Weighed By Political Risks, Nigerian Bourse Side-Ways Trend, Amidst Cautious Trading


In recent times, volatility is one word that would not go away on Nigeria’s equity market, as it continues side-ways trending, indicating that investors are becoming even more cautious on a daily basis.
Tuesday’s volatility was even on the high side, reversing the previous day’s marginal gain on a high traded volume and 91% selling pressure, closing lower, with the side-ways trending movement related the uncertainty and political risks around the oncoming 2019 general elections, even as we move closer to second half of the year.

The day began with the Nigerian Stock Exchange (NSE) All-Share index opening higher to breakout the symmetrical triangle chart pattern of the market. The index rallied on wave 3 to resistance level of 41,642.33 basis points which was the intraday high between mid-morning and noon, before pulling back to lows of 41,110.44bps on a sell-offs in high cap stocks in the afternoon to make lower-lows. It then retraced up marginally to close at 41,155.80bps, even as it continued to trade above its 20-Day Moving Average for the seventh day on a seeming wave 3 of its daily time frame.

Market technicals for the day were weak and mixed as volume traded was high amidst increasing selling pressure and negative market breadth. The sell-off position was high at 91%, while buying volume was 9% on a volume index of 1.41 of the day’s total transaction. The seeming bull transition was halted on high volume of transactions that reflected in the day’s money flow index which was strengthened further at 70.80 points.
Compared to previous day’s 49.11 points, this is an indication that funds are in the market. The cautious trading and side-ways trending is also irrespective of improvements seen so far in the nation’s economic fundamentals as revealed through the healthier company financials and seeming improvement in the consumer purchasing power.
We also note that side-ways trending movement of the benchmark index is despite the rising oil prices in the international market in recent days due to the aforementioned fear, even as the congresses organized by the ruling All Progressives Congress (APC) across the country failed to provide any comfort, due to the disruptions that trailed it.

However, against the backdrop of the stronger company and economic fundamental and low valuations that have made the stocks attractive, relative to the low interest and yield environments, we see an end soon to the side-ways trending and the stock market making a strong rally on the long run.

Index and Market Cap

The composite NSEASI shed 17.02 basis points to close at 41,155.80 bps after opening at 41,172.82 bps, representing a 0.04% decline on a high volume that was higher than the previous day’s. Similarly, market capitalisation was down by N6.16bn to close at N14.91tr from an opening value of N14.92tr, also representing 0.04% value loss as a result of sell-offs in high cap stocks.

The downturn was driven by profit taking in stocks like: Dangote Cement, Nigerian Breweries Guinness, Forte Oil, Oando and Zenith Bank that impacted negatively on the NSE’s Year-to-Date returns, to rise to 7.6%; while market capitalisation gains for the period stood at N1.30tr, representing 9.54% rise above the year’s opening value.

Bearish Sector Performance

Performance across the sectors were largely bearish except for the NSE Banking and Industrial goods that closed higher due to value gain in Guaranty Trust Bank, ETI and CCNN. Other sectors that closed lower included: NSE Consumer, Insurance and Oil/Gas. This was as result of sell-offs in Nigerian Breweries, Flourmills, Forte Oil, Aiico and Continental Reinsurance.
Market breadth was negative as decliners outweigh advancers in the ratio of 25:24 to halt the two sessions up market.
Market activities were up in volume and value by 156.6% and 124.7% respectively to 563.62m shares worth N5.62bn from previous day’s 221.4m units valued at N2.57bn.

Transaction volume was boosted by financial services stocks like FCMB, Guaranty Trust Bank, Zenith Bank, Sovereign Trust Insurance and Fidelity Bank which witnessed increased trading to top the activity chart.

The best performing stocks for the day were Cutix and Livestock Feed that topped the advancers’ table with gain of 8.5% and 4.9% respectively to close at N3.20 and N0.85 each. This was due to market sentiment and forces
On the flip side, Forte Oil and C/I Leasing that were the worst performing, after losing 5% and 4.8% respectively to close at N40.85 and N1.80 purely on profit taking.

Market Outlook
We expect a mixed performance, volatility and profit taking to continue as investors reshuffle their portfolios along the line of companies with stronger numbers to start the financial year as economic fundamentals are becoming robust on a daily basis, ahead of Q1 GDP and April inflation data. These are 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.

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/2018/05/weighed-political-risks-nigerian-bourse-side-ways-trending-amidst-cautious-trading/#more

Moody’s Sees 18% NPL, Profit Slide Among Nigerian Banks, Rates Sector Stable


A new report by international rating agency- Moody’s Investors Service, on Wednesday warned that profitability among Nigerian bank could decline this year on account of lower yields on government securities, as well as a likely reduction in income from derivatives.

In the report, “Banking System Outlook — Nigeria; Liquidity risks have eased but earnings pressure and loan quality risks remain,” released on Wednesday, Moody’s expects foresees a marginal increase in nonperforming loans and associated provisions in the banking system.

This, it said, would come in a delayed response to sluggish economic growth experienced last year, just as it expects NPL within the industry to range between 15.5% and 18% of gross loans over a period of 12 to 18 months.
The report, nonetheless adjudged outlook for Nigerian banks stable as their foreign currency liquidity risks moderate due to rising oil prices and a more liberal foreign exchange policy.

The marginal decline in capital metrics over the period, it believes, would also be despite the stability in banks’ foreign currency funding and liquidity profiles, even as it expects asset quality to remain weak. A further deterioration in loan performance it assured, will be marginal as operating conditions slowly improve, even as it expects bank earnings to come under pressure.

The statement by Moody’s quoted Akin Majekodunmi a Vice President and Senior Credit Officer, at Moody’s, as saying “Operating conditions for the Nigeria’s banks will continue to gradually improve over the next 12 to 18 months but remain challenging.
“Nigeria’s growth prospects remain vulnerable to global oil prices, as crude oil will remain the nation’s largest export commodity and its main generator of foreign currency for the foreseeable future,” he added.

Moody’s forecasts a recovery in real GDP growth over the next two years, up from 0.8% last year, helping lending growth rise to around 10% after a 15.4% contraction in 2017.

https://investdata.com.ng/2018/05/moodys-sees-18-npl-profit-slide-among-nigerian-banks-rates-sector-stable/#more

NSE Indicators Down On Impact Of Smart Money Exit, As Investors Await Q1 GDP, Inflation Data


The nation’s stock market on Wednesday extended it losing position on a strong volatility and mixed sentiment that signaled the gradual exit of smart money from the market as sell-offs in highly capitalized stocks continues on daily basis across different sectors.
This exit of smart money is despite the impressive Q1 earnings reports from these companies, forcing the All Share Index to open the day south, breaking down the psychological line of 41,000 mark, hitting an intraday low of 40,904.83 basis points. The composite NSE ASI however touched highs of 41,160.18bps to finally finish at 41,080.12bpbs while trying to break down the symmetrical triangle chart pattern and the 20-Day Moving Average which may usher in another correction wave.

Anyone that had observed this market well enough knows that the downtrend has lingered since hitting the January highs and repeatedly bounced off at the support levels. Following the various attempt to reverse up since last Friday, while the top of NSE’s short-term is increasingly becoming an intermediate term.

The exit of smart money and ongoing cautious trading is indicative of the fact that the downtrend is underway. In early trading at the mid-week, the NSE Index has traded above its 20-DMA but has not been able to break down below its downtrend.
The next few trading sessions would go a long way in helping to determine which way the market will ultimately break from this pattern.

Midweek’s market technicals were weak as volume traded was low in the midst of high selling pressure and negative market breadth. Still as a sign of the smart money exit, profit taking was high with selling volume at 69%, while buying pressure stood at 31% on a volume index of 0.87 of the day’s total transaction. The bear run continued on low volume of trade that reflected in the day’s money flow index which weakened to 64.68 points from previous day’s 70.80 points, another indication that funds are leaving the market- the impact smart money, with foreign investors stylishly selling down their positions.

Index and Market Cap
Benchmark Index shed 75.58bps to close at 41,080.12bps after opening at 41,155.80bps, representing a 0.18% decline on a relatively low volume that was lower than the previous day’s. Similarly, market capitalisation went down by N27.4bn to close at N14.88tr from the N14.91tr it opened, also representing 0.18% value loss that further deepened investors losing positions.

Wednesday’s downturn was driven by sell-offs in stocks like: Nigerian Breweries Guaranty Trust Bank, Unilever, UACN Property and UBA, which impacted negatively on the NSE’s Year-to-Date returns, dropping to 7.42%. Market capitalisation gains for the period stood at N1.28tr, representing 9.34% above the year’s opening value.

Mixed Sector Performance
The sectorial performance for the day was mixed as the NSE Industrial Goods and Insurance closed green due to price rally in Dangote Cement, CCNN, AXA Mansard and Linkage Assurance. NSE Oil/Gas was flat for the session, while NSE Banking and Consumer Goods closed red in seeming market reaction to the latest by Moody’s Investment Services released Wednesday morning showing that the Nigerian banking sector would be hampered by non-performing loan (NPL) growth (READ Further); and profit booking. Stocks prices that went north included: Nigerian Breweries, Unilever, Guaranty Trust Bank and UBA, among others

Market breadth was negative as decliners outnumbered advancers in the ratio of 27:22 to make two sessions of down market.
Market activities were mixed as volume went down by 39.5% to 341.06m share from the previous day’s 563.62m units, while value was up by 61.7% to N9.33bn from previous day’s N5.62bn.

Transaction volume was boosted by financial services stocks like Guaranty Trust Bank, Fidelity Bank, FBNH, UBA and Zenith Bank which witnessed increased trading to top the activity chart.
Veritas Kapital and CCNN were the best performing stocks as they topped the advancers’ table, gaining 5.7% and 4.9% respectively to close at N0.37 and N24 each. This was due to market sentiments and forces
On the flip side, Japual Oil and Cutix were the worst performing, after losing 8.3% and 5% respectively to close at N0.44 and N49 purely on profit taking.

Market Outlook
We expect a mixed performance on Thursday, with continued volatility and profit taking as investors reshuffle their portfolios along the line of companies that started the year with stronger numbers as shown in their Q1 financials. Added to this is the nation’s economic fundamentals that are becoming even more robust on a daily basis. The Q1 GDP and April inflation data is also expected to confirm the positive impact of monetary stimulus and favourable extraneous factors like the upswing in oil price, among other global events now closely under watch.

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.

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/2018/05/nse-indicators-smart-money-exit-impact-investors-await-q1-gdp-inflation-data/#more

Types of Profit Margin

There are 3 types of Profit Margin namely;
• Gross Profit Margin
• Operating Profit Margin
• Net Profit Margin
Before we proceed, let us bring it to your notice that each type of Profit Margin tells Managers different things about the business/company.

Gross Profit Margin compares revenue to variable costs or cost of goods sold. It tells how much profit each product creates without fixed costs. This types of profit margin does not apply in service companies.
Gross Profit Margin = (Revenue-Cost of goods sold)/Revenue

Operating Profit Margin also known as earnings before interest and taxes (EBIT). It includes both variables and fixed costs. It does not include certain financial costs but does include all operating costs and overhead that includes personnel costs and administration along with cost of goods sold.
Operating Profit Margin = ( gross profit - selling and distribution costs - general administrative costs)/Revenue

Net Profit Margin is the bottom line. It measures the profitability of a company after accounting for all its costs. Net profit margin would indicate how much after-tax profit would a company make for every naira of revenue generated.
Net Profit Margin = (profit - interest - taxes)/Revenue

Investdata Academy
http://investdataltd..com/2018/05/types-of-profit-margin.html

Investdata Daily Sentiment Reports

NSEASI buy 69% sell 31% volume index 0.87 MFI 64.68
Ccnn buy � MFI 96.54
Dangote cement buy � MFI 84.76
Dangote sugar buy 42% sell 58% volume index 1.22 MFI 37.07
Diamond buy 25% sell 75% volume index 1.15 MFI 73.91
Fbnh buy 80% sell 20% volume index 1.10 MFI 56.15
Fcmb buy � MFI 11.13
Fidelity buy � volume index 1.73 MFI 17.46
Oando buy 25% sell 75% MFI 82.59
Pz buy � volume index 4.34
Transcorp buy 0% volume index 0.78 MFI 43.56
Zenith buy � MFI 71.92

http://investdataltd..com/2018/05/investdata-daily-sentiment-reports.html

AFC Grows Profit By 2,179%, Pays $304.4m Dividend In 10 Years


In what has been described as a superlative year, multilateral development finance institution, the Africa Finance Corporation (AFC), on Friday reported a net profit of $100.3m in 2017, from a total comprehensive income of $109.2m.
The 2017 profit, according to Andrew Alli, the outgoing President/Chief Executive of AFC, represents a 2,179.5% rise over a 10-year period from the humble $4.4m recorded in the 2007 financial year.

Other highlights of the financial report showed that the AFC grew net interest income by 21% to $142.7m; just as fees, commissions, dividend and other Income, up 36%; amidst an all-time low cost-to-income ratio of 19%.
Liquidity position for the year stood at $1.5bn; even as management grew total assets year-on-year by 21% to $4.2bn, while total equity stood at $1.5bn.

Commenting on the year’s performance, Alli added that within its first decade of operation, the AFC has besides the 20-fold profit growth, “paid aggregate dividends of US$304.4 million to its shareholders and elevated the Corporation to the second-best rated lending institution in Africa.
“With the balance sheet and track record in place to deliver the infrastructure financing that will help Africa to fulfil its potential, AFC is well placed for its next decade of growth, to the benefit for all its stakeholders,” he added.
Continuing, the AFC boss described the 2017 performance as robust “in the face of challenging conditions. Despite a year marked by fiscal challenges, fewer bankable projects, and a market-wide reduction in terms of investment, AFC delivered strong underlying results, as the above numbers show.

“Operationally, AFC also maintained its momentum, welcoming Kenya, Zambia and Benin as new member states, pioneering innovative funding instruments such as our oversubscribed Sukuk, and continuing to enable numerous successful infrastructure projects that will transform the economies we invest in.

“AFC marked its 10th anniversary in 2017, coinciding with my last year as President and CEO. I am proud to report that over the last decade, AFC has evolved from a start-up to a powerful force on the continent that is at the forefront of addressing Africa’s infrastructure deficit. We have demonstrated that Africa Infrastructure is a viable asset class and that investors can contribute to long- term sustainable growth of the continent in a way that generates strong returns.
In the year 2017, the number of AFC member-states increased by three to 18, after welcoming Kenya, Zambia, Benin, while Malawi joined in 2018.

Also, there were additional equity investors- one Sovereign Investor (Ghana) in 2017, with African Reinsurance Corporation becoming the first multilateral institution investor in January 2018.
Within the period, the corporation also inaugurated two ports built in record time by Gabon Special Economic Zone, an investee company. The mineral and general-purpose port, at invet will enable the diversification of the Gabonese economy.
It closed the Anergi transaction, a joint venture with Harith General Partners creating a power company with a 1,786MW gross energy generation capacity that will supply reliable energy to up to 30 million people in five countries.

This was besides leading an international consortium to invest US$205 million in Bel-Air bauxite mining in Guinea-Conakry, one of the largest foreign investments in the country since the 2014 Ebola crisis.
The corporation also became the first African multilateral finance institution to issue a Sukuk bond – the highest rated by an African supranational entity; just as it raised $500m in 7-year Eurobond that was five times oversubscribed.

Photo Caption: Andrew Alli, President/Chief Executive of African Finance Corporation; Emeka Emuwa, Chairman of General Meeting; Dr. Adesegun Akin-Olugbade, Chief Operating Officer & General Counsel, AFC at the 10th Annual General Meeting of the corporation on Friday, April 27, 2018 in Lagos, Nigeria.

https://investdata.com.ng/2018/05/afc-grows-profit-2179-pays-304-4m-dividend-10-years/

AFC Grows Profit By 2,179%, Pays $304.4m Dividend In 10 Years





In what has been described as a superlative year, multilateral development finance institution, the Africa Finance Corporation (AFC), on Friday reported a net profit of $100.3m in 2017, from a total comprehensive income of $109.2m.

The 2017 profit, according to Andrew Alli, the outgoing President/Chief Executive of AFC, represents a 2,179.5% rise over a 10-year period from the humble $4.4m recorded in the 2007 financial year.



Other highlights of the financial report showed that the AFC grew net interest income by 21% to $142.7m; just as fees, commissions, dividend and other Income, up 36%; amidst an all-time low cost-to-income ratio of 19%.

Liquidity position for the year stood at $1.5bn; even as management grew total assets year-on-year by 21% to $4.2bn, while total equity stood at $1.5bn.



Commenting on the year’s performance, Alli added that within its first decade of operation, the AFC has besides the 20-fold profit growth, “paid aggregate dividends of US$304.4 million to its shareholders and elevated the Corporation to the second-best rated lending institution in Africa.

“With the balance sheet and track record in place to deliver the infrastructure financing that will help Africa to fulfil its potential, AFC is well placed for its next decade of growth, to the benefit for all its stakeholders,” he added.

Continuing, the AFC boss described the 2017 performance as robust “in the face of challenging conditions. Despite a year marked by fiscal challenges, fewer bankable projects, and a market-wide reduction in terms of investment, AFC delivered strong underlying results, as the above numbers show.



“Operationally, AFC also maintained its momentum, welcoming Kenya, Zambia and Benin as new member states, pioneering innovative funding instruments such as our oversubscribed Sukuk, and continuing to enable numerous successful infrastructure projects that will transform the economies we invest in.



“AFC marked its 10th anniversary in 2017, coinciding with my last year as President and CEO. I am proud to report that over the last decade, AFC has evolved from a start-up to a powerful force on the continent that is at the forefront of addressing Africa’s infrastructure deficit. We have demonstrated that Africa Infrastructure is a viable asset class and that investors can contribute to long- term sustainable growth of the continent in a way that generates strong returns.

In the year 2017, the number of AFC member-states increased by three to 18, after welcoming Kenya, Zambia, Benin, while Malawi joined in 2018.



Also, there were additional equity investors- one Sovereign Investor (Ghana) in 2017, with African Reinsurance Corporation becoming the first multilateral institution investor in January 2018.

Within the period, the corporation also inaugurated two ports built in record time by Gabon Special Economic Zone, an investee company. The mineral and general-purpose port, at invet will enable the diversification of the Gabonese economy.

It closed the Anergi transaction, a joint venture with Harith General Partners creating a power company with a 1,786MW gross energy generation capacity that will supply reliable energy to up to 30 million people in five countries.



This was besides leading an international consortium to invest US$205 million in Bel-Air bauxite mining in Guinea-Conakry, one of the largest foreign investments in the country since the 2014 Ebola crisis.

The corporation also became the first African multilateral finance institution to issue a Sukuk bond – the highest rated by an African supranational entity; just as it raised $500m in 7-year Eurobond that was five times oversubscribed.

Photo Caption: Andrew Alli, President/Chief Executive of African Finance Corporation; Emeka Emuwa, Chairman of General Meeting; Dr. Adesegun Akin-Olugbade, Chief Operating Officer & General Counsel, AFC at the 10th Annual General Meeting of the corporation on Friday, April 27, 2018 in Lagos, Nigeria.


https://investdata.com.ng/2018/05/afc-grows-profit-2179-pays-304-4m-dividend-10-years/

Adeosun: 46m Economically Active Nigerians Not Tax Compliant


The Minister of Finance, Mrs. Kemi Adeosun, on Thursday said despite the five million increase in the number of tax-compliant Nigerians from 14m to 19m within a space of two years, there are still 46m others, or 70.76% economically active people outside of the tax net.
Addressing a World Bank Mission of 10 Executive Directors led by Patrizio Pagano in Abuja, Adeosun spoke of the Federal Government’s desire to mobilise more revenues by growing the number of tax-compliant people so as to drive its growth plan for the economy.
“We have been able to grow the tax payers’ base to 19m in two years from the 65 million economically active people who are not tax complaint,” she said.

Besides further growing the number of tax-compliant persons, Adeosun assured that the administration would accelerate Nigeria’s growth level and also improve the ‘Ease of Doing Business’ in the country.
“The Nigerian Government is working towards accelerating the country’s growth level. The growth will be underpinned by stimulating the ‘Ease of Doing Business’ in Nigeria and improving our capital expenditure which we have done in the last two years.
“Nigerians should trust the Government to deliver on its promises of improving the economy and providing sustainable infrastructure development. We are very optimistic but we will remain vigilant,” Adeosun said.

A statement by Oluyinka Akintunde, Special Adviser on Media and Communications to the Minister of Finance quoted Pagano as saying the team was in the country to acquaint itself with the Government’s growth and power priorities.
“We have met with several Nigerian entrepreneurs and have seen how vibrant the private sector is. We want to understand how the power sector is evolving in Nigeria,” Pagano said.

The World Bank officials representing 96 countries, had earlier met with the organised private sector in Lagos and undertaken a tour of LAPO Microfinance project in Lagos and are expected to inspect the Azura Power Plant in Edo State as part of the three-day visit to Nigeria.
The visit is expected to provide a first-hand impression of the challenges that both the Federal and State Governments face in implementing development projects as well as ensuring good governance overall.
It will further enhance the goal of the bank for member-countries and the effectiveness of the Executive Directors in providing the necessary support.

Photo Caption: Permanent Secretary, Federal Ministry of Finance, Dr. Mahmoud Isa-Dutse (Left); Minister of Finance, Mrs. Kemi Adeosun and Leader of the World Bank Mission to Nigeria and Executive Director of the Bank, Patrizio Pagano, during a meeting with the Minister at the Federal Ministry of Finance on Thursday, May 10, 2018.

https://investdata.com.ng/2018/05/adeosun-46m-economically-active-nigerians-not-tax-compliant/

Investdata Price & Earnings Tracking For Week Ended May 4, 2018

https://investdata.com.ng/2018/05/investdata-price-earnings-tracking-week-ended-may-4-2018/

VAIDS: Nigeria’s Tax Net Records 36% Growth In 12 Months, Says Osinbajo


Vice President Yemi Osinbajo, on Wednesday in Abuja said the nation’s tax net (the number of economically-active tax paying Nigerians) grew in excess of five million or 35.7% from 14m in May last year to over 19 so far, helped by the Voluntary Assets and Income Declaration Scheme (VAIDS).
VAIDS is a 12-month amnesty window, aimed at growing the tax net by allowing Nigerians at home and abroad to regularise their tax status by declaring and paying taxes on all previously undeclared income and assets, without the fear of investigation or prosecution. One of its goals is to raise Nigeria’s tax-to-GDP ratio from the current 6 percent to 15% by 2020.

Declaring open the 20th conference of the Chartered Institute of Taxation of Nigeria (CITN) in Abuja, Osinbajo said the feat, among others, was achieved an unprecedented push “to rewrite the tax narrative in Nigeria, to ensure that everyone, citizens, businesses, investors, tax professionals, governments, all derive maximum benefit from the system.”
This, he continued, also “means that the efforts of the Federal Inland Revenue Service (FIRS), in collaboration with the State Inland Revenue Services, have already added more than five million new taxpayers to the tax base.”
Despite the growth in tax net, Osinbajo noted that there is still a lot of work ahead in the determination to ensure Nigeria catches up with the rest of the world in terms of tax compliance and tax-to-GDP ratio.

He challenged Nigeria’s tax of experts and professionals, from across government, academia and the private sector, to focus attention during the conference on how to further raise the tax net and achieve the target. One way of doing this, he stressed, is for participants to invent solutions that would enhance effective tax collection from Nigeria’s huge informal economies.
For him, the easy argument that Nigeria should wait until economic growth and development brings informal players into the formal systems and then the tax net is unhelpful. Such attitude, he said, is responsible for keeping the country on the same spot for decades.

“It seems to me that we must find a way of fixing this car while the engine is running,” he stressed.
The nation, he continued, has carried on as an oil-rich country, one without the need for its citizens’ taxes, while urging those who care to pay whatever taxes they can for decades. In exchange, government, he continued, got the right to do as it liked with Nigeria’s oil wealth, fueling “massive corruption and inefficiencies that have come to be associated with public revenue management.”

Those in the tax net (taxpayers), he noted, are less tolerant of corruption than citizens “who does not pay tax. Because most of what the government spends is from oil and the taxes of the few, many citizens simply see government money as belonging to no one. So you sometimes hear people supporting persons of their ethnic group who steal government funds, whereas they would not tolerate the same persons stealing from their town union funds or any society they belong. The simple reason is that they are active contributors to whatever society they belong and they would not tolerate anyone stealing their money.”

The President Muhammadu Buhari administration, he assured also, is working to change this state of affairs, determined to restore the full weight of the social contract, just as it is rewriting the old rules and making it “clear to Nigerians that we will ensure that every Naira of public money is put to use for the maximum good of the Nigerian people, while simultaneously ensuring that every Naira due to the public coffers in taxes is promptly and efficiently collected.”

Photo Caption: From left to right: Secretary to the Government of the Federation, Boss Mustapher; Chief of Staff to the President, Mallam Abba Kyari; National Security Adviser, Maj. Gen. Babagana Monguno and Vice President Yemi Osinbajo, discussing during the Federal Executive Council meeting at the Aso Chambers, State House, Abuja on Wednesday, May 9, 2018.
Source: Akintunde Oluyinka, spokesman to Mrs. Kemi Adeosun, the Finance Minister

https://investdata.com.ng/2018/05/vaids-nigerias-tax-net-records-36-growth-12-months-says-osinbajo/

Corporate Actions As At May 4, 2018

https://investdata.com.ng/2018/05/corporate-actions-may-4-2018/

Political Risks Cast Shadows On Nigeria’s Robust Economic Prospects, As Equity Index Stays Red


The Nigerian Stock Exchange (NSE), continued trading below its 20-day moving average on a weekly time frame for the fourth consecutive week, with investors continuing to discount the robust economic prospect reflecting in stock valuations, while pricing in the political risks arising from the 2019 general elections. Such investors, most foreign are now interpreting and digesting the recently released Q1 earnings reports, which has formed the basis for reshuffling portfolios on the strength of company performances. They are also keeping in view, the expected half year earnings season when some companies traditionally offer interim dividend, amid the persistent volatility, correction and political risks relating to the next February’s general elections that have been of great concern to market players.

Those who would ordinarily believe such political risks are exaggerated may be having a rethink by now, judging by the outcome of ward congresses organized by the ruling All Progressive Congress (APC) across the country which were less than peaceful in many states, resulting in some deaths. There are those who are still watching to see the outcome of the governorship elections in Osun and Ekiti in the next few months as a foretaste of what the 2019 general elections would be.

Despite, the seeming trading range in the market, the just concluded earnings season has revealed the soundness of the Nigerian equity market fundamentals and general economic recovery. It has also given an insight into what the future earnings of various companies will be, regardless of the uncertainties surrounding next year’s general elections. This is because many of the Q1 numbers released beat expectations.
From the over 124 companies filing Q1 2018 earnings so far, most of them have forecast earnings and profit for the third consecutive quarter to reveal the great wealth creating opportunities in Nigerian stock market in 2018 and 2019. With the election year political risks weighing in on the market amidst the growing fear reflecting in the market through mixed sentiment and volatility resulting in sustained price corrections, there is need for stakeholders, particularly government and the regulators to douse tension and renew assurances by word and action.

The prevailing fundamentals of the companies are far better than what they are in 2007 and 2008 the market rallied to 65,000 mark, now we have stronger and better companies with robust earnings power and business models that will drive higher price post-election. Such will however depend on sustenance of the Economic Recovery and Growth Plan (ERGP) to support the upbeat economic indices making Nigeria an investment destination for foreign investors, without leaving out the domestic leg. Also, the rate at which companies beat expectations in the last full year and Q1 earnings reporting seasons was high, compared to that of 2016 and the preceding years. So far, Investdata’s research shows that 48% of companies have beaten analyst estimates, while 54% others surpassed top line revenue estimates. With this level of performance ushering us into May, it could be the strongest reading since 2005.

Equity Indicators Last Week.
Meanwhile, the composite NSE All-Share Index last week shed 26.17 basis points to close at 41,218.72 basis points from 41,244.89bps, representing a 0.06% decline on a low volume of transactions, compared to the previous week’s. The volume index of total transactions for the week was 0.54, with buying pressure at 61% and selling volume, 39% to halt the previous week’s gain, while remaining above the 41,000 psychological line. Similarly, market capitalisation for the period lost N9.5bn, closing at N14.93tr from an opening value of N14.94tr, representing a 0.06% loss resulting from sell-offs in Nestle, Nigerian Breweries and Seplat within the week.

Low and medium cap stocks dominated the advancers’ table for the period under review, as investors realigned their portfolios in the light of stronger numbers, even as the actual Q1 earnings give continue to give direction.
Last week’s profit booking by traders in highly capitalized stocks during the period impacted negatively on the NSEASI’s year-to-date returns, as it contracted at 7.78%, just as growth in market captalistion dropped N1.41tr, representing 9.51% rise from the year’s opening value.

Market Breadth
Market breadth for the week was positive as advancers outnumbered decliners in the ratio of 37:32 on low volume of trades and weak demand for stocks, with Q1 company scorecards still being probed to enable better informed investment decision. Buying pressure dropped from 100% in the previous week to 61%.
NSE index opened the week on a bullish note to extend the previous Friday’s gain by 0.06%, which was sustained in the midweek by 0.09%, a situation that was halted on Thursday as the index pulled back on profit taking to close lower at 0.48%. This gave way on Friday as the index reversed up by 0.27%, to close the week on a marginal loss of 0.06%.

Performance across sectors were largely bearish except the NSE Banking and Industrial goods which were up as a result of price appreciation in Guaranty Trust Bank, UBA and Dangote Cement. Other sectors like Insurance, Consumer Goods, as well as Oil/Gas were down, due to sell-offs seen in NEM, Aiico, Nestle, Nigerian Breweries and Seplat, which dragged the market into negative zone.
Market activities in volume and value were down by 27.32% and 15.46% to 1.33bn shares worth N20.84bn, from previous week’s 1.83bn units valued at N24.65bn.

The best performing stocks for the week were C& I Leasing and Unity Bank that topped the advancers table with 29.50% and 20% gains respectively, closing at N1.80 and N1. 20 per share, on the back of positive market sentiments. The worst performing were Dangote Flour and Eterna Plc which gave up 18.57% and 13.03% to close at N11.40 and N5.74 respectively on profit taking and unimpressive Q1 numbers released recently.

During the week also, the share prices of Regency Assurance and Sterling Bank were adjusted for dividend recommended by their directors. Also, more than 20 companies released their quarterly results to the market.

Market Outlook
We expect, in this full week a mixed performance as investors study corporate earnings and the upbeat economic data to reposition their portfolios in the midst of low valuations in medium and high cap stocks, ahead of Q1 GDP and half year interim dividend on the strength of numbers. Also, we expect the impact of the unconventional monetary policy stimulus to complement measures by the Central Bank of Nigeria (CBN) which recently signed a currency swap deal with its counterpart- the People’s Bank of China (PBoC). The move is expected to reduce cost of importation, forex volatility arising from exchange rate pressure on the Naira, while helping to conserve Nigeria’s external reserve as oil price remains up, supporting economic fundamentals.

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/2018/05/political-risks-cast-shadows-nigerias-robust-economic-prospects-equity-index-stays-red/

NSE Indicators Down On Impact Of Smart Money Exit, As Investors Await Q1 GDP, Inflation Data


The nation’s stock market on Wednesday extended it losing position on a strong volatility and mixed sentiment that signaled the gradual exit of smart money from the market as sell-offs in highly capitalized stocks continues on daily basis across different sectors.
This exit of smart money is despite the impressive Q1 earnings reports from these companies, forcing the All Share Index to open the day south, breaking down the psychological line of 41,000 mark, hitting an intraday low of 40,904.83 basis points. The composite NSE ASI however touched highs of 41,160.18bps to finally finish at 41,080.12bpbs while trying to break down the symmetrical triangle chart pattern and the 20-Day Moving Average which may usher in another correction wave.
Anyone that had observed this market well enough knows that the downtrend has lingered since hitting the January highs and repeatedly bounced off at the support levels. Following the various attempt to reverse up since last Friday, while the top of NSE’s short-term is increasingly becoming an intermediate term.
The exit of smart money and ongoing cautious trading is indicative of the fact that the downtrend is underway. In early trading at the mid-week, the NSE Index has traded above its 20-DMA but has not been able to break down below its downtrend.
The next few trading sessions would go a long way in helping to determine which way the market will ultimately break from this pattern.
Midweek’s market technicals were weak as volume traded was low in the midst of high selling pressure and negative market breadth. Still as a sign of the smart money exit, profit taking was high with selling volume at 69%, while buying pressure stood at 31% on a volume index of 0.87 of the day’s total transaction. The bear run continued on low volume of trade that reflected in the day’s money flow index which weakened to 64.68 points from previous day’s 70.80 points, another indication that funds are leaving the market- the impact smart money, with foreign investors stylishly selling down their positions.

Index and Market Cap
Benchmark Index shed 75.58bps to close at 41,080.12bps after opening at 41,155.80bps, representing a 0.18% decline on a relatively low volume that was lower than the previous day’s. Similarly, market capitalisation went down by N27.4bn to close at N14.88tr from the N14.91tr it opened, also representing 0.18% value loss that further deepened investors losing positions.
Wednesday’s downturn was driven by sell-offs in stocks like: Nigerian Breweries Guaranty Trust Bank, Unilever, UACN Property and UBA, which impacted negatively on the NSE’s Year-to-Date returns, dropping to 7.42%. Market capitalisation gains for the period stood at N1.28tr, representing 9.34% above the year’s opening value.

Mixed Sector Performance
The sectorial performance for the day was mixed as the NSE Industrial Goods and Insurance closed green due to price rally in Dangote Cement, CCNN, AXA Mansard and Linkage Assurance. NSE Oil/Gas was flat for the session, while NSE Banking and Consumer Goods closed red in seeming market reaction to the latest by Moody’s Investment Services released Wednesday morning showing that the Nigerian banking sector would be hampered by non-performing loan (NPL) growth (READ Further); and profit booking. Stocks prices that went north included: Nigerian Breweries, Unilever, Guaranty Trust Bank and UBA, among others
Market breadth was negative as decliners outnumbered advancers in the ratio of 27:22 to make two sessions of down market.
Market activities were mixed as volume went down by 39.5% to 341.06m share from the previous day’s 563.62m units, while value was up by 61.7% to N9.33bn from previous day’s N5.62bn.
Transaction volume was boosted by financial services stocks like Guaranty Trust Bank, Fidelity Bank, FBNH, UBA and Zenith Bank which witnessed increased trading to top the activity chart.
Veritas Kapital and CCNN were the best performing stocks as they topped the advancers’ table, gaining 5.7% and 4.9% respectively to close at N0.37 and N24 each. This was due to market sentiments and forces
On the flip side, Japual Oil and Cutix were the worst performing, after losing 8.3% and 5% respectively to close at N0.44 and N49 purely on profit taking.

Market Outlook
We expect a mixed performance on Thursday, with continued volatility and profit taking as investors reshuffle their portfolios along the line of companies that started the year with stronger numbers as shown in their Q1 financials. Added to this is the nation’s economic fundamentals that are becoming even more robust on a daily basis. The Q1 GDP and April inflation data is also expected to confirm the positive impact of monetary stimulus and favourable extraneous factors like the upswing in oil price, among other global events now closely under watch.
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/2018/05/nse-indicators-smart-money-exit-impact-investors-await-q1-gdp-inflation-data/

IST Hears 54 Cases, Delivers Judgment In 13, Seven Pending


Siaka Isaiah Idoko, chairman/Chief Executive of the Investment & Securities Tribunal (IST), on Monday said it has so far adjudicated 54 cases that had not been heard for two prior years, delivering judgment in 13, representing 24% of them.
Idoko, a lawyer who was appointed with nine other members to the IST board in August last year said 15 others have been resolved and consequently struck out, while consent judgments were obtained in four others by those who agree to settle out of court in four of the cases.
Idoko, who was speaking while sounding the gong to close trading on the Nigerian Stock Exchange (NSE) in Lagos, said some others have been adjourned sine die (indefinitely), just as 21 are pending.

He urged stakeholders of the IST, including the Securities & Exchange Commission (SEC) and the NSE, among others, called for increased funding to enable the tribunal carry out public enlightenment, training and adequate staff remuneration.
These, he said, “cannot happen with the needed commitment from other stakeholders.”
Responding on behalf of stockbrokers and the market, doyen of the NSE, Sam Ndata of Compass Securities Limited, agreed on the need for adequate funding of the tribunal to enable it discharge its duties faithfully, while ensuring the sustenance of an orderly market and investor confidence.

He however charged members of the tribunal, including senior stockbrokers, to ensure also that fund is judiciously used and properly accounted.
Before his appointment, Idoko retired from the Securities & Exchange (SEC Nigeria), where he served as Director before retiring in 2006.
Full-time members of the tribunal are: Jude Udunni, Nosa Osemwengie, Abubakar Ahmed and Albert Otesile; while part-time members include: Emeka Madubuike, Kasumu Garba Kurfi, Edward Ajayi, Onyemaechi Elujekor and Mamman Bukar Zargana.

The IST is a specialized court of records for resolving disputes arising from capital market transactions involving operators and investors, with equal powers as the Federal High Court. It is vested with powers to interpret the Investment & Securities Act (ISA), adjudicating in disputes and controversies, combining the rule of law applicable in traditional law courts with the responsiveness, flexibility, speed and cost effectiveness associated with specialized courts and alternative disputes resolution (ADR) systems.
The Tribunal has specialized knowledge of the capital market/securities and pension’s law and operations due to the varied technical and operational skills of its members and staff which it applies in deciding each case brought before it.

Photo caption: Siaka Isaiah Idoko-Akoh, Chairman/Chief Executive of the Investment & Securities Tribunal (IST) sounding the closing gong to close trading on the Nigerian Stock Exchange (NSE) on Monday, May 7, 2018, in Lagos. He is flanked by Ms. Tinuade Awe, Executive Director, NSE (3rd left); Kasumu Garba Kurfi, a member of the IST (extreme left); and Emeka Madubuike; among others.

https://investdata.com.ng/2018/05/ist-hears-54-cases-delivers-judgment-in-13/

FG Has Saved N200bn By Eliminating Ghost Workers- Says Osinbajo


The Federal Government, on Monday in Abuja said by establishing the Presidential Initiative on Continuous Audit (PICA) in 2016, the Muhammadu Buhari administration has so far saved the country in excess of N200bn through elimination of the once famous “ghost workers” syndrome.
Speaking at the Open Government Partnership (OGP) Week, with the theme: “The Impact of Open Government Partnership to Nigeria’s Anti-Corruption Efforts,” Vice President Yemi Osinbajo, said this has so far complimented the Treasury Single Account (TSA) which it inherited as a “system that existed mainly as an idea, without any committed implementation.”
According to Prof Osinbajo, “since the Presidential Order by President Buhari in August 2015, we have made remarkable progress in expanding the reach of the TSA, so that today, we are almost at 100% compliance.”

Just like the TSA, Prof Osinbajo said the administration is “also aggressively expanding the rollout of the Government Integrated Payroll and Personnel Information System (IPPIS), to ensure that the loopholes that enable payroll fraud are permanently blocked.”
PICA, he continued, also oversees the Whistleblowing Programme launched in December 2016, through which the administration has recovered “N7.8 billion, $378 million and 27,800 pounds sterling, as at March 2018.”
PICA is housed in the Federal Ministry of Finance, to clean up the Federal payroll and pensions systems, across all our Ministries, Departments and Agencies (MDAs).

Osinbajo further stressed that “corruption underlines every aspect of our national life, from our security situation to the state of our economy. It was the reason why, in spite of record oil revenues between 2011 and 2013/14, we saw no savings, and very little investment in infrastructure and jobs, and, in spite of the billions of dollars reportedly invested in security, the Boko Haram insurgency and other cases of insecurity did not abate.”
He also publicly presented the previously launched OGP Nigeria National Action Plan 2017- 2019 at the ocassion.

Photo caption: Participants at the Open Government Programme in Abuja on Monday.

https://investdata.com.ng/2018/05/fg-saved-n200bn-eliminating-ghost-workers-says-osinbajo/

NSE Index Falls Below 41,000bps, Amidst Weakening Money Flow Index


Nigeria’s equity market witnessed an extension of bear dominance on Thursday, as the composite All-Share index tested the 20-Day Moving Average to break down on a low traded volume of 80% selling sentiment. The daily Investdata sentiment reports however reveals a struggle between the bulls and bears to take charge, flipping spots with bearish sentiment deepening from 69% to 80% as Money Flow Index continues to weaken.
Owing to the bearish mood of the market, stocks appear to have remained below their downtrend since the late January highs when the Money Flow Index began to show signs of weakness.

It is surprising that the market continues looking down at a time investors are expected to reposition their portfolio in line with impressive Q1 earnings reports posted by many companies. They ought to have digested these numbers by now, while waiting for Q1 GDP and inflation data to confirm their findings about the general economy.
The NSE index started the day with a slight gap up in the early hours of Thursday’s trading session, before pulling back by the mid-morning to retest midweek lows that broke down the 41,000 psychological line to intraday lows of 40,872.96 basis points from highs of 41,086.20bps. It however retraced up by afternoon to close the day at 40,915.17bps, a pointer to the onset of another corrective wave with lower-low that is following through to the downside on a higher losing momentum.

Market technicals at the end of the day trading session were negative and mixed, as sell offs continued among the high cap stocks, in the midst of low volume high selling pressure and negative market breadth. Thursday’s selling volume stood at 80% and buying pressure of 20% on a volume index of 0.63 of the day’s total transaction. The bearish transition and profit booking by smart money has reflected in the money flow index that is pointing downward at 55.48 points from previous day’s 64.68Points. This is an indication that funds in the market are weakening still.

Index and Market Cap
At the close of trading, the NSE All Share Index (ASI) shed 164.95bps to settle at 40,915.17bps, after opening at 41,080.12bps, representing a 0.40% decline on a low volume that was lower than the previous day’s. Similarly, market capitalisation lost N59.84bn to close at N14.82tr from an opening value of N14.88 trillion, also representing 0.40% value loss that further put investors position into red.
The day’s downturn arose from continued sell-offs in highly capitalized stocks like Dangote Cement, Guaranty Trust Bank, Forte Oil, Oando, Dangote Sugar, Dangote Flour and Flour Mills. This impacted negatively on the NSE’s Year-to-Date returns, which dropped to 6.99%; while market capitalisation gains for the period fell to N1.21tr, shrinking to 8.90% above the year’s opening value.

Bearish Sector Performance
Thursday’s sectoral performance were expectedly bearish as most closed lower, except the NSE Industrial Goods and Insurance that closed up on the strength of sustained value gains in Cement Company of Northern Nigeria (CCNN), as well as Chemical and Allied Products. These reduced the impact of the sell-offs in Dangote Cement, Linkage Assurance, Lasaco and Equity Assurance. The NSE Banking, Consumer and Oil/Gas were in the red as a result of profit taking in Seplat, Forte Oil, Oando, Guaranty Trust Bank, Flourmills, Dangote Sugar, Dangote Flour and others.

Market breadth remained negative as decliners outweighed advancers in the ratio of 26:22 to continue the bear transition.
Market activities were down in volume and value by 28.2% and 56.1% respectively to 244.92m shares worth N4.09bn from the previous day’s 341.06m units valued at N9.33bn.
Transaction volume was boosted by financial services and industrial stocks like Zenith Bank, Access Bank, UBA, Fidelity Bank and CAP which witnessed increased trading to top the activity chart.
The best performing stocks were CCNN and VeritasKapita which topped the advancers’ table gaining 10% and 5.4% respectively to close at N27.05 and N0.39 each. This was due to market sentiments that greeted their impressive numbers, payout and market forces
On the flip side, Niger Insurance and Fidson Healthcare were the worst performing, after losing 7.4% and 5% respectively to close at N0.25 and N5.13 each purely on profit taking and market forces

Market Outlook
Thursday’s was a solid down day as a result of profit booking, which may likely continue on Frday, being the last trading session of the week in the midst of volatility as investors reshuffle their portfolios, banking on companies that started the financial year with stronger numbers as economic fundamentals become more robust on a daily basis. Ahead, the consensus is that the expected Q1 GDP and April inflation data are likely to confirm the positive impact of monetary stimulus and extraneous factors like the upswing in oil price, among other global events now closely under watch.

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/2018/05/nse-index-falls-41000bps-amidst-weakening-money-flow-index/

Amidst Attractive Valuations On NSE, Investors Balance Political Risk, Against Reward


Market Update for Week Ended May 11 and Outlook for May 14-18

Nigeria’s equity market Friday recorded another back-to-back weekly decline as it continued side-ways trending as the sell-off momentum increased despite the healthier state of the economy, market and company fundamentals, all of which have been attested to by the majority of full-year financials and further confirmed by Q1 numbers so far released.
Investors have also continued to ignore the considerably low valuation of equities trading on the Nigerian Stock Exchange (NSE) owing to sustained market corrections in the month of May which has defied the mantra of “sell in May and come back in October” among traders and investors.

Investdata research confirms that this signals the exit of smart money, profit booking and reduced activities in the market amidst cautious trading by players who are very conscious of the political risk as the 2019 general elections approaches. To worsen the political angle is the fact that shadow elections within the political parties to select flagbearers have been anything but without rancor and acrimony, leading to rescheduling of the primaries, even by the ruling All Progressives Congress (APC). The political uncertainty seems to have beclouded the positive impact of rising oil prices in stabilizing and boosting the ongoing economic recovery expected to supports growth, as well as the growth in the nation’s tax net, with the Federal Government’s announcement that the number of Nigerian tax payers has risen above 19 million, even as more efforts are being put into widening the net before the June 30, 2018 deadline provided under the Voluntary Assets and Income Declaration Scheme (VAIDS).

It is true that at any given time in the market cycle there is opportunity to make money, meaning that despite the continued volatility and the seeming uncertainties in the political environment, discerning traders and investors that understand the dynamics of stock markets will know when to play short or long, depending on their investment goals. They must also know the forces behind any stock or general market movement by looking at money flow index which will determine the class and nature of equities to take position in, without losing sight of the need for safety and return on such investment.

The pockets of opportunities in this dicey market situation is what our investdata BUY-and-SELL signal setup provides for market players and followers as an independent research and training company.
NSE Q1 earnings reports were positively surprising as 64% company score-cards came with top and bottom line growth, reflecting improvements during the period, while supporting the possibility of a better-than-expected Q1 GDP data when released by the National Bureau of Statistics (NBS) on Tuesday, May 22, 2018, according to the release calendar. The Q1 numbers should help market players identify opportunities on the exchange and give insight into what to expect from the individual stocks. The very compelling technical confirmation supports a pullback which will give way for correction to continue.

Equity Indicators Last Week
Meanwhile, the composite NSE All-Share Index last week shed 196.41basis points to close at 41,022.31 basis points from 41,2418.72 bps, representing a 0.48% decline on a higher transaction volume, compared to the previous week’s. The volume index of total transactions for the week was 0.64, with selling pressure at 91% and buying volume, 19% to continue the previous week’s losses, while remaining above the 41,000 psychological line. Similarly, market capitalisation for the period shed N71.1bn, closing at N14.86tr from an opening value of N14.93tr, representing a 0.48% loss. This resulted from sell-offs in Nigerian Breweries, Dangote Cement and Guaranty Trust Bank during the week.

Low medium and high cap stocks dominated the advancers’ table in the period under review, as investors realigned their portfolios in the light of stronger numbers, even as the actual Q1 earnings continue to give direction.
Last week’s profit booking by traders in highly capitalized stocks during the period impacted negatively on the NSEASI’s year-to-date returns, as it contracted to 7.27%, just as growth in market captalistion dropped to N1.29 trillion, representing 9.41% rise from the year’s opening value.

Market Breadth
Market breadth for the week was negative as decliners outnumbered advancers in the ratio of 49:35 on higher volume of trades and weak demand for stocks, with Q1 company scorecards still being digested to enable better informed investment decisions. Selling pressure increased from 39% in the previous week to 81%.
The NSE index opened the week on a negative note, halting previous Friday’s gain by losing 0.11%, a situation that was sustained till Thursday, shedding 0.04%, 0.18% and 0.40% on Tuesday, Wednesday and Thursday respectively. The decline was however halted on Friday when the index recovered 0.26%, which was not enough to change the situation as the week closed lower at 0.48%, on the back of strong profit taking during the period.

Performance across sectors were mixed as the NSE Banking, Insurance and Oil/Gas were green, while Consumer and Industrial goods indices closed red, due to sell-offs in Nigerian Breweries and Dangote Cement, the two biggest stocks in the market by capitalization, which pulled the market south.
Market activities in volume and value were up by 19.55% and 24.71% at 1.59bn shares worth N25.99bn, as against previous week’s 1.33bn units valued at N20.84bn.
CCNN and Veritas Kapital were the best performing stocks for the period, topping the advancers table with 29.75% and 27.27% gains respectively and closing at N29 and N0.42 per share, on the back of positive market sentiments arising from their impressive dividend payout and strong numbers. The worst performing were Niger Insurance and Japual Oil which gave up 14.29% and 13.04% of their opening prices to close at N0.24 and N0.40 respectively on profit taking and market forces.

During the week also, the share prices of Berger Paints, Consolidated Hallmark Insurance, Nestle, Pharma Deko, FBNH and Infinity Trust Mortgage Bank were adjusted for dividend recommended by their directors.

Market Outlook
We expect, a mixed performance as actual numbers and the upbeat economic data continue to guide investors as they reposition their portfolios in the midst of low valuations in medium and high cap stocks. Analysts have also started second-guessing the expected Q1 GDP, April Inflation, the next MPC meeting, as well as half year interim dividend of some traditional companies on the strength of numbers. Also, we expect the impact of the rising oil price to boost the fiscal spending to support Nigeria’s economic fundamentals.
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 as interim 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 take 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/2018/05/amidst-attractive-valuations-nse-investors-balance-political-risk-reward/#more

Berger Paints: Poor Liquidity, But Good for Long Term Positioning


Company: Berger Paints Nigeria Plc
Current Market Price: 9.00
Intrinsic Value: N10.91
Latest Cash Div: N0.50
By: Jeariogbe Tunde Segun (Equity Analyst)

Key Financial Tickers:
• The most recent cash dividend paid by Berger Paints was 50k for the financial year ended December 31, 2017.
• By record, Berger Paints has been consistent in rewarding investors on a yearly basis in terms of cash dividend. Although dividend payout dropped in two financial years prior due to the harsh economic environment.
• With low share outstanding, shareholders of Berger Paints are sure of good portion of the company’s income at the end of the year.



Strength
• Although there exists various manufacturers of paint products most of which get to the end users at cheaper rates, Berger Paints enjoys the economics of scale over other local manufacturers.
• Due to its capacity to engage professionals in its industry, Berger Paints is known for its reputation in setting standards in the Nigeria paint industry.
• Considering its strong clientele base, Berger Paint is the company of choice when it comes to major corporate and government projects.
• Berger Paints is the only paint manufacturer in Nigeria operating in the five key paint making segments namely:
 Decorative/Architecture Finishes
 Marine and Protective Coatings
 Automotive/Vehicle Finishes
 Industrial Coatings
 Wood Finishes and Preservers

Challenges
• Tight business environment, especially in the area of:
 Foreign Exchange instability
 Power generation and
 High cost of funds, amongst others
• Tough competition from smaller manufacturers of paint products, in an industry that is highly fragmented, having over 500 operators.
• Most of these operators are local manufacturers who operate in unstructured markets, providing cheap and sometimes substandard product for the masses who bother less about quality. Nevertheless, the structured players control between 65-70% of the market.
• Free entry and exit into the business.

Corporate Figures
• In its full year2017 financial performance figures, turnover improved YoY by 18.81%, while in the first quarter 2018 it only grew marginally above comparable period of 2017 by 5.79%, from N788.65 million in 2017 to N834.33 million
• Operating Profit dropped by 19.64% against 2017 first quarter’s estimate. This is as a result of marginal increase in cost of sales along with the operating expenses
• Consequently, Profit before and after Tax dipped against similar period of 2017 by 20.68% each.
• Reflecting the marginal performance, Retained Earnings improved marginally by 2.20% against last year’s figures.
• See below for details:

Liquidity/Risk Ratios
• Unlike the previous year, the management of Berger Paints, used lower debt through the first three months of 2018. As shown in the below table, debt used through the quarter was 14.23% of equity, compared to 30.55% in the first quarter of 2017. Although this has secured and guaranteed investors’ safety, we are of the opinion that using more debt to finance activities will improve the company’s profitability and improve investors’ take home at the end of the year.
• The current ratio is above unity. This implies that the company has enough financial strength to pay off its short-term obligations as and when due. This confirms the healthy financial state of Berger Paints
• Perhaps due to liquidity issues, the share price of Berger Paints enjoys low investor’s patronage compared to industrial peers.
• Further confirming the healthy financial state of the company is the high Interest Coverage ratio. Please note that Berger Paints controls higher Interest Coveraged compared to industry peers.

Profitability Ratios
• The Cost of Sales margin increased by 7.11% slightly above the increase in the Turnover figure. As shown in the table below, the CoS margin is currently 55.34% as against the 51.67% achieved last year.
• Profit before Tax dropped against the previous quarter’s by 25.02% having moved to 12.36% from 16.48% last year
• Similarly Profit after Tax Margin dipped against 2017 first quarter estimate by 25.02% from 11.21% to 2.59%
• Both Return on Average Equity and Assets are quite low at 2.59% and 1.60%
• In conclusion, we score the management of Berger Paints low, we are of the opinion that it could achieve better profitability ratios.

Efficiency Ratios
• The management fairly outran the Total Asset Turnover achieved in 2017, which only improved by 1.81% from the 18.74% estimated in 2017 to the current 28.84%.
• Equity Turnover is relatively low at 30.77%, a 6.69% improvement from the 28.84% achieved in Q1-2017
• Equity multiplier is considered fair at 1.61x an increase of 4.79% from the 1.54x last financial year.

Investment Ratios
• Reflecting the impact of lower capital used for business through the first three months of 2018, the amount earned by the management of Berger Paints per 50k share was below the comparable period of 2018 by 20.68%.
• The 24k earned is same as 2.57% of the current market price of Berger Paint share, this is a 50.38% of the yield achieved during the similar period of 2017
• Thus, the PE/Ratio jumped by over 100% to 9.71x from 4.82x
• Nevertheless, going by the Price to Book Value ratio, Berger Paints’ share price is fairly priced, as confirmed further by the estimated Book Value of N9.35, same as 0.35% below market price of N9.40.

https://investdata.com.ng/2018/05/berger-paints-poor-liquidity-good-long-term-positioning/#more

Union Bank Q1 Profit Limps To N5.28bn, After 634.06% Impairment Charge


Union Bank of Nigeria Plc, last week also published its unaudited result for the first quarter ended March 31, 2018, with the impact of the marginal rise in gross earnings, robust growth in net fee and commission income, as well as net trading income was wiped off by the net impairment charge for credit losses soared by 634.06%.
Gross earnings for the period rose to N39.466bn, up by 15.04% from the N34.306bn in the previous Q1; with interest income accounting for N31.674bn; as against the N27.698bn; while interest expenses remained flat at N13.843bn, up from N13.069bn. Net interest income stood at N17.831bn, up from N14.629bn, representing a 21.89% rise over the period.
Net impairment charge for credit losses soared to N2.349bn, up by 634.06% from N320m; following which net interest income after impairment charges for credit losses stood at N15.482bn, compared to the previous N14.309bn.

Net fee and commission income increased by 193.94% from N1.139bn in 2017Q1 to N3.345bn; cash recoveries dropped to N304m from N1.257bn, representing a 75.82% rise; even as other operating income slipped to N867m from N1.922bn.
Non-interest income increased to N7.792bn, up by 17.86% from the N6.611bn reported in the prior Q1; Operating Income rose from N20.92bn to N23.274bn; personnel expenses inched slightly to N7.926bn from N7.853bn. Depreciation and amortization increased from N1.396bn to N1.632bn; just as other operating expenses increased from N7.01bn to N8.309bn; bringing total expenses to N17.867bn from N16.259bn, up marginally by 9.89%.

Profit before tax therefore stood at N5.407bn from 4.661bn; income tax dropped marginally to N119m from N142m; even as net profit stood at 5.288bn, 17.02% better than the N4.519bn reported in the corresponding period of 2017; translating to N0.18 of Earnings Per Share, down from 26 kobo.
Total assets for the period fell from N1.455tr in December 31, 2017 to N1.38tr at the end of Q1, representing a N74.331bn or 5.1% decline; with customer loans and advances dropping by N67.846bn or 13.12% to N449.257bn from N517.103bn.
Total liabilities also fell to N1.095tr from N1.109tr, with customer deposits dropping from N802.384bn to N759.097bn; with shareholders’ fund reducing from N345.741bn to N285.652bn.

https://investdata.com.ng/2018/05/union-bank-q1-profit-limps-n5-28bn-634-06-impairment-charge/#more

Hello everyone

Majority of the ghost workers of which were working in ota farm of formal president Obasanjo.

These people actually stole from the government, and they will end up pointing accusing fingers to the government. Thank God for prompt and immediate action by the federal government.

just imagine ghost worker everywhere maka why, something should be done to eradicate this sooner

well done, the federal Government. God is Able

kudos to this great administration,may God continue to bless and uphold you ijn

Presidential Initiative on Continuous Audit (PICA) is the move to reduce Ghost workers and bring in new breed of workers,it will reduce unempolyment and also set the government on the historical path.that citizens will not forget.

Market updates for investors and traders forum will help to educate and encourage the the investors and traders to invest more into Nigeria economy and it will create room for employment

UBA PlcQ1: Earnings Support Price As African Arms Boost Top, Bottom Lines

United Bank for Africa Plc recently released its earnings report for the first quarter ended March 31, 2018, which was a continuation of the trend seen in the 2017 full-year, especially the increasing contribution from its African subsidiaries. This, among others, showed that the group’s pan-African investment over the years is beginning to bear rich fruits for the good of investors, besides diversifying its earnings and profit
Already, the group’s board and management’s commitment to delivering value and boosting earnings power has reflected on the share price and dividend payout, resulting from the strong asset quality and increasing diversification of its sources of its profit.

Specifically, the group achieved 43% and 47% of top and bottom-lines respectively, while at the same time mitigating the impact of the falling interest rate and low yield environment in Nigeria which may continue when the Central Bank of Nigeria (CBN) eventually cuts the benchmark Monetary Policy Rate (MPR).
Ahead of such eventuality, inflation rate at 13.34% has consistently fallen and is now below the 14% MPR. There is also the high possibility of the April inflation rate coming even lower. Analysts and economists expect consumer price index for April to range between 12.70% and 12.95%, thereby piling pressure on the CBN’s Monetary Policy Committee (MPC) to ease rates.

Meanwhile, UBA Plc opened the new financial year, with gross earnings rising by 17.9% from N101.25bn in 2017 to N119.37bn; faster than the slim 6.2% growth in after tax to N23.74bn, from N22.35bn in 2017. Bottom-line was eaten up by increased operating expenses, interest and non-interest expenses, especially when income from trading in fixed income securities and others are falling.

In addition to the implementation of IFRS 9 that made compelled the bank to restate its opening equity balance downward, even when the loan loss charge fell by 53.1% due to the loan book clean-up. UBA’s operating expenses was up by 12.86% to N49.68bn from N44.02bn in 2017 which slashed net profit margin by 9.88% from 22.07% in 2017 to 19.89%. This is impressive, as it reflects cost management efficiency above the 15% international standard. Also, Earnings Per Share for the period limped to 69 kobo from 68kobo in 2017.

The 69 kobo first quarter earnings per share is a replica of the price in 4.03x, which is higher than the 2.07x recorded last year. Book Value for the period grew by 9.85% to N15.72 from N14.31 in 2017. Deposits-Loan and advances ratio is 1.83 and equity multiplier, 7.99 for the period. The improving customer relationship and recovering business environment will impact bottom line and further reduce provision for bad loan.


SOURCES: COMPANY DATA & INVESTDATA RESEARCH

The bank’s shareholders urged management to extract more value from its increasing presence outside Nigeria, as well as the improved service delivery network to further boost performance in the current financial year and deliver N100bn after tax profit. If achieved this will change the banking and investing public perception of UBA Plc, given that perception of financial service providers, as well as their products and numbers is expected to drive share price and sustain positive earnings as value becomes the real factor to go after.

Technical View
The bank’s price action has formed a rising channel for more than two years and has recently pulled back to touch the lower line of the bullish channel on April 20, 2018 before retraced up. Its share price is still trading below 20—50-Day Moving Average. Positive sentiments on its strong numbers and expectations from the expanding drive of the bank has supported this level. The possibility of pullback is high as profit taking by traders and investors is imminent, given that political risk remains a major concern of every investor.

Valuation
UBA’s current share price is considered very attractive at trailing 6.13x of earnings. Its recent financials and upgrade of the 2018 full-year guidance are indicative of expected strong performance that continues to deliver on expectations. The bank is trading at Q1 2018 Price/Book ratio of 0.71x and Price/Earnings of 4.03x. Meanwhile, the Book Value reveals an underpriced situation as its trades below N15.72, representing 34.36% margin of safety. Thus, each unit of UBA is fairly priced at N18.00.

Analysts Opinion/Recommendations
The strong performance of the bank on quarterly basis supported its 100% price appreciation between released date in 2017 and the price it closed on Friday, May 4, 2018. This had outperformed the general market returns within same period. On the strength of reported Q1 numbers, the bank’s full year EPS is projected to be in the region of 258 kobo.


The bank’s strong assets quality and healthy balance shows the commitment of its leadership to managing risk and repositioning its services to enhanced profitability, following which the board hopes to reward investors handsomely in the nearest future is increasing.
Performance in Four Years (2014-2017)
Looking at the bank’s numbers for the period under consideration, it has remained resilient, despite the tight and mixed economic conditions especially since the crash in oil prices and its recovery moves that continue to reflect on the declining inflation rate in oil producing countries. It also impacted economic activities which is one of the factors driving the global growth.

UBA Plc’s top line for the period grew by 59.15% to N461.56bn from N290.02bn in 2014, even as after tax earnings remained stable and upward looking, despite the over regulation in the industry with banks having to make different provisions. This is especially following the adoption of IFRS 9 and the unstable economic situation to record 64.04% growth from N47.91bn in 2014 to N78.59bn.
Book Value for the period had been in the up direction from N8.05 in 2014 to N15.48 in 2017 to indicate constant improvement in profitability that has impacted positively on shareholders fund which grew by 92.30%. Profit margin for the four-year period has been moving up and down but remaining above the 15% international standard. Return on Equity was 14.84% in FY-2017 down from 16.13% in 2015, while Return On Assets experienced a marginal decline for the same period to 1.93% from 2.06% Year-on-Year

SOURCES: COMPANY DATA & INVESTDATA RESEARCH

Ratio Analysis
Investment and profitability ratios of the bank have been mixed for the period under consideration. Its earnings power has been trending up to support price performance as well. EPS moved from N1.45 in 2014 to N2.30 in 2017, just as Price to Earnings Ratio remained unstable due to the up and down movement of the equity price. In arriving at our fair value for the stock, we focused on its historical financial performance and our expectations for full-year 2018 and beyond.
Our Fair Value for UBA shares was calculated using the Price to Book Value method of valuation as well as the Dividend Discount Model comprising our expected dividend estimate for the bank and to adjust for the risk of investing in the Nigerian Financial Services sector. We have placed a buy rating on the stock of UBA.

https://investdata.com.ng/2018/05/uba-plcq1-earnings-support-price-african-arms-boost-top-bottom-lines/#more

International Breweries: Riding On Promises, Awaiting Earnings Confirmation


Company: International Breweries Plc
Current Market Price: N54.40
Intrinsic Value: N18.00
By: Jeariogbe Tunde Segun (Equity Analyst)

Key Financial Tickers
• This analysis reviews the nine-month Audited financials result for the year ended 31st December, 2017. This was compared with the last Audited result for the full-year ended March 31, 2017.
• Explanation behind the different financial years above was the company’s decision to migrate its financial year to December 31, leading to the production of its first December year-end result in 2017.
• During the last financial year, International Breweries concluded its merger with Intafact and Pabod, following which it transferred all assets, liabilities, along with employees, real and intellectual property rights to International Breweries Pls. Please note that the consideration of the transfer were transferred to the shareholders of Intafact and Pabod in form of ordinary shares of International Breweries Plc
• On the strength of the above, on December 14, 2017 a total of 5,301,612,656 ordinary shares of International Breweries Plc were added to the Daily Official List of The Exchange.
• With this listing, the total issued and fully paid up shares of International Breweries Plc has now increased from 3,294,249,280 to 8,595,861,936 ordinary shares.
• The shareholding structure of the company shows that a single portfolio investor has 27.66% stake, 26 foreigners hold 47.38% while Corporate bodies and Individuals control 10.39% and 7.44% respectively.


Strength
• The company is currently being managed by Anheuser-Busch InBev which prides itself as the world’s largest brewer and one of the leading consumer product companies.
• AB InBev acquired SABMiller (in 2016). Before then, SABMiller was the majority shareholder in International Breweries. As at March 31, 2017 the company owned 72.17% of International Breweries.

Challenges
• Tight business environment, especially in the area of:
 Foreign Exchange instability
 Power generation hiccups and
 High cost of funds
 Amongst others
• International Breweries plays the brewing market with the likes of Nigerian Breweries and Guinness Plc. Without much argument, one will safely conclude that it is more of a fox and elephant challenge, compared to its two giant competitors.
• These two giant brewers dominate major business spheres within the country and also boasts of a number of nationally accepted products.
• The reduced purchasing power of the Nigerian citizens is another challenge posing against the company’s business.

Corporate Figures
• Despite the dwindling sales in the brewing market, International Breweries improved Turnover by 11.67% against the comparable year. Please understand that the figures include the turnover figures of the two new babies recently acquired
• Arising from the increased operating expenses and finance cost, the company reported a Loss before Tax of N3.99 billion as against the Profit before Tax of N8.08 billion in March 2017
• Nevertheless, the loss was mitigated by the impact of the N4.758 tax assets that returned earnings to a profit line of N1.429 billion which is 38.18% above the N1.034 billion reported in the last audited result
• Also, following from the acquisition, the balance sheet items soared against the last audited financials:
 Retained earnings grew to N30.55billion from the N4.71 billion
 Total Assets increased by 464.51% from N44.962 billion to N253.82 billion
 Total Liabilities equally appreciated by 589.24% from N31.08 billion to N211.44 billion
 And Net Assets now stand at N42.375 billion as against the previous N13.87 billion


Liquidity/Risk Ratios
• Slightly above its peers, International Breweries’ Debt to Equity ratio stood at 64.55% as against the industry average of 60.77%
• At 0.20x current ratio, it became glaring that the company will find it very tough to settle its short term liabilities when such falls due. Although the industry average stood slightly below a unit, the 0.22x is quite on the low side
• Nevertheless, International Breweries seems to be enjoying more investors’ patronage when compared to others in its sector as it controls a beta value slightly above a unit
• With interest coverage of 1.56 International Breweries though may not need to assess more interest yielding loans, has enough capacity to finance existing loans.


Profitability Ratios
• The Cost of Sales margin increased by 16.46% from the 53.64% of last financial year to the current 62.47%. In our opinion the management of International Breweries should pay keen attention to this ratio, as it holds the key to the profitability of the company
• Profit Margin on the other hand stood above comparable year’s by 23.75%
• Both Return on Average Equity and Assets are low as shown in the table below
• We hold mute on our score for the management of International Breweries due to the new changes occurring in the company. We are of the opinion that few other financials will be required for justification.


Efficiency Ratios
• Total Asset Turnover stood below the last audited estimate by 80.22% from 72.75% to 14.39%
• Equity Turnover though dropped against comparable year, remains attractive at 86.20%
• Confirming the above, Equity Multiplier stood high at 5.99x as against the 3.24x
• See below for other efficiency ratios


Investment Ratios
• Due to the drop experienced in the income statement, Earnings per Share dropped by 47.55% against last result. The current earnings is N0.17 as against the previous N0.32. Please understand that other factors responsible for this drop is the increase in the share outstanding of International Breweries as noted above
• Giving the high valuation on International Breweries share price by investors’ sentiments, the Earnings Yield was close to zero at 0.31% as against the previous estimate of 0.98%.
• Confirming the high sentiments at play on the share price of International Breweries, is the over bloated PE/Ratio of 327.16x from 101.66x.
• Also, the overpriced state of the stock was further established by the Price to Book Value of 11x from 7.57x, and the estimated Book Value of N4.93.


Valuation
• Major consideration while placing value on the share price of International Breweries was its zero-dividend situation. Although the management promised better incentives for investor in the near future, we are of the opinion that until same is translated into realities into its figures, it remains in the future, hence our recommendation below.

Recommendation: In our opinion, International Breweries has worked very hard to position itself against market competition and taken time to ensure its survival. We hold out valuation in favour of the investors. Therefore, our valuation model has been set to consider a safe haven for investors. On the strength of the above, we have fairly placed each unit of International Breweries at N18.00.

https://investdata.com.ng/2018/05/international-breweries-riding-promises-awaiting-earnings-confirmation/#more

Eurobond: Nigeria’s Borrowing Cost Drops To 13%- Adeosun


Finance Minister, Mrs. Kemi Adeosun, on Sunday assured that the Federal Government strategy of refinancing maturing domestic debt (Treasury Bills) with the recently issued $2.5bn Eurobond is yielding the desired results.
Taking to her personal twitter handle, Adeosun said the Eurobond was in a bid to bring down borrowing costs, which is being achieved currently with a 5% drop in the Federal Government’s average borrowing cost from 18% to 13%.
Encouraged by the result, she tweeted: “We will continue to work very hard on debt service cost.”

She also announced that the 2017 fiscal year may close with the Federal Government’s capital spending rising above N1.5tr, “which is higher than what we achieved in the 2016 budget. We’re also looking forward to the passage of the 2018 budget by the National Assembly.”
She reiterated the news that over five million new taxpayers have so far been added to the country’s tax base over the past two year, applauding the Federal Inland Revenue Service (FIRS) and other tax authorities at state level for doing a great deal of work on expanding the tax base and enforcing tax payment.
This, she hinted is in line with the determination of government to diversify its revenue base.
The minister equally used the opportunity to advise Nigerians to “trust the Muhammadu Buhari administration to deliver on its promises of improving the economy and providing sustainable infrastructure development.

“All around the country, we have rail, power and road projects ongoing, creating jobs, and improving citizens’ lives.”
Mrs. Adeosun, had on Thursday noted that despite the five million growth in the number of tax-compliant Nigerians from 14m to 19m within a space of two years, there are still 46m others that are economically active people outside of the tax net.
Addressing a World Bank Mission of 10 Executive Directors led by Patrizio Pagano in Abuja, Adeosun spoke of the Federal Government’s desire to mobilise more revenues by growing the number of tax-compliant people so as to drive its growth plan for the economy.
“We have been able to grow the tax payers’ base to 19 million in two years from the 65 million economically active people who are not tax complaint,” she said.

Besides further growing the number of tax-compliant persons, Adeosun assured that the administration would accelerate Nigeria’s growth level and also improve the ‘Ease of Doing Business’ in the country.
“The Nigerian Government is working towards accelerating the country’s growth level. The growth will be underpinned by stimulating the ‘Ease of Doing Business’ in Nigeria and improving our capital expenditure which we have done in the last two years.
“Nigerians should trust the Government to deliver on its promises of improving the economy and providing sustainable infrastructure development. We are very optimistic but we will remain vigilant,” Adeosun had said.

https://investdata.com.ng/2018/05/eurobond-nigerias-borrowing-cost-now-13-adeosun/#more

Are you Competent?

Zig Ziglar once said "Others can stop you temporarily. You are the only one who can do it permanently."

Few people are adept or successful at anything at first. Me included.

The reason only a tiny percentage of the population achieves any significant success or wealth through stock is that few are willing to go through the process of what it take to achieve in the stock market; and there is no shortcut.

In fact, everybody has to go through four levels of learning every single time, and often, in the process - fail, re-group and begin again.

Most people blame others like government policies, currency fluctuation, political instability for stopping their progress, but in truth there's only one person who can put on the parking break and that person is YOU.

Many people drive around with the break on without knowing it, or once awareness arrives, don't know how to lift their foot off of it.

That is why I have been organizing seminars and making them available in different formats; created a membership group; make a one-on-one training available in other awaken your awareness and also help you lift your foot from the brake (loosing your money in the stock market).

Happy Trading,
Ambrose Omordion

PS: Unconscious Incompetence; Conscious Incompetence; Conscious Competence; Unconscious Competence.
So, Don't stay unconsciously incompetent. Move up one level now through disciplined self education regarding the stock market.

Call 08028164085,08032055467 or send an email to ambroseconsultants@yahoo.com.
http://investdataltd..com/2018/05/are-you-competent.html