changing lifestyles that favour the use of mobile devices to complete multiple financial transactions at the consumer’s convenience.

This is also underpinned by significant economic potential driven by an entrepreneurial spirit, and a growing culture of innovation.”
Diamond Bank said both parties “are committed to, and are pursuing a quick completion of the transaction subject to approval of the Financial Conduct Authority and Prudential Regulation Authority who regulate banking business in the United Kingdom.”
The sale of the UK arm is coming shortly after the bank’s divestment from its West African business completed in November 2017.
Commenting on the transaction, Diamond Bank’s Chief Executive Officer, Uzoma Dozie said: “Diamond Bank’s strategic objective is to be the fastest growing, and most profitable technology-driven retail banking franchise in Nigeria.

“This strategic intent requires the Bank to optimize the use of its resources which means, where necessary, divesting from its non-core assets, and focusing on the priority area, namely Nigerian retail banking.
In recent years, the bank said it has laid the foundation for growth in Nigeria with acquisition of over 15m customers, many of whom are owning bank accounts for the first time.

By harnessing technology and fostering a digitally led approach, the bank says it will have further positive impact on the overall development of the financial system, and the Nigerian economy in general.
The sale of the international subsidiaries, the statement assured, “is not expected to cause service disruptions for the bank’s customers located around the world as they can continue to enjoy enhanced and convenient banking services through the Bank’s digital channels.

https://investdata.com.ng/2018/04/diamond-bank-sells-uk-arm-says-concentrate-nigerian-market/

Despite Limping Earnings, FBN Holdings 2017 Profit Up 226.88%, Offers N0.25 Dividend


Directors of FBN Holdings Plc, on Wednesday presented its audited result for the full year ended December 31, 2017, indicating significant improvement in the management of the operating entity- First Bank of Nigeria Limited.
This can be inferred by the fact that while gross earnings was flat at 2.34% up, net profit soared by 226.88%, helped by the N75.613bn or 33.45% drop in impairment charge for credit loss from N226.037bn to N150.424bn, as ratio of Non-Performing Loans to total stood at 22.8%, up from 52.7%.

The impairment charge related to its banking subsidiary- First Bank of Nigeria), whose commercial banking segment reported N148.579bn. Net profit therefore translated to Earnings Per Share of N1.21, up from just 39 kobo in the preceding full year. The directors have offered a 25 kobo dividend per share, with register of shareholders closing between May 7 and 13; while payment is slated for May 16 to those whose names appear on the register of members as at May 4. Payment shall be subject to approval by the shareholders at the annual general meeting on Tuesday, May 15, in Lagos.

Nonetheless, the result showed that there is still significant room to explore the group’s huge assets, judging by the fact that Net Profit Margin stood at 6.72%, as against 2.1%; which translates to the fact that management could only convert 6.72 kobo of every Naira earned into profit, far lower than its peers.

Specifically, gross earnings for the period rose from N581.83bn to N595.44bn, the bulk of which was the N469.586bn interest income, which increased from N405.281bn, while interest expense rose from N138.064bn from N100.839bn; resulting in net interest income of N331.522bn, as against the previous N304.442bn.

A further breakdown revealed that commercial bank fetched N536.554bn of total revenue, with interest income of N436.392bn; followed by the N38.857bn and N25.26bn from merchant banking and asset management; while insurance yielded N18.168bn and N6.09bn respectively.
Net interest income after impairment charge for credit losses therefore stood at N181.098bn, as against the previous N78.405bn, a 130.97% growth.
Insurance premium revenue increased to N12.973bn from N9.606bn; insurance premium revenue ceded to reinsurers climbed by 133l1% to N2.739bn from N1.175bn; leaving net insurance premium revenue at N10.234bn from N8.431bn.

Fee and commission income stood at N74.453bn from N71.36bn; fee and commission expense rose marginally from N11.073bn to N12.117bn; net gains on foreign exchange fell sharply from N89.077bn to N21.062bn. Net gains on investment securities dropped from N3.93bn to N2.61bn; net gains from financial instruments at fair value through profit soared to N11.117bn from a N6m loss

Dividend income improved to N2.053bn from N897m; other operating income rose to N3.901bn from N2.868bn; insurance claims jumped from N2.19bn to N4.041bn; while personnel expenses grew to N85.678bn from N83.805bn.
Operating expenses climbed from N120.03bn to N132.496bn; bringing total cost of sales dropped slightly to N538.64bn from N558.93bn; translating to operating profit for the year of N56.395bn, up from N22.948bn.

Profit before tax of FBN Holdings for the period stood at N56.825bn from just N22.948bn, representing a 147.63% growth, while income tax at N9.05bn, up from N5.807bn left after tax profit at N40.011bn, an improved from N12.243bn in the 2016.
Unrealised net gains arising during the year stood at N50.899bn, as against a N17.8bn loss; even as exchange difference on translation of foreign operations dropped to N13.362bn, from N26.724bn. Other comprehensive income for the year stood at N64.156bn from a loss of N3.099bn in prior year; resulting in total comprehensive income for the year of N104.167bn from just N9.144bn in 2016.

Also, total assets recorded 10.55% improvement at N5.236tr from N4.736tr, with customer loans and advances falling slightly to N2.001tr, up from N2.083tr in 2016. Of the customer loans, overdrafts rose slightly from N282.687bn to N296.135bn; while term loans remained flat at N1.67tr from N1.687tr in 2016.
Total liabilities rose at a slightly lower pace to N4.558tr, up from N4.154tr, of which customer deposits remained the biggest, rising marginally from N3.104tr to N3.143tr; resulting in shareholders’ fund of N678.19bn, up by 16.41% from N582.58bn.

Commenting on the results, Urum Kalu Eke, Group Managing Director of FBN Holdings said the performance, coming ahead of projections, is the outcome of initiatives put in place, especially cost containment as shown by the 7.7% operating expense growth, down from 15.4%.
More significant improvement, he inferred, could come from accelerated resolution of the group’s “legacy assets to demonstrate sustainable improvement in asset quality as the progress we made during the year was moderated by developments in Q4 which kept our performance below guidance.

“This was largely as a result of the impairment of 9mobile, which was across the industry, as well as the foreign currency translation impact on our existing portfolio. These are one-off events and we assure that appreciable progress would be made on NPL in 2018 in line with our three-years strategic plan.

https://investdata.com.ng/2018/04/despite-limping-earnings-fbn-holdings-2017-profit-226-88-offers-n0-25-dividend/

Oscillating Trend Amidst High Volatility, As Q1 Earnings Season Draws To Close


The oscillating trend in the midst of high volatility on the Nigerian Stock Exchange (NSE) continued on Thursday, reversing previous day’s down market on mixed sentiments as Q1 earnings season draws to a close. Even so, stock prices are losing momentum, despite the better-than-expected numbers released so far, and those of the 2017 December year-end reporting season.

This has remained, evidently, a source of worry for many discerning investors, especially as inflow to Nigeria’s equity market remain unstable to reflect the current weak liquidity in the economy. There is no doubt that cautious trading on the part of market players, particularly the foreign investors due to political risk associated with the 2019 general elections has kept the market in this mood as it awaits a breakdown of this level or a reversal.

Thursday’s trading started out with the benchmark All-Share index moving up, away from the lows, after opening weak in the morning, reaching intraday highs of 40,798.01 from lows of 40,727.26 and thereafter rebounding in the last trading minutes. It then closed above its opening figure at 40,777.67 on a low volume that is below the market traded average.

Despite the indication that Q1 GDP will be upbeat as we are already seeing plenty economic activities, which has translated to the Q1 corporate earnings pouring in and helped by the monetary stimulus of Central Bank of Nigeria (CBN).

Not only do we see positive and mixed performances, especially against the backdrop of record margins and positive revenue surprises by some listed companies, which means demand has remained in the upward direction. This has supported company numbers that will drive prices on the long run regardless of the continued price correction on the exchange, as earnings continue growing waiting for GDP to confirm the development.

Market technicals on Thursday were positive and mixed as volume traded was low amidst an increasing sell pressure and negative market breadth. The selling position was 64%, while buying volume was 36% on a volume index of 0.91 of the day’s total transaction. The reversal for the day was driven by demand in highly capitalized equities as money flow index continues to weaken at 40.99 points, compared to previous day’s 42.26 points, this is an indication that funds are still leaving the market, despite the seeming rally.

Index and Market Cap
The NSE All Share Index gained marginal 21.94 points to close at 40.777.67 basis points after opening at 40,755.73bps, representing a 0.12% growth on a low volume that was higher than the previous day’s. Similarly, market capitalisation was up by N49.5bn, closing at N14.77tr from an opening value of N14.72tr, also representing a 0.36% value gain.

The upturn recorded was due to price appreciation in Okomu Oil, Nigerian Breweries, Oando, Unilever, Flourmills and May & Baker which impacted positively on the NSE’s Year-to-Date returns, to rise at 6.69%. Market capitalisation gains for the period stood at N1.14tr, representing 8.42% above the year’s opening value.

Bearish Sector Performance
The sectorial performance for the day was bearish except for the NSE Consumer goods that closed green as a result of gains in Unilever, NB and Flourmills, while others declined due to continued sell-offs in Lafarge Africa (due to its sustained bad numbers), 11 Plc, UBA (which presented flat Q1 numbers) and Continental Reinsurance.

Market breadth was negative as decliners outnumbered advancers in the ratio of 26:14 to short-live the two-day bear market.
Market activities were up in volume and value by 8.0% and 36.1% respectively to 378.19m shares worth N6.26bn from the previous day’s 350.99m units valued at N4.6bn.

Transaction volume was boosted by financial services, services providers and conglomerates stocks like: Guaranty Trust Bank, Diamond Bank, FBNH, C/I Leasing and Transcorp which witnessed increased trading to top the activity chart.
The best performing stocks for the day were Oando and Okomu Oil that topped the advancers’ table with gain of 5.2% and 5% respectively to close at N9.15 and N77.15 each. This was due to positive market sentiments and forces
On the flip side, NPF Microfinance and Jaiz Bank were the worst performing, after losing 8.9% and 8.0% respectively to close at N1.84 and N0.69 purely on profit taking.

Market Outlook
Being the last trading week ahead of month-end, we expect profit taking even as investors react to earnings reports that are hitting the market in the midst of Q1 GDP expectation that is likely to confirm the positive impact of monetary stimulus and extraneous factors like upswing in oil price, among other global events now closely under watch.

Even so, value investors continue to position for the short and long-term on the strength of company fundamentals.
However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is ongoing and Q1 results are expected in the market arena.
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.

It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.

Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the Chart Summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.
Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Ambrose Omordion
CRO| Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambrose.o@investdata.com.ng
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
https://investdata.com.ng/2018/04/oscillating-trend-amidst-high-volatility-q1-earnings-season-draws-close/

Photo News: ICAN Honours Adeosun, Others At Merit Award Night

Caption: Minister of Finance, Mrs. Kemi Adeosun (left); Wife of the President of the Institute of Chartered Accountants of Nigeria (ICAN), Mrs. Mairo Zakari and the ICAN President, Alhaji Isma’ila Muhammadu Zakari, during the Institute’s Merit Award Night in Lagos on Saturday, April 28, 2018.

https://investdata.com.ng/2018/04/photo-news-ican-honours-adeosun-orders-merit-award-night/

Investors Crunch Earnings Reports, Reposition Ahead Of Economic Data


Trading for the last full week of April ended on Friday. During the four weeks, the Nigerian Stock Exchange (NSE) experienced a new trend of oscillation that reflected the changing strategies of traders and sentiments in the market amidst the influx of Q1 earnings reports. This was particularly true since the onset of the correction mode in February, as the indicators tried to form strong support levels by resisting further decline, especially as seen in the last few sessions of the month. Keen followers of the market’s trend would have noticed that the Nigerian equities’ market suffers loss this week and gains in the next one.

The composite NSE All-Share Index moved higher over the past week, reversing the previous week’s down market on a low traded volume and improved sentiment for impressive Q1 scorecards as more corporate earnings hit the market during the period under consideration after the market had side-trended, searching for direction.

Despite the mixed performance in the score-cards within the period under review, helped by the influx of quarterly corporate earnings and few audited results which had reflected the improving economic activities. There is also the impact of the monetary stimulus of the Central Bank of Nigeria (CBN) that shows the economy is still on a strong recovery and growth path, a situation that many expect the coming Q1 GDP data to confirm.

The Q1 earnings reports have been so far positive and mixed in performance, with good margins and positive revenue surprises, which means that demand has remained in the upward direction, supporting company numbers. This is expected to drive prices on the long run, regardless of the continue price correction on the exchange, as earnings are already in growth direction waiting for GDP to confirm.
One positive side of the development is the expectation that the sustained rise in oil prices will drive activities and support Nigeria’s external reserve which equally will help support the relative stable exchange rate and the Naira.

With more numbers expected to roll in on the last trading days of April and usher in the new month on May on Tuesday, which is a public holiday as declared by the Federal Government. Market players are likely to reposition their portfolios. Already, investors and traders are interpretating and digesting of these reports will guide their investment decisions, realising the political risks associated with the 2019 general elections. The coming elections, the foretaste of which are the governorship elections in Osun and Ekiti States, is reason foreign investors are cutting short their outlook, despite the rise in the number of domestic players in the market.

It must be noted here that some of the earnings reports beat market expectations, while others came flat and even below forecast which made the week’s trading highly volatile, besides the high number of companies whose share prices were adjusted for dividend payment within the period, contributing to the up and down movement of the market despite the low volume traded but high buying pressure of 100% for the week.

Meanwhile, the All-Share Index gained 430 basis points to close the period at 41,244.89 from an opening figure of 40,814.89 points, representing a 1.05% growth on a low volume of trade, compared to the previous week’s level. The volume index of total transactions for the week was 0.65, buying pressure of 100%, while selling volume was 0% to reverse the previous week’s loss and moved above the psychological line of 41,000 mark. In the same vain, market capitalisation for the period gained N105.45bn to close at N14.94tr from an opening value of N14.74tr, representing a 1.34% gain which was boosted by listing of Flourmills right issue within the week.

Weekly Time Frame
The top performing stocks for the week (which dominated the advancers table) were low and high cap stocks as investors reacted to the released Q1 earnings reports in expectation of more results as the Q1 earnings reporting season officially comes to a close on Monday April 30, 2018. The numbers reported so far reveal stronger economic fundamentals despite the low liquidity in the equities’ market as a result of fear in the political environment as we move closer to end of first half. In the second half of the year, serious governance will be consigned to the background, as political parties and electioneering campaigns take centre stage, until the elections kicks-off in February 2019.

The value appreciation in Nestle Nigeria shares (which hit a new 52-week high), Forte Oil, International Breweries and others during the period further boosted the NSEASI’s year to date return to 7.85%, just as the gain in market captalistion stood at N1.5tr, representing a 9.51% growth from the year’s opening value.

Market breadth for the week was negative as the number of decliners outweighed advancers in the ratio of 33:41 on low volume of trades that were on a strong demand for stocks as the scorecards are being analyzed.
The index opened the week on a bearish note to extend the previous day’s loss position by 0.12%, which was however halted on Tuesday when it recovered 0.10%, a situation that was short-lived at the midweek with another pullback of 0.11%. This could not be sustained on Thursday as it reversed up again by 0.12%, which was extended on the last trading of the week recording a significant gain of 1.15%, bringing the week’s total gain to 1.05%.

Sectorial performance for the period were mixed and bullish as the NSE Industrial and Insurance sectors were down, whereas the NSE Consumer, Banking and Oil/Gas closed north, as gains by Nestle, International Brewery, Forte Oil, Seplat, ETI, and Zenith Bank impacted the sectors positively for the period.
Market activities in volume and value were down by 64.48% and 18.65% to 1.83bn shares worth N24.65bn, from previous week’s 3.01bn units valued at N30.3bn.

Forte Oil and Nestle were the best performing stocks for the week to top the advancers table with 20.69% and 13.53% gains respectively to close at N45.20 and N1,613 per share, on the back of positive market sentiments. The worst performing were Unity Bank and GSK that fell 21.26% and 20.79% to close at N0.55 and N172.00 respectively on profit taking and price adjustment for N7.50 dividend.

During the week also, the share prices of Dangote Flour, Lafarge Africa, GSK, AXA Mansard Insurance, Law Union, Caverton, May and Baker were adjusted for dividend recommended by their directors. Sterling Bank and Regency Insurance will be mark down on Monday.

Market Outlook
We expect a mixed performance for the week as investors digest the numbers to reposition their portfolios in the midst of low valuations, ahead of first quarter economic data and corporate earnings that is coming to an end, especially the Q1 GDP, Purchasing Managers Index (PMI) and April inflation to reveal the true state of the economy.
Meanwhile, dividend income players are taking position ahead of more economic data, even amidst the expected sustained volatility and repositioning.

However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is approaching.
We advise investors to allow numbers guide their decisions while repositioning for the rest of the year’s trading activities, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.

It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.

Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the INVEST 2018 traders and the investors’ summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.

Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
https://investdata.com.ng/2018/04/investors-crunch-earnings-reports-reposition-ahead-economic-data/

How We Plan To Repay Our Debt, Improve Profit, By Oando Management


The management of Oando Plc, says it has developed strategies to return the group to profit, pay its debt, improve working capital and cash flows as part of ensure it is able to propose a dividend as soon as practicable and for the good of shareholders.
Such key strategic initiatives developed to return the group to the path of prosperity, profit and improve working capital and cash flows, were listed as: restructuring “the Reserve Based Loan and Corporate Loan Facilities at Oando Energy Resources.

It will therefore ensure that the loans become not only default free and fully comply with credit agreements, besides achieving “a tenor extension of up to two years, and reduce debt service requirements in the near term.”
The net effect of the initiative, Oando Plc management assured, “will be to reclassify up to N117 billions of current liabilities into long-term liabilities thus creating a substantial remedy to the negative working capital position.”

Implementation of this initiative, it recalled, started in 2016 and will be completed between April and June this year; in addition to the planned refinancing of approximately N9bn credit facility provided by one of its bilateral lenders.
Oando Plc says it would sell its stake in Oando Energy Resources, a move expected to raise up to N84bn this year also “in order to prepay debt across the Group.”

It will be complimented with the sale of 25% stake held by Oando Plc in Glover BV, expected to fetch up to N24bn over the next 18 months, proceeds of which will be used to make repayment of principal of debts across the group.
This is in addition to raising capital N18bn via private placement by December 2020.
All of these initiatives, Oando Plc added, “are expected to improve the profitability of the group through interest savings arising from repayment of borrowings.”

According to its audited financials for the year ended December 31, 2017, Oando Plc reported comprehensive losses of N30.6bn, up from N28.1bn in prior year; despite a net profit of N19bn during the period.
In a note to the account on the group’s going concern basis, the managed also noted the net liabilities of N10.5bn, compared to the net assets of N18.1bn in 2016; following which the group’s reported net current liabilities stood at N293.1bn, from net current liabilities of N263.8bn in prior year. These, it noted further, “indicate the existence of material uncertainty which may cast significant doubt on the company’s ability to continue as a going concern and, therefore, the company may be unable to realise its assets and discharge its liabilities in the normal course of business.”

Meanwhile, a statement by Ayotola Jagun, Company Secretary and chief compliance officer of Oando Plc, which followed the release of its 2017 full-year audited result by Oando Plc, quoted Wale Tinubu, its Group Chief Executive, as describing the 2017 full year as an important and positive milestone for the Company.”
Also important, Tinubu added, was “the continued strengthening of our business model through the effective implementation of our strategic initiatives of Growth through our dollar earning upstream portfolio; Deleverage through asset divestments and the expansion of our oil export trading business.

“Against this backdrop we experienced challenges; the most significant being the Securities and Exchange Commission’s (SEC) investigation into the Company which led to the technical suspension of free trading of our shares on the Nigerian and Johannesburg Stock Exchanges and the instituting of a forensic audit; we have and continue to provide full support to the SEC and are hopeful of a smooth and speedy conclusion. We have commenced 2018 buoyed by our unrelenting commitment to our strategy and remain confident in its success.”

Photo Caption: Oando Plc’s chairman and Alake of Egbaland, Oba Adedotun Aremu Gbadebo, with Jubril Adewale Tinubu, Group Chief Executive of the company during the commission of the new head-office complex on Ozumba Mbadiwe Street, Lagos.

https://investdata.com.ng/2018/04/plan-repay-debt-improve-profit-oando-management/

Corporate Actions In Nigeria As At April 27, 2018


https://investdata.com.ng/2018/04/corporate-actions-nigeria-april-27-2018/

Nestle Nigeria Q1 Profit Limps To N8.6bn


Directors of Nestle Nigeria Plc, on Monday presented its unaudited financials for the first quarter ended March 31, 2018, indicating that revenue from sales could only limp by 10%, which was way better than profit for the period, which crawled 3% up.
Turnover of Nestle Nigeria for the period rose to N67.463bn up by 10% from N61.151bn, while cost of sales increased by N4.037bn or 10.72% to N41.705bn, up from N37.668bn; leaving gross profit at N25.757bn, up from N23.483bn.

Marketing and distribution expenses increased from N8.047bn to N9.029bn; administrative expenses stood at N2.208bn from N2.225bn; while results from operating activities was a profit of N14.519bn, as against the N13.209bn in the first quarter of 2017.
Finance income dropped significantly by N2.319bn or 89.18% from N2.601bn to N281.299m; while finance costs dropped to N1.159bn from N1.528bn; as net finance cost for the period stood at N878.591m from an income of N1.072bn in 2017.

Profit before tax dropped to N13.64bn from N14.282bn; while net profit inched to N8.605bn from N8.358bn in 2017Q1; translating to Earnings Per Share of N10.86, up from N10.55 in the 2017Q1.

A segment analysis of the financials of Nestle Nigeria showed that the bulk of revenue was the N43.014bn, up from N40.253bn; while beverages segment fetched N24.449bn, as against the N20.897bn garnered in 2017Q1; while profit from food business stood at N10.346bn from N10.21bn; just as beverages revenue increased from N3.019bn to N4.177bn.

Further analysis showed that N66.348bn of the turnover by Nestle Nigeria for the period came from Nigeria, up from N60.759bn; while export revenue climbed to N1.115bn from N391.523m.

https://investdata.com.ng/2018/04/nestle-nigeria-q1-profit-limps-n8-6bn/#more