₦airaland Forum

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

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

Brokerage

Brokerage is an investment terminology which refers to the business that a broker is engaged in or the charge that a broker makes for its services.
It can also refers to a company that helps its clients to buy and sell investment products like stocks,bonds etc.

A stock brokerage firm will transact equities for its clients in return for a fee or commission charged on each transaction whether buying or selling.

The firm broker may also advise their clients on how to improve their investment portfolios performance, assist their clients in managing their brokerage account or inform them of investment opportunities that can arise from time to time .

Investdata Academy
https://investdataltd..com.ng/2018/04/brokerage.html

Book Value

Book Value is a company's assets minus its liabilities and sometimes referred to as stockholder's fund, owner's equity or simply equity.

The book Value of equity per share is one factor that investors can use to determine whether a stock price is undervalued or overpriced. If a company can increase its book value of equity per share by growing it profitability to boost retained earnings. (BVPS),investors usually view the stock as more valuable and the stock price increases.

Book Value per share is the amount of money a holder of a common share would get should a company were to liquidate.

BVPS can be calculated as thus:
BVPS = shareholders funds/ number of shares outstanding
OR
BVPS= total shareholder equity- preferred equity/total outstanding shares.

Investdata Academy
https://investdataltd..com.ng/2018/04/book-value.html

Profit Margin (PM)


Profit Margin could be defined in several ways such as these; PM is a ratio of a company’s profit divided by its revenue. Or it could be defined as the percentage of revenue remaining after all costs, depreciation, interest, taxes and other expenses have been deducted.
It indicates the profitability of a business. The higher the number, the more profitable the business.

The importance of Profit Margin to an investor is to compare the success of a company to another, then with Profit Margin an investor can use it to see how he/she improves over time.

Formula for calculating Profit Margin is:
PM = (R-C)/R * 100
Where;
PM = Profit Margin
R = Revenue
C = Cost of goods sold
Supposing the revenue for an item is #50 and the cost is #30. We have (#50-#30)/#50 * 100 = 40%

Investdata Academy

http://investdataltd..com/2018/05/profit-margin-pm.html

World Bank Directors Parley FG, Govs, IMF Laments Africa’s Rising Debt, Deficits


A team of 10 World Bank executive directors will on Wednesday meet with high-level Federal and State Government officials as well as leaders of the organized private sector in Nigeria, coming against the backdrop of concerns over the growing risk of debt distress among Sub-Saharan African countries, resulting from heavy borrowing and gaping deficits, despite an overall uptick in economic growth.
This is the summary of the economic outlook for the region, a publication of the International Monetary Fund, a member of the World Bank Group, according to Reuters on Tuesday.

An estimated 40% of low-income countries in the region are now in debt distress or at high risk of it, Reuters quoted the IMF report as saying, warning that refinancing such debt could soon become costlier.
Six countries – Chad, Eritrea, Mozambique, Congo Republic, South Sudan and Zimbabwe – were judged to be in debt distress at the end of last year. And the IMF’s ratings for Zambia and Ethiopia were changed from moderate to “high risk of debt distress.

“The current growth spurt in advanced economies is expected to taper off, and the borrowing terms for the region’s frontier markets will likely become less favourable which could coincide with higher refinancing needs for many countries across the region,” it said.
Such concerns also follow the seeming competition among African countries to access the international debt markets and issue record levels of debt in foreign currencies, spurred on by insatiable investor demand for yields.

Nigeria’s Federal Government has tapped into the market for various bonds, proceeds of which it is using to pay off more expensive domestic debt, thereby reducing its cost of debt servicing.
IMF Africa Director Abebe Aemro Selassie told Reuters at the launch of the economic outlook for the region in Accra on Tuesday: “What really we’re concerned about is the pace of increase, rather than the average.
“What we’re calling for right now is that those countries are going to need to go through fiscal consolidation,” he said, adding that oil producers and other resource-dependent economies were seeking the sharpest growth in their debt loads.
The fund projected the rate of economic expansion would rise to 3.4 percent this year, up from 2.8 percent in 2017, boosted by global growth and higher commodity prices.

Slower growth in South Africa and Nigeria – the continent’s two largest economies – weighed on the region-wide average, but the IMF expects growth to pick up in around two-thirds of African nations. However, under current policies, that rate is expected to plateau below 4 percent over the medium term.
The report said African governments issued a record $7.5bn in sovereign bonds last year, 10 times more than in 2016, just as they have issued or plan to issue over $11bn in additional debt in the first half of 2018 alone.

Foreign currency debt increased by 40% from 2010-13 to 2017 and now accounts for about 60% of the region’s total public debt on average, IMF data showed. Average interest payments, meanwhile, increased from 4% of expenditures in 2013 to 12 percent in 2017.
The IMF conceded that Africa’s enormous needs will continue to demand heavy investments to build infrastructure and social development. But to do so while avoiding the risk of a debt trap, the continent, which currently has the lowest revenue-to-GDP ratio in the world, will need to become more self-reliant.

“Borrowing to finance spending is part of the macroeconomic policy tool kits which all countries use,” Selassie said.
“But over the medium to long-term they have to rely more on domestic revenues, tax revenues to address their development spending needs.”
Meanwhile, a statement by Oluyinka Akintunde, spokesman to Nigeria’s Finance Minister, said the World Bank team will meet with the Vice President, Prof. Yemi Osinbajo; Minister of Finance, Mrs. Kemi Adeosun and some Governors to among others access the country’s development priorities.

They would also get first-hand impression of the challenges that both the Federal and State Governments face in implementing development projects as well as ensuring good governance.
“It will further enhance the goal of the Bank for member-countries and the effectiveness of the Executive Directors in providing the necessary support,” the statement added.

Specifically, the visitors, comprising 10 Executive Directors of the bank: Executive Directors for Switzerland, France, Italy, Nordic, Peru, Germany, South Africa (representing Angola, Nigeria and South Africa), Burkina Faso (representing Francophone Sub-Saharan Africa), Zimbabwe (representing Anglophone Sub-Saharan Africa), United Kingdom and Indonesia, will discuss the World Bank’s ongoing projects in the country.

The World Bank officials will also meet the organised private sector in Lagos as well as undertake a tour of LAPO Microfinance project in Lagos and Azura Power Plant in Edo State.

https://investdata.com.ng/2018/05/world-bank-directors-parley-fg-govs-over-external-debt-deficits/#more

FOREX Market Gets additional $210m CBN Boost


The Central Bank of Nigeria (CBN), on Tuesday, May 8, 2018, boosted the inter-bank Foreign Exchange market with another sum of $210m.
The Bank again offered the sum of $100m to authorized dealers in the wholesale segment of the market. The Small and Medium Scale Enterprises (SMEs) segment received the sum of $55 million while the sum of $55m was apportioned to invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA).

A statement from the Bank’s Acting Director, Corporate Communications Department, Isaac Okorafor, confirmed the figures and reiterated CBN’s capacity to continue to sustain the foreign exchange intervention.
Okorafor urged authorized dealers to help sustain the confidence in the foreign exchange market by continuing to honour requests from customers with genuine needs.

It will be recalled that the Central Bank of Nigeria last Friday, May 4, 2018 intervened in the Secondary Market Intervention Sales (SMIS) to the tune of $349.34m.
Meanwhile, the Naira, on Tuesday, May 8, 2018, continued to maintain its stability in the FOREX market, exchanging at an average of N362/$1 in the BDC segment of the market.

https://investdata.com.ng/2018/05/forex-market-gets-additional-210m-cbn-boost/#more

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

Scrip Dividend

A scrip dividend is a scrip or bonus issue of shares made at no charge to shareholders in proportion to their holdings in lieu of a cash dividend.

It usually takes two forms either as a promissory note discountable before its due date which is called liability dividend or as an ordinary shares reflecting capitalization of a part of reserves which is also known as capitalization issue.

Companies short on cash � often pay scrip dividends instead of cash dividends to retain cash for expansion.
Recently, Stanbic IBTC offers a scrip dividend option for 3-year to any of its willing shareholder.

Investdata Academy

http://investdataltd..com/2018/05/scrip-dividend.html

Sliding Inflation: With No Major Inflow, Inter-bank Rates May Drop

The OBB and Overnight rates in the inter-bank market rose to 7.58% and 8.17% respectively on Monday on the back of system outflows for Wholesale FX interventions by the Central Bank of Nigeria (CBN).
This expectedly squeezed system liquidity, following which market operators and investors expect rates to drop marginally, in the face of no significant funding pressures expected at Tuesday’s trading session.

Bond market
The market activities kicked off on a very quiet note as foreign investors remain on the sideline for the holiday.
Market players sold down on some medium maturities. Mixed sentiments is expected on Tuesday, following the speculations on a possible decline in inflation rates when the Consumer Price Index (CPI) is released by the National Bureau of Statistics (NBS) soon which market players are speculate already.

Treasury Bills
The same sentiment persists for the Treasury Bills market which was relatively quiet with slight selloff on short maturities, with expected outflows for wholesale FX
interventions by the CBN. Traders also expect sentiments in the market to remain mixed as market players anticipate another OMO auction on Thursday.

https://investdata.com.ng/2018/05/sliding-inflation-no-major-inflow-inter-bank-rates-may-drop/#more

W’Africa’s Capital Market Regulators To Design Common Cross-Border Listing Rules


Apex capital market regulators within the West African region under the aegis of the West African Securities Regulatory Authorities (WASRA) have agreed to fashion a set of rules that would guide seamless cross-border listing within the sub-region.

A statement by the Nigeria’s Securities & Exchange Commission (SEC) said the body saddled with the responsibility is at the verge of concluding the assignment of producing a mutually acceptable basis for cooperation and consultations in a bid to foster market integration in the region.
The rules on cross border trading and settlement of securities, which is among the highpoints of a meeting of WASRA in Budapest, Hungary, Sunday on the sidelines of the 43rd Conference/meeting of the International Organisation of Securities Commissions (IOSCO).

It would, among others, allow foreign companies carry out their businesses within the region, while helping to deepen capital markets.
The statement quoted Chairman of WASRA and Executive Secretary of Le Conseil Regional de l’Epargne Publique et des Marches Financiers (CREPMF), Abidjan, Mory Soumahoro, as announcing the decision, just as he spoke of plans for establishment of a regional bond issuing framework for infrastructure financing.

Work on modalities of the bond which may become the first cross-border instrument issued in the sub-region, he noted, has commenced.
WASRA said it is working towards building relationship between WASRA and ECOWAS Commission; the integrated supervision model needed for the establishment of cross border transaction and issuers; the development of the WASRA website and the monitoring framework and review and recommendation of appropriate risk management framework for the supervision in the region (issuance of cross border).

Commenting on the bond issuance, Acting Director General, SEC Nigeria, Ms. Mary Uduk commended WASRA members on the desire to building a strong and competitive regional market that will rank at par with the markets of other regions of the world, and more importantly, in the areas of transparency, disclosure, efficiency, accountability and indeed, investor protection.

She expressed the commitment of SEC Nigeria to help achieve the objectives of WASRA, stressing the imperative of a cohesive collaboration between the relevant regulators, operators and other stakeholders in West Africa, and the need to ensure that adequate resources are devoted.
The meeting was attended by the SEC’s Acting Executive Commissioner, Operations, by Isyaku Tilde, who represented Uduk; DG SEC-Ghana, Rev. Daniel Obgarmey Tetteh and Mory Soumahoro, the Secretary General of CEPMF (Chairman WASRA). Others include the board Chairman of SEC Ghana, Dr. Yeboa Amoa; members of the Technical Committee (TC) from SEC Ghana, Jacob Aidoo, Emmanuel Appiah, the Secretariat, Harouna Ouedraogo and three observers from SEC Nigeria: Tony Iloka, Mrs Efe Ebelo and Ms Nneka Okonkwo.

WASRA is a regional organization for West African countries that aims to fashion out modalities and to establish an umbrella body as mutually acceptable basis for cooperation and consultations aimed at fostering market integration in the region. WASRA, established in 2015, is the recognized forum for capital markets regulators in the West African Sub Region

Photo Caption: Ag. Executive Commissioner Operations, Securities and Exchange Commission Nigeria (SEC), Isyaku Tilde; Board Chairman SEC Ghana, Dr. Yeboa Amoa, Chairman WASRA and Executive Secretary of Le Conseil Regional de l’Epargne Publique et des Marches Financiers (CREPMF), Abidjan, Mr. Mory Soumahoro and DG SEC-Ghana, Rev. Daniel Obgarmey Tetteh at the meeting of WASRA in Budapest, Hungary.

https://investdata.com.ng/2018/05/wafricas-capital-market-regulators-design-common-cross-border-listing-rules/#more

Another Volatile Session As Investors Await Budget Passage, Inflation Data



Trading on the Nigerian Stock Exchange (NSE) again had another very volatile session to start the week Monday on a flat note, as the day opened on a little gap up with many stocks surging in few minutes to kick off the session. This lasted till mid-morning reaching intraday highs of 41,233.42 basis points before succumbing at midday to profit taking, hitting lows of 41,031.15bps. It however made recovery moves in the last trading minutes of the day, closing marginally up.
The market on a daily time frame have been trading above its 20 day moving average for six days so far as the current seeming wave 3 gets extended.

The increased buying pressure of 100% as revealed by market technicals in the midst of positive market breadth and low traded volume indicates that investors are still studying and analyzing the Q1 earnings reports and economic data. Moreover, this is happening at a time oil price is set to hit $100 at the international market, after crossing the $70 mark on the strength of new sanctions placed on Iran.
Followers of Investdata will recall that in our review of 2017 and outlook for 2018, we mentioned that oil will trade above $70 (READ). This has already happened, helping to boost Nigeria’s economic fundamentals amidst hope that the National Assembly will stay true to its promise to pass the 2018 Appropriation Bill into law this week as announced by Senate President Bukola Saraki on Monday. Recall also that the budget has a benchmark of $45 per barrel.

Also noteworthy is the recent signing of a $2.5bn currency swap agreement between the Central Bank of Nigeria (CBN) with its counterpart- the People’s Bank of China (PBoC), which is another unconventional monetary policy tool to propel economic growth. As has been explained (READ), this strategic move is of great benefit to the Nigerian economy in the following ways: It will boost returns on investment for importers as currency transaction cost would drop, just as there would be less pressure on the Naira, among others.

The demand for stocks on Monday were 100%, while selling volume was 0% on a volume index of 0.55 of the day’s total transaction. The bull transition was extended despite profit booking in high cap stocks that reflected in the day’s money flow index, which was slightly weakened at 49.11 points. Compared to last Friday 49.36 points, this is an indication that funds level in the market is still weak.

Index and Market Cap
All Share Index for Monday’s session gained a marginal 14.70 basis points to close at 41,233.42bps after opening at 41,218.72bps, representing a 0.04% growth on a low volume that was lower than the previous day’s. While market capitalisation was down by N16.3bn to close at N14.92tr from an opening value of N14.93tr, also representing a 0.11% drop in investors’ position, as the share price of Nestle, Berger Paints, Pharma Deko and Consolidated Hallmark Insurance were adjusted for dividend recommended by their directors.

The upturn was driven by value gain in stocks like: Dangote Cement, Guinness, 11 Plc, Oando, Eterna and C/I Leasing that impacted positively on the NSE’s Year-To-Date returns, lifting to 7.8%; while market capitalisation gains for the period stood at N1.3tr, representing 9.59% above the year’s opening value.

Bullish Sector Performance
The sectorial performance was largely bullish except for the NSE Banking and Consumer goods that closed red due to losses suffered by Guaranty Trust Bank, Zenith Bank, FBNH, Nestle, NB and Honeywell. Other sectors that were in green like the general market are NSE Industrial, Insurance and Oil/Gas.

Market breadth was positive as advancers outweigh decliners in the ratio of 21:18 to continue the seeming two-day bull transition.
Market activities were down in volume and value by 21.9% and 39.3% respectively to 221. 4m shares worth N2.57bn from previous day’s 283.63m units valued at N423bn.

Transaction volume was boosted by financial services stocks like Lasaco, Guaranty Trust Bank, Sovereign Trust Insurance, Mutual Benefits and Sterling Bank, which witnessed increased trading to top the activity chart.
The best performing stocks for the day were Eterna and C/I Leasing that topped the advancers’ table with gain of 9.76% and 5% respectively to close at N6.30 and N1.89 each. This was due to market sentiment and expected dividend.
On the flip side, Unity Bank and UACN Property which shed 5% and 4.87% respectively to close at N1.14 and N2.34 purely on profit taking and market forces.

Market Outlook
We expect a positive performance on continued volatility and profit taking as investors reshuffle their portfolios along the line of companies with stronger numbers as shown in their economic fundamentals and 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.

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/another-volatile-session-investors-await-budget-passage-inflation-data/#more

W’Africa’s Capital Market Regulators To Design Common Cross-Border Listing Rules


Apex capital market regulators within the West African region under the aegis of the West African Securities Regulatory Authorities (WASRA) have agreed to fashion a set of rules that would guide seamless cross-border listing within the sub-region.

A statement by the Nigeria’s Securities & Exchange Commission (SEC) said the body saddled with the responsibility is at the verge of concluding the assignment of producing a mutually acceptable basis for cooperation and consultations in a bid to foster market integration in the region.
The rules on cross border trading and settlement of securities, which is among the highpoints of a meeting of WASRA in Budapest, Hungary, Sunday on the sidelines of the 43rd Conference/meeting of the International Organisation of Securities Commissions (IOSCO).

It would, among others, allow foreign companies carry out their businesses within the region, while helping to deepen capital markets.
The statement quoted Chairman of WASRA and Executive Secretary of Le Conseil Regional de l’Epargne Publique et des Marches Financiers (CREPMF), Abidjan, Mory Soumahoro, as announcing the decision, just as he spoke of plans for establishment of a regional bond issuing framework for infrastructure financing.

Work on modalities of the bond which may become the first cross-border instrument issued in the sub-region, he noted, has commenced.
WASRA said it is working towards building relationship between WASRA and ECOWAS Commission; the integrated supervision model needed for the establishment of cross border transaction and issuers; the development of the WASRA website and the monitoring framework and review and recommendation of appropriate risk management framework for the supervision in the region (issuance of cross border).

Commenting on the bond issuance, Acting Director General, SEC Nigeria, Ms. Mary Uduk commended WASRA members on the desire to building a strong and competitive regional market that will rank at par with the markets of other regions of the world, and more importantly, in the areas of transparency, disclosure, efficiency, accountability and indeed, investor protection.

She expressed the commitment of SEC Nigeria to help achieve the objectives of WASRA, stressing the imperative of a cohesive collaboration between the relevant regulators, operators and other stakeholders in West Africa, and the need to ensure that adequate resources are devoted.
The meeting was attended by the SEC’s Acting Executive Commissioner, Operations, by Isyaku Tilde, who represented Uduk; DG SEC-Ghana, Rev. Daniel Obgarmey Tetteh and Mory Soumahoro, the Secretary General of CEPMF (Chairman WASRA). Others include the board Chairman of SEC Ghana, Dr. Yeboa Amoa; members of the Technical Committee (TC) from SEC Ghana, Jacob Aidoo, Emmanuel Appiah, the Secretariat, Harouna Ouedraogo and three observers from SEC Nigeria: Tony Iloka, Mrs Efe Ebelo and Ms Nneka Okonkwo.

WASRA is a regional organization for West African countries that aims to fashion out modalities and to establish an umbrella body as mutually acceptable basis for cooperation and consultations aimed at fostering market integration in the region. WASRA, established in 2015, is the recognized forum for capital markets regulators in the West African Sub Region

Photo Caption: Ag. Executive Commissioner Operations, Securities and Exchange Commission Nigeria (SEC), Isyaku Tilde; Board Chairman SEC Ghana, Dr. Yeboa Amoa, Chairman WASRA and Executive Secretary of Le Conseil Regional de l’Epargne Publique et des Marches Financiers (CREPMF), Abidjan, Mr. Mory Soumahoro and DG SEC-Ghana, Rev. Daniel Obgarmey Tetteh at the meeting of WASRA in Budapest, Hungary.

https://investdata.com.ng/2018/05/wafricas-capital-market-regulators-design-common-cross-border-listing-rules/#more

Investdata weekly sentiment reports

NSEASI buy 86% sell 14% volume index 0.69 MFI 49.36
Access buy 0% volume index 1.38 MFI 85.14
CIleasing buy volume index 10.07 MFI 91.31
Dangote flour buy 0% volume index 1.65 MFI 12.58
Dangote sugar buy 85% sell 15% volume index 1.18 MFI 39.23
Diamond buy MFI 90.26
Eterna buy volume index 2.14 MFI 45.14
Fbnh buy 50% sell 50% MFI 57.04
Fcmb buy 20% sell 80 MFI 82.85
Fidelity buy 18% sell 82% volume index 0.73 MFI 38.81
Fmn buy volume index 0.72 MFI 64.98
Hony flour buy MFI 74.33
Lvstk buy MFI 45.15
Transcorp buy 25% sell 75% MFI 43.72
Uba buy 0% MFI 95.71
Wapco buy 0% volume index 2.89 MFI 45.96
Zenith buy 67% sell 33% MFI 81.78

NSEASI buy 61% sell 39% MFI 43.80
Access buy 75% sell 25% volume index 0.72 MFI 24.05
Caverton buy 0% volume index 0.86 MFI 39.37
Ccnn buy 95% sell 5% MFI 88.04
Dangote cement buy 68% sell 32% volume index 1.84 MFI 43.64
Dangote sugar buy 36% sell 64% volume index 0.77 MFI 46.44
Eterna buy 11% sell 89% volume index 1.09 MFI 66.19
Fmn buy 80% sell 20% volume index 1.19 MFI 58.74
Nestle buy 63% sell 37% volume index 0.72 MFI 53.67
Transcorp buy 33% sell 67% MFI 36.68
Uacn buy MFI 59.42
Uba buy 60% sell 40% volume index 1.76 MFI 72.49
Ubn buy volume index 0.77 MFI 38.11
Wapco buy 0% volume index 0.99 MFI 45.20
Zenith buy 40% sell 60% MFI 47.31

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

Liquid and Illiquid Market

Liquid market is a type of market whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. Cash is,of course still considered as the standard for liquidity,because it can be easily converted into other assets.

Illiquid market is a market in which there is difficulty in buying or selling assets due to lack of interested buyers or sellers. Assets in illiquid markets may have value and in many cases, very high value, but are simply difficult to either buy or sell. Examples of illiquid markets include real estate, fine arts, some stocks with low trading volume and collectibles.

Investdata Academy
http://investdataltd..com/2018/05/liquid-and-illiquid-market.html

Never Give up...Keep Pushing

Your hardest times often lead to the greatest moments of your life. Keep going. Tough situations build strong people in the end.” “There are five important things for living a successful and fulfilling life: never stop dreaming,never stop believing, never give up,never stop trying, and never stop learning.”

I have to be sincere with you regarding the bearish Market. However, that does not mean we should give up instead use the approach I adopted after the crash of the stock market in 2008.

In fact, nothing is worse compared to that time. I lost everything and to make things worse, I had no other job apart from providing financial services.

Just like the quotation above, I never stopped dreaming,never stop believing, never give up,never stop trying, and never stop learning.

Learning was a core part of my success because it dawn on me then and obviously that, it is what we don't know that affects us. So, while everyone was complaining about the crash. I was busy doing research on how avoid similar reoccurrence.

In some situation, I had to sell some of assets because learning is the principal thing; therefore get wisdom: and with all thy getting... whether I like it or not when things become tougher, I will still sell my assets to foot hip of bills so why not invest in myself. This has actually paid of today.

Hence, I am imploring you to seize the current bearish Market to enhance your knowledge especially for those

1.who did not subscribe to the buying and selling signal subscription
2. subscribed but invested in other stocks I did not make available because of the high level of risk involve.
3. subscribed but invested in others stock prescribed by other stockbrokers.
4. Who haven't bought my materials call 08028164085,08032055467 NOW.
5. You have bought my but kept it as a souvenirs. Why! Please get started Now...

Happy Trading,
Ambrose Omordion
08028164085,08032055467
http://investdataltd..com/2018/05/never-give-upkeep-pushing.html

Infographic Explaining The CBN, PBoC Currency Swap Deal


I just came across this infograph that explains the currency swap deal between the Central Bank of Nigeria (CBN) and the People’s Bank of China (PBoC) penultimate Friday, April 27, 2018.
Source: Facebook page of /abdulmumin AbdulSalam Isa.

https://investdata.com.ng/2018/05/infograph-explaining-cbn-pboc-currency-swap-deal/#more

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/

How To Be Safe in a Downturn Market

Even as the market continues to nosedive investors feel increasingly nervous about living through it.

This is particularly true for people in retirement or approaching it, since recent market drop has threaten the comforts of their existing lifestyle.

While it’s never fun to see your portfolio take a hit, losses are a normal part of investing. We should spend more time planning for volatility and potential losses than trying to predict the downturn. All this have been explicitly explained in my materials.

Part of that planning includes running a safety-net analysis. This allows you to understand how long you can withstand a downturn. Here are 3 steps to consider.

Step 1: Make a list of all income you expect to earn outside of your portfolio. Total all nonportfolio income you expect to receive over the next decade–such as pension payments etc

Step 2: Estimate a yield on your portfolio. You can get a little creative here, but it’s important to remain conservative.

Step 3: Add up the income and compare to your expenses. Total your expected portfolio income with your outside income, and subtract that amount from your projected expenses in year one.

Happy Training
Ambrose Omordion

The number one key feature of a Strategist is planning because many mistakes are avoided with such a powerful decision. *So why don't you just plan the rest of 2018 investment year by investing in my

-INVEST 2018 TRADERS & INVESTORS FINANCIAL SUCCESS
-2018 Chart Summit. call 08028164085,08032055467 Now!!!

Well you may decide not to take action because of the current state of the market which is still understandable. However, doing the same thing and expecting a different result is insanity. So, change your approach Now by calling 08028164085,08032055467 or send an email to ambroseconsultants@yahoo.com

https://investdataltd..com.ng/2018/05/how-to-be-safe-in-downturn-market.html

Watch the TVC Breakfast 3rd May 2018 | 17 Nigerian States Insolvent with Guest speaker Ambrose Omordion CEO Investdata Ltd



https://www.youtube.com/watch?v=bKiA0BFQ8h4

Corporate Actions As At May 4, 2018

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

May & Baker Cost Containment Efforts Drive Q1 Net Profit By 488%


May & Baker, one of Nigeria’s oldest pharmaceutical and healthcare products manufacturer, on Friday presented its unaudited financials for the first quarter ended March 31, 2018, bearing testimony to the improvement management as profit soared by 488.03%, despite a 0.57% limp in sales revenue.
The result from the drop in finance costs, besides manifesting the success of management’s cost-cutting efforts, inspired hope of bigger returns on investment if the tempo is sustained till month end.

Specifically, revenue from sales crawled by N13.604m from N2.305bn in the corresponding period of 2017 to N2.375bn, driven once again by the pharmaceuticals segment, which contributed N2.163bn or 91.05% of total revenue; up from N1.854bn or 78.52% of prior Q1. Beverage followed with N18.748m, up from N15.342m; while the foods segment slipped from N491.932m, to N193.745m.
By geography, sales revenue from the company’s eastern Nigerian market remained the biggest contributor at N879.483m, even as it dropped to N999.796m; Lagos accounted for N770.054m, up from N754.335m; ahead of N413.51m from western Nigeria, from N362.103m; while N312.713m came from the north, as against N245.922m in 2017Q1.

This is coming amidst the reported sale of the Mimee Instant Noodles brand by the management of May & Baker to competitor- De-United Foods Industries Limited (DUFIL), owners of Indomie Noodles at the cost of N775m. DUFIL also bought two production lines of Dangote Flour Mills’ noodles and pasta business last November for N3.75bn.

Cost of sales dropped slightly to N1.628bn, from N1.678bn; leaving gross profit of N747.368m, compared to N683.731m reported in the previous Q1. While the pharmaceutical segment contributed N783.231m to gross profit, up from N613.404m in 2017Q1; the beverage segment posted a N1.307m loss, down from N2.206m in 2017; which was minute when compared to the N34.556m loss from the food business from a profit of N72.533m.

Other operating income rose to N3.58m from N1.179m, representing miscellaneous income earned on insurance claims received from HUGG Robinson and BCM Insurance Broker, besides being part of income from sale of waste box, waste sugar cartons, flour bags, waste sacks, pallets, woods, bottles, etc. Distribution, sales and marketing expenses fell to N292.612m from N308.457m; while administrative expenses fell from N143.636m in 2017 to N136.94m. Operating profit therefore climbed to N321.396m, up from N232.817m, representing an N88.579m or 38.04% growth.

Investment income for the period dropped slightly to N6.591m, up from N7.601m, comprising the N6.384m rental income earned on some part of the floor space of the company’s Ikeja factory leased to some other companies, up from N4.844m; while interest income on fixed deposits with various commercial banks in the country of N207,000, as against the N2.757m in the preceding first quarter. Finance costs reduced by N85.692m or 41.82% from N204.916m from N119.224m, with interest on bank overdrafts and loans falling to N104.288m from N121.665m; while interest on related party loans declined from N83.251m to N14.936m.

Profit before tax for the period stood at N208.762m from just N35.502m, while tax expenses jumped five-fold from N11.361m to N66.804m, resulting in net profit of N141.958m, as against the N24.141m in the 2017Q1. The net profit translated to Earnings Per Share of 14.49 kobo, as against the previous 2.46 kobo; just net profit margin for the period improved to 5.97%, compared to 1.02%.

It is also expected that the investment by May & Baker in vaccine production facilities would in the coming years contribute significantly to the top and bottom-lines in addition to servicing the huge West African market for the good of investors and traders.

https://investdata.com.ng/2018/05/may-baker-cost-containment-efforts-drive-q1-net-profit-488/#more

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/#more

CBN Injects $349.34m Into Agric, Aviation, Other Sectors


The Central Bank of Nigeria (CBN), injected the total of $349.34m into the Retail Secondary Market Intervention Sales (SMIS) segment of the Forex market in its last intervention for the week.
A statement by the CBN on Friday, May 4, 2018, noted that the interventions were meant to meet obligations in the agricultural, airlines, petroleum products and raw materials and machinery sectors.

The Acting Director, Corporate Communications Department, CBN, Isaac Okorafor, who confirmed the releases, reiterated that the bank remains committed to continue intervening in the foreign exchange market to guarantee liquidity, while boosting the nation’s production sector.
According to Okorafor, the continued interventions by the CBN in the forex market in addition to the recent currency swap with the People’s Bank of China (PBoC) would ease pressure on the country’s reserves.

He expressed confidence that the 16bn Renminbi (RMB), about $2.5bn deal would ensure adequate local currency liquidity to Nigerian and Chinese industrialists and other businesses, stressing that the deal would protect Nigerian business men and women from the harsh effects of third currency fluctuations.
Speaking further, he explained that the CBN, in injecting funds into the market, was playing its role of safeguarding the international value of the Nigerian legal tender- the Naira through exchange rate stability. He said the CBN was also committed to diversifying the nation’s economy from oil.

The CBN in its last SMIS injected the sum of $339.89, while also intervening in the inter-bank Foreign Exchange Market to the tune of $210m, comprising $100m for the wholesale segment and $55m for both the Small and Medium Enterprises (SMEs) and invisibles segment on Wednesday, May 2, 2018.

https://investdata.com.ng/2018/05/cbn-injects-349-34m-agric-aviation-sectors/#more

Sustained Volatility, Low Volume, Profit Taking, As Investors Rebalance Their Portfolios


The three-day back-to-back trading sessions of gains were halted on Thursday amidst sustained volatility, low transaction volume and profit taking, just as mixed sentiments triggered the bear retreat, as value investors continue to position for the short and long-term on the strength of company fundamentals.

According to investdata daily sentiment report, buying pressure declined from midweek position of 62% to 45% which is still okay since it has not gone below the 30% mark considered low, because we actually saw the return of selling pressure in the first half of April when bearish sentiment was high.
The percentage of companies on the Nigerian Stock Exchange (NSE) that beat market and analysts’ estimates in the 2017 full year and 2018Q1 are more, compared to previous quarters and full-year earnings seasons.

For example, the rate at which the NSE Banking Index beat expectation in the 2017 full-year results was high, but the 2018Q1 is low, because only few particularly: Zenith Bank and Stanbic IBTC posted strong numbers, while others came in mainly flat. We also saw the same trend in the consumer goods sector which posted strong full-year numbers that beat estimates, while in Q1 some companies like Nestle, Unilever, Guinness, and National Salt beat rates came high. The industrial sector full year and Q1 beat expectations, especially Dangote Cement, Cement Company of Northern Nigeria (CCNN), and Chemical & Allied Products (CAP Plc). In the Oil/Gas sector, majority of numbers were strong in the full year 2017 and Q1, as most of them beat market and investors expectation for the periods, particularly Eterna, Seplat Petroleum Development Company, 11 Plc (formerly Mobil Oil), MRS and Oando, which returned to profit. The insurance sector in the last two seasons have improved on timely reporting of their numbers, just as their full-year and Q1 2018 earnings performance was mixed. The numbers were high at Q1, especially from Continental Reinsurance, Law Union, Custodian and Aiico.

The good thing from the recent earnings reporting seasons are that companies on the NSE are better and stronger as revealed by these numbers, a situation expected to drive future price appreciation, especially at a time most of the stocks are variously undervalued. The potential of these equities to create wealth for discerning investors in the 2019 reporting season is high for those that will follow Investdata to guide them in this period and beyond.

Meanwhile, the market technicals for Thursday were weak and mixed as volume traded was low amidst increasing selling pressure and flat market breadth. The sell-off position was 55%, while buying volume was 45% on a volume index of 0.78 of the day’s total transaction. The bull transition was short-lived as profit booking in high cap stocks reflected in the day’s money flow index as it was weakened further at 48.33 points. Compared to previous day’s 52.91 points, this is an indication that funds are still leaving the market.

Index and Market Cap
Benchmark Index for the session dropped by 198.21 basis points to close at 41,107.81bps after opening at 41306.02bps, representing a 0.48% decline on a low volume that was higher than the previous day’s. Similarly, market capitalisation was down by N71.8bn to close at N14.89tr from an opening value of N14.96tr, also representing 0.48% drop in investors position.

The downturn was driven by profit taking in stocks like: Dangote Cement and NB, the NSE’s biggest companies by market capitalization; International Brewery, which slipped into loss at Q1, despite a significant rise in turnover for the period (READ); Dangote Sugar, Dangote Flour, Eterna and Oando. These impacted negatively on the NSE’s Year-to-Date returns, cutting it to 7.49%; while market capitalisation gains for the period fell to N1.28tr, representing 9.41% above the year’s opening value.

Bearish Sector Performance
Performance across the sectors was bearish except for the NSE Banking and insurance that were higher as a result of price appreciation in Guaranty Trust Bank, UBN, ETI and Continental Reinsurance. Other sectors were down in the same direction with the general market.
Market breadth was flat as advancers were equal to decliners in the ratio of 25:25 to halt the three-day bull run.
Market activities were mixed as volume rose by 15.98% to 320.4m shares from previous day 276.17m units while value was down by 30.91% to N4.76bn from the previous day’s N6.89bn.

Transaction volume was boosted by financial services and IT stocks like UBA, Access Bank, Etranzaact, Zenith Bank and FBNH which witnessed increased trading to top the activity chart.
The best performing stocks for the day were Unity Bank and CCNN that topped the advancers’ table with gain of 9.52% and 7.58% respectively to close at N1.15 and N22.00 each. This was due to market sentiment and positive reaction to dividend and stronger Q1 numbers.
On the flip side, International Brewery and Dangote Sugar were the worst performing, after losing 8.3% and 5% respectively to close at N47.50 and N19.00 purely on disappointing Q1 numbers.

Market Outlook
Being the last trading day of the week, we expect volatility and profit taking to continue even as investors react to earnings reports and reshuffle their portfolios amidst interpretation of emerging earnings reports ahead of Q1 GDP and April inflation figure. 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/sustained-volatility-low-volume-profit-taking-investors-rebalance-portfolios/

Magunda To Replace Ndegwa As Guinness Nigeria CEO


Alcoholic beverages making giant- Guinness Nigeria Plc, on Wednesday announced the exit of its chief executive, Peter Ndegwa, who is being replaced by Baker Magunda.
In a statement to the Nigerian Stock Exchange (NSE), the company said Ndegwa, who has been at Guinness Nigeria for nearly three years, overseeing its recent transformation, including the successful Rights Issue and implementation of the productivity programme, is moving on to a new role within the global Diageo group, the parent company, to a new role.
The statement by Rotimi Odusola, Legal Director/Company Secretary, said the company’s recent Q3 financial performance has shown the improvement that these projects are delivering.

With nearly 20 years in the consumer goods and alcoholic beverage industry spanning Uganda, Kenya, Ethiopia and the Sudan, Magunda is currently Managing Director of Meta Abo Brewery, Ethiopia, also owned by Diageo.
Under Baker’s watch, the statement said Meta Abo has seen the launch of the Guinness brand in the country and a strong innovation pipeline of brands brought to market.

Commenting on the change, Guinness Nigeria’s chairman, Babatunde Abayomi Savage expressed the board’s appreciation to Ndegwa for his transformational work as MD, leading the business “through challenging times and taken us forward. It is great to see him moving on within Diageo. I would also like to use this opportunity to welcome Baker to the role. I look forward to working with him.”
Also commenting, Ndegwa said: “We have been on a significant journey in Nigeria over the past few years and I am proud of the work that has been done and where the company has got to. The business has more to do certainly and I know the team under Baker’s excellent leadership will do well. I look forward to my new challenge and will follow the progress of Guinness Nigeria with interest.”

Speaking on his forthcoming new role, Magunda noted: “I am delighted to be joining Guinness Nigeria at this time. The team has worked hard to deliver change and progress in a complicated economic environment. I look forward to continuing Peter and the team’s work when I formally join. There is a lot to go after and as Nigeria’s only total beverage alcohol player, there is a great opportunity.”
The statement did not say when the appointment takes effect, but added that a “formal appointment will be announced to the Nigerian Stock Exchange when Mr. Magunda is officially appointed to the board of Guinness Nigeria.”

https://investdata.com.ng/2018/05/magunda-replace-ndegwa-guinness-nigeria-ceo/

CCNN Reports 110.92% Net Profit Growth At Q1


Cement Company of Northern Nigeria (CCNN), on Wednesday presented its first quarter unaudited financials indicating that turnover rose by 23.97%, significantly outpaced by the 110.92% jump in net profit for the period.
Turnover for CCNN which manufactures and distributes the Sokoto Cement brand for the period rose from N4.351bn in 2017Q1 to N5.394bn; while cost of sales was constrained at 15.1% to N3.13bn, from N2.72bn.

Other income jumped to N116.85m, which was 833.19% higher than the N12.52m, boosted by the N95.437m interest income, as against the previous N10.96m; just as sundry income yielded N13.118m, up from N656,800.

Selling and distribution expenses dropped slightly to N245.87m from N260.25m, the bulk of which was the distribution costs which fell from N204.828m to N183.72m; followed by the N54.868m spent on salaries, wages and benefits, compared to N50.082m in the prior first quarter.
Administrative expenses dropped to N597.65m from N565.41m; just as finance costs dropped to N31.9m from N41m, comprising interest n borrowings, which declined from N32.513m in 2017Q1 to N17.393m; just as bank charges climbed to N14.506m from N9.457. This resulted in profit before tax of N1.504bn, up by 119.66% from N684.98m in the corresponding Q1 of 2016.

Profit after tax stood at N1.083bn; up from N513.74m, translating to Earnings Per Share of 86 kobo, up from 41 kobo in the prior Q1.

https://investdata.com.ng/2018/05/ccnn-reports-110-92-net-profit-growth-q1/

Transcorp Committed To Transforming Nigeria’s Power Sector- Elumelu


Tony Elumelu, chairman of the Transnational Corporation of Nigeria Plc (Transcorp) says the group is committed, more than ever before, to transforming the country’s power sector.
Addressing shareholders at the company’s annual general meeting in Lagos on Monday, April 30, 2018, Elumelu said the board and management of Transcorp is working towards continually touching lives and improving the wellbeing of Nigerians.

In line with this resolve, he said, Transcorp will sustain development of its oil and gas assets, while optimizing the huge gas deposit in OPL 281, by constructing a 40 km gas pipeline for dedicated gas supply to Transcorp’s plant at Ughelli, Delta State.
This, he noted, is part of the energy value-chain optimization strategy of Transcorp, which was directed at creating the leading infrastructure player in Nigeria, playing the dominant role in bridging Nigeria’s infrastructure and power deficits.

In summary, according to Elumelu, the corporate ambition of Transcorp “is nothing less than the transformation of Nigeria’s power sector, which in turn is the critical enabler of Nigeria’s broader economic transformation.”
Meanwhile, shareholders commended the board and management of Transcorp for the impressive contribution to transforming the nation’s power sector, through its subsidiary, Transcorp Power.

Acknowledging the company’s efforts and contribution to the nation’s power sector development, the shareholders applauded the generation plant capacity from 160 megawatts, when it was acquired in 2013, to 701MW by November 2017. This surpassed the demand performance target of 670MW by August 2018, set by the Bureau for Public Enterprises in 2013.

The group’s President/CEO, Adim Jibunoh, while thanking the shareholders for their continued support, noted that beyond the company’s power sector strategy, Transcorp is aggressively pursuing the conclusion of its $100m upgrade of the Transcorp Hilton Abuja hotel, with a target of July 2018 for completion, while plans have been concluded for the development of Transcorp Hilton hotels in Lagos and Port Harcourt.

Photo Caption: Chairman of Transcorp, Tony Elumelu (2nd right); President/CEO, Adim Jibunoh (3rd right); Company Secretary, Mrs Helen Iwuchukwu (1st right); Directors – Dr Stanley Lawson and Emmanuel Nnorom, at the company’s 12th AGM in Lagos on Monday, April 30, 2018.

https://investdata.com.ng/2018/05/transcorp-committed-transforming-nigerias-power-sector-elumelu/

Election Concerns Hinder NSE Indicators In April, As Investors Hope For Quick 2018 Budget Passage


Trading for the month of April, the first in second quarter of 2018 ended on Monday, with the composite All-Share index continuing its third consecutive month of decline after recording 17.9% return on investment in January, the highest in 15 years which demystified the market’s January effect.
The January rise followed high investor expectations of positive 2017 full year earnings season, boosted by the optimism that greeted Nigeria’s exit from a painful recession and the improving macro-economic indicators in the domestic and global economy. These were supported by rising commodity prices, improving nation reserves, relative stable exchange rate sustained by the Central Bank of Nigeria (CBN) interventions and a declining inflation rate.

In our opinion, the three months of decline recorded by the NSE between February and April is beyond profit taking, given that the strong market fundamentals and upbeat economic data failed to support a much-expected healthy stock price recovery. This therefore gives credence to the fact that investors are concerned about the political risk associated with the coming 2019 general elections, which is linked to the decision by investors and traders (mostly foreign) to stay on the fence. The decision has resulted also in the oscillating mood and sideways trending of the market in search of direction. The weak response to earnings surprises as at released dates, is evident of low liquidity in the market, especially that at April-end, Nigeria’s 2018 budget is still facing so much uncertainty, leaving the economy to run entirely on monetary stimulus.

Meanwhile, in the 20 trading sessions of April, the composite NSE index oscillated to close lower after recording 11 trading days of down market and nine sessions for up market for the period. The composite index NSEASI for the month of April shed 235.95 points to close at 41,268.56 from an opening figure of 41,504.51, representing 0.57% decline over the period.

The buying volume of total transactions for the month was 75%, while selling position was 25% to continue the previous months down market as volume index for the period was 1.17. Market capitalisation for the month lost N4.2bn to close marginally lower at N14.9tr, from an opening value of N14.99tr, representing 0.02% depreciation in value, with the market having a mixed sentiment in expectations of Q1 scorecards that eventually beat investors and analyst’s estimates. The month’s traded volume was down by 12.71% at 8.24bn shares from 9.44bn in the previous month.

The NSE All-Share index’s year-to-date returns position stood at 7.91%, just as market capitalisation adjusted up to N1.34bn, representing 9.84% gain YTD from the opening value.
Market breadth for April was negative as decliners outpaced advancers in the ratio of 57:31 to continue the bear transition, despite the fact that over 68% of quoted companies with December year-end released their first quarter earnings reports to the market. The earnings reports were nonetheless mixed, but mostly surpassed market expectations especially the banking and oil sectors, which helped the industries, including the financial service providers and others to emerge on the best performing stocks chart for April.

The sectoral performance chart below shows that Oil/Gas sector propelled the market the most in the period under review, gaining 4.92%, compared to the loss by the benchmark NSE All Share Index. It was followed by the NSE Consumers Goods, which rose by 2.74% to reflect improvement in the manufacturing sector and purchasing power of Nigerians; ahead of followed by the NSE Pension index, which moved 1.20% up.
This was attributed to higher dividend payment by the blue-chip companies- mostly banking, consumer and industrial stocks, amidst their low Price-To-Earnings attraction in the sector. Other indexes that closed green during the month were: NSE 30 Index and NSE Premium. On the flip side, the NSE Industrial goods led by 5.21%; followed by NSE Insurance, 3.57%; and NSE Banking 0.16%.



The month’s best performer was Oando, which is finding its true market value following the recently lifted technical suspension, its improved 2017 full-year and first quarter 2018 earnings reports, despite the non-declaration of dividend in the full year. Oando closed the month better by a significant 52.75% of its opening price; followed by Learn Africa, which chalked 39.18%; while Ecobank Transnational Incorporated grabbed 22.94%; and AIICO Insurance, 16.13%.
High and medium cap stocks dominated the top gainers for the month included: Nestle, 15.87%; Seplat, 15.02%; and Prestige Assurance, 13.33%; among others.


The top losers were led by Mutual Benefit Assurance, which lost 29.41%, linked to market forces and the new price policy, UACN Property shed 21.90%; Japual Oil declined by 18.64%; Unity Bank 18.03%; and Dangote Flour, 16.61% on the back of weak payout in 2017 full-year and flat first quarter numbers.



Where To Invest And Expectations For May, June
The global economy and market remain strong as the World Bank recently upgraded the world economic growth outlook despite mounting concern by the investing public about political risks and fear of a trade war which can easily destroy investments due to dwindling confidence.
Back home, the seeming economic recovery will continue in the new month as we expect more encouraging economic data and the eventual passage of the much awaited 2018 budget into law, after which investors expect implementation to complement the CBN’s effort at boosting productivity that will create employment and sustain recovery. Reasons for this are not far-fetched, given the relative peace and security that have since returned to the nation’s troubled Niger Delta region, resulting in oil production stability, all of which would impact the nation’s revenue positively in the coming months.

In May, we expect the release of April consumer price index (CPI) by the National Bureau of Statistics (NBS), with inflation dropping further; just as the CBN’s Purchasing Managers Index (PMI) improved slightly in April to 56.9%, indicating an expansion in the manufacturing sector for the 13th consecutive month, even while that of NOIPoll and the FBNQuest saw a marked fall from 59.4 to 51.0 in April (the first time both reports would reveal a divergence. The nation’s GDP is also expected this month and would confirm the true state of the economy.
As the Q1 earnings reporting season officially comes to close just as the month of April, company fundamentals have come out relatively stronger, leading to more positive numbers to kick start the 2018 financial year, while providing a guide for investors to know where to seek returns depending on their investment horizon, especially as the 2019 elections draws nearer with the Independent National Electoral Commission (INEC) scheduling political parties primaries for between August and October.

Traders and investors who understand the importance of combining fundaments and technical analysis in making investment decisions in the stock market should take this opportunity to position in some sectors for medium and short-term gains, especially the banking, Industrial, agribusiness and consumer goods after a carefully study of recent numbers made available to the market.

What to expect in May and June
• Release of few quarterly and full year earnings. Earnings from blue-chip companies may strengthen market fundamentals, if positive.
• Continuation of oscillating trend of equity prices as a result of repositioning of portfolio along the line of positive numbers and profit
taking. Also due to fear of the coming elections, the second half of this year will be dominated by weaker sentiment.
• Market outlook for May is always dicey, in line with popular saying that traders always “sell in May and come back in October,” which
necessarily depresses the market in May. In the Nigerian market, however, this theory has been defiled four time over the past six years
when the market was up, contrary to the expected down market for the period. But with the better Q1 numbers than expected; the 2018
budget that would likely be approved by the National Assembly this month; the CBN’s readiness to sustain its intervention in the FX
market; and with the nation’s external reserve still robust, there is a likelihood of improvement in liquidity; and business activity ahead of
second half of the year.
• The sustained low valuation in the market may trigger high demand for stocks as electioneering campaign activities kick-off very soon.
However, there is need to invest wisely, using bids, offers and volume when taking decisions as a trader.
• Managing risk and protecting capital at this point is very important, so you will be able to determine when to buy or sell, by watching the
stocks and the market, using technical analysis. Look for investdata daily sentiment timing report
• Let numbers released by the companies guide your decision and time to stay in that position.
• Full-year earnings reports of March year-end companies will start hitting the market this month until June.

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

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

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
https://investdata.com.ng/2018/05/election-concerns-hinder-nse-indicators-april-investors-hope-2018-budget-passage/

Nigeria’s Fidelity Bank Plans Bond Issuance To Boost Lending


Helped by the favourable domestic bond market conditions and sliding inflation that may encourage an eventual cut in Monetary Policy Rate by the Central Bank of Nigeria (CBN), Fidelity Bank is considering issuing domestic bond to raise funds to boost lending.
The recourse to the domestic bond market is coming at a time Nigeria’s Federal Government is shifting towards borrowing overseas to cut yields at home, according to Reuters.

Reuters quoted Fidelity Bank’s Chief Operations and Information Officer, Gbolahan Joshua, as saying the mid-tier lender could look to the local funding market this year after it raised a $400m Eurobond in October to refinance existing debt and boost lending.
Joshua said the bank would target the consumer goods sector, manufacturing and retailers, aiming to boost total loans this year by between 7.5 and 10%, up from 7% growth last year.

He said the bank increased provisions against indebted telecoms firm 9mobile, placing it on a watchlist, after raising provisioning on its N17.3bn loan to the company to 50%.
In October it said it had taken only a 5% impairment charge against 9mobile.
Formerly Etisalat Nigeria, 9mobile obtained a $1.2bn syndicated loan from Fidelity and 12 other local banks in 2013 but failed to make repayments last year. It is now up for sale.

Joshua said Fidelity expected 9mobile’s sale to new investors to be concluded by the second half of the year, by which time the exact loss on the loan would be known.
“By H1 2018, the 9mobile sale may have been completed and there would be clarity for all lenders. We’ve made 50 percent (provision) on the exposure to 9mobile, we don’t expect that by the time the sale would be concluded we would see another classification,” he told an analysts’ call.

Joshua said that if the bank took a 100 percent provision on loans to 9mobile it would amount to less than 40 percent of its 2017 annual profits and it would be able to generate sufficient earnings to continue its business.
Fidelity Bank reported an 84% jump in pretax profit for 2017 to N20.3bn, driven by higher interest rates on loans, and it paid out 17 percent of its income as dividend.

Joshua said the mid-tier lender decided to maintain a conservative payout ratio after the regulator introduced a stricter accounting standard which affects capital ratios.
Fidelity ended 2017 with a capital ratio of 16%, Joshua said, noting that the bank aimed to compete with local rivals that have international subsidiaries and require higher capital ratios. But he added that Fidelity had no plans to expand outside Nigeria.

https://investdata.com.ng/2018/05/nigerias-fidelity-bank-plans-bond-issuance-boost-lending/

Forte Oil To Sell Power, Upstream Arms, Exit Ghana Over Loss, Debts

Femi Otedola’s Forte Oil says it plans to sell its upstream services and power businesses in Nigeria and divest from Ghana to focus on its core fuel distribution operation at home.
The unit in Ghana has declared losses over the last three years and has uncollectible trade debts due to tough economic conditions and a currency devaluation in the cocoa-rich country.
Forte Oil said proceeds from the divestment would be used to expand its downstream fuel distribution business and to invest in storage infrastructure.

It said interest costs attributable to the businesses for sale stood at N2.2bn as of December and now plans to seek shareholder approval for the sale on May 23 and appoint advisers, it said in a notice to investors.
The move comes as a surprise about-turn for a company whose Chief Executive Akin Akinfemiwa told investors in Lagos in August that he wanted to aggressively pursue mergers and acquisition opportunities along the energy value chain and acquire marginal oilfields to boost its upstream business, according to Reuters.

The company had also been in talks with a major refinery to form a strategic partnership for local refining of petroleum products.
It did not give a reason for the change in direction but said the downstream sector in Nigeria had gone through changes in recent years and was expected to evolve further.
It added that the industry has operated under a tightly regulated fixed margin but could be deregulated especially given its impact on the Nigerian currency and import bill.

The government increased petrol prices by 67 percent to N145 in 2016 to cut subsidies paid for fuel imports after a plunge in oil prices hit state revenues, caused dollar shortages and halted infrastructure projects with firms laying off tens of thousands of workers.
Its 57% owned power unit, Amperion Power Distribution Company, has a lot of receivables due from the state-backed offtaker and its upstream unit has contributed less than 7% to group earnings over the past three years.

“The changing landscape also suggests backward integration would be essential to remain competitive within the sector, particularly in the face of impending deregulation,” it said in the notice.
Forte’s pretax profit nearly doubled in 2017 to 10.63 billion naira, though sales fell by 15% to N129.4bn, the company said in March.

https://investdata.com.ng/2018/05/forte-oil-sell-power-upstream-arms-exit-ghana-loss-debts/

Seplat Petroleum Reports Three-Digit Q1 Growth, Nets N6.287bn Profit


Shareholders of Seplat Petroleum Development Company Plc can begin to hope for a superlative financial year, post-December 31, 2018 year-end, given the three-digit growth in revenue and profit at the end of the first quarter-ended March 31, 2018. The company reported Q1 profit from the previous N5.855bn loss, resulting to Earnings Per Share of N10.68, up from the previous N10.39 Loss Per Share.

Seplat reported total revenue of N55.236bn, up by 281.62% from N14.474bn, a breakdown of which showed that crude oil sales contributed a total N43.138bn, compared to the N9.214bn earned in the prior Q1; while gas sales fetched N12.098bn, up from N7.668bn. The company named the major off-taker for crude oil as Mercuria, while that for gas is the Nigerian Gas Marketing Company.

Cost of sales climbed to N26.833bn, representing a 211.14% rise over the N8.624bn reported in the corresponding period of 2017, comprising the handling fees of N4.567bn, up from just N168m; royalties, N9.758bn, as against N1.513bn; while depletion, depreciation and amortization cost N9.704bn, almost three-fold that of N3.474bn. Niger Delta Development Commission levy paid by Seplat Petroleum for the period rose to N519m, compared to N350m in the 2017Q1; just as rig related expenses dropped significantly to N8m, from N306m; just as operations and maintenance expenses was flat at N2.277bn, from N2.158bn; following which gross profit climbed to N28.403bn from N5.85bn.
Other income stood at N2.628bn, being what the management of Seplat Petroleum termed “c,” defined as revenue related “to shortfalls of the crude oil sold during the period below the participant’s ownership share of production.

“The amount is initially measured at the market price of oil at the date of lifting, consistent with the measurement of the sale and purchase. Subsequently, they are measured at the current market value,” with the change arising included as other income.
General and administrative expenses dropped 17.14% to N4.25bn from N5.129bn, the bulk of which was the employee benefits of N2.355bn, up from N1.787bn; followed by the N1.088bn in professional and consulting fees, up from N1.361bn. Gains on foreign exchange rose marginally to N572m from N529m. Fair value movements in contingent consideration rose to N1.73bn from N1.662bn.

Operating profit stood at N25.623bn, an improvement of 6,319.17% over the N412m recorded in the prior Q1. Finance income rose 582.81% from N63m to N437m, being interest income from bank deposits; while net finance costs climbed 53.57% from N5.257bn to N8.073bn, the lion’s share of which was the interest on bank loans of N7.35bn, compared to N5.25bn.

Profit before tax of Seplat Petroleum therefore stood at N17.987bn, up by 420.91% from the prior year’s N5.605bn loss; just as tax expenses soared by an equally significant 4,580% from N250m in 2017Q1 to N11.7bn.
This left the profit after tax of Seplat Petroleum at N6.287bn, 207.38% better than the N5.855bn reported in the preceding Q1.

https://investdata.com.ng/2018/05/seplat-petroleum-reports-three-digit-q1-growth-nets-profit/#more