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NASI Sheds 0.77% as MPC Holds Rates

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  • NASI Sheds 0.77% as MPC Holds Rates

The Nigerian Equities market closed under water Week-on-Week, declining by 0.77% to bring the Year-to-Date return to -5.28%. However, the volume of transactions and market turnover in the week advanced by 7.86% and 27.28% respectively. The market breadth closed at 0.53x reflecting eighteen (18) gainers and thirty-four (34) decliners in the week.

WAPCO emerged as the top outperformer this week, advancing by 13.92% to close at NGN41.01. FIDSON (+13.48%), LIVESTOCK (+10.94%) MOBIL (+6.16%), and CCNN (+4.44%) also featured on the list of outperformers. On the flip side, GUINNESS (-9.77%)pared the most in the week, with SEPLAT (-9.73%), DIAMONDBNK (-8.51%), UAC-PROP(-8.42%) and AFRIPRUD (-8.40%) trailing behind.

At the second Monetary Policy Committee (MPC) meeting for the year, the Committee voted to retain the Monetary Policy Rate (MPR) at 14%; CRR at 22.5%; maintain the asymmetric corridor at +200bps & -500bps; and also maintain the liquidity ratio at 30%.

Also, during the week, there were earnings releases by Stanbic IBTC Bank PLC (STANBIC), Unilever Nigeria Plc (UNILEVER), Lafarge Africa Plc (WAPCO) and Cadbury Nigeria PLC (CADBURY). The companies, save for CADBURY, proposed respective dividends of NGN0.05, NGN0.10 and NGN1.05 per share.

We attribute the weak market mood in the week to sell pressures on certain counters including large-cap stocks like GUINNESS and SEPLAT which recorded gains in the prior week. Based on the topsy-turvy trend of the market in recent weeks, we expect to see some bullish activity in the coming week.

This report reviews events in the current week, with emphasis on different segments of the financial market, while presenting our expectations for the coming week.

Fixed Income: Naira Appreciates to close at a 7 Month High of NGN390/USD

The aggressive intervention by the CBN impacted the Naira positively, as the currency appreciated by 25% from the rate of NGN520/USD in the last one month. Also, the Naira closed at NGN390/USD at the end of trading activities this week, appreciating by 13.33% WoW.

Financial system liquidity declined during the week, on the back of OMO sales worth NGN66.01bn. Although the average money market rate advanced to 100.04% the day after the OMO sales, the rate settled at 7.50% at the close of the week, indicating a decline of 7.17% WoW.

The Central Bank of Nigeria (CBN) held a Treasury Bills Primary Auction on Wednesday, 22nd March, 2017. T-bills worth NGN134.97bn matured and an equivalent sum was re-issued. However, the 91-day instrument was undersubscribed, with a bid-to-cover ratio of 0.61x. Meanwhile, the 182-day and 364-day instruments recorded bid-to-cover ratios of 1.20x and 1.09x respectively. The discount rates at the auction on the 91-day, 182-day and 364-day instruments were 13.55%, 17.2% and 18.69% respectively. In the secondary market, sell sentiments characterized the treasury bills space as the average yield advanced by 1.18% WoW.

Activities in the treasury bonds space were characterized by bullish sentiments as yields trended downwards across various instruments during the week. This was further augmented by the week on week decline of 0.12% in the average bond yield, to settle at 16.33%.

Agricultural Sector: MERI-AGRI Advances Marginally

The Agricultural sector, as measured by the MERI-AGRI index, advanced marginally to overturn the prior week’s performance. It advanced by 0.008% WoW, to push the YtD return to 18.26%. The sector recorded one gainer, and no loser at the close of trading this week.

LIVESTOCK featured on the gainers’ chart, after declining for four consecutive weeks. The ticker advanced by 10.94%, to close at NGN0.71.

This week recorded no share price movements on the sector’s heavyweights. Therefore, the bargain hunting activities on the low-priced LIVESTOCK resulted in the sector’s positive, albeit marginal, performance.

Banking Sector: GUARANTY Closes at NGN26.50

The banking sector, as measured by the MERI-BNK index, closed negative this week at -1.65% from a previous week’s gain of 2.82%, to settle the YtD return at +2.13%. One (1) stock recorded share price appreciation, while nine (9) stocks declined in the week and six (6) counters traded flat, to bring the sector breadth to 0.11x.

GUARANTY emerged as the lone gainer for the week, advancing by 0.76% to close at NGN26.50. On the other hand, DIAMONDBNK (-8.51%)recorded a significant decline this week, putting it at the top of the losers’ list. Other top losers for the week were FIDELITYBK (-5.81%), ETI (-5.36%), ACCESS (-5.13%)and ZENITHBANK (-4.53%).

Stanbic IBTC Holdings PLC (STANBIC) released its FY2016 result during the week, which showed Year-on-Year (YoY) growths in revenue, Profit-Before-Tax and Profit-After-Tax of 11.71%, 57.33% and 50.97% respectively. The company proposed a final dividend of 5 kobo/share, representing a dividend yield of 0.28%, based on the closing price of NGN17.71 on the 24th of March, 2017.

We attribute the loss in the week to investors’ skepticism on the subsequentearnings releases, as well as profit taking activities on counters that have hitherto enjoyed positive sentiments. In the coming week, we expect the current trend to reverse.

Consumer Goods:Sector Returns -0.31% WoW

The consumer goods sector closed on a negative note, after losing on three (3) out of five (5) trading days of the week. Consequently, sector index as measured by the NSEFBT10 indexdeclined by0.31% WoW to settle the YtD return at -12.10%. Sector breadth closed at 0.38x, reflecting three (3) outperformers against eight (8) underperformers, while other counters traded flat.

NESTLE (+2.60%)led the gainers’ chart for the week, closing at NGN749.00. Other counters that featured on the chart were VITAFOAM (+2.56%) and NASCON(+1.47%). Conversely, GUINNESS (-9.77%)was the worst performer in the week.The ticker was trailed by CADBURY (-6.49%), UNILEVER (-5.00%), INTBREW (-4.46%), HONYFLOUR (-2.86%), 7UP (-2.19%), FLOURMILL (-1.96%) and DANGSUGAR (-0.48%).

In the week, Unilever Nigeria PLC (UNILEVER) and Cadbury Nigeria Plc (CADBURY) released their FY2016 results. Both companies recorded Year-on-Year (YoY) growths of 17.82% and 8.74% respectively in revenue.UNILEVER also recorded 131.86% and 157.63% growth in Profit-Before-Tax and Profit-After-Tax respectively, and proposed a dividend of NGN0.10/share, representing a dividend yield of 0.31% based on today’s closing price of NGN32.30. However, CADBURY slid into a Loss-After-Tax position of -NGN0.30bn, implying a YoY decline of 125.70%.

We attribute the sector’s performance to sell pressures on some counters that had recorded price appreciation in previous weeks. We expect the current mood to reverse, as the sector oscillates between gains and losses weekly.

Healthcare Sector:FIDSON Gains 13.48% WoW

The MERI-HLTH returned 0.03% WoW, moderating the YtD loss to -7.65%. Sector breadth settled at equilibrium (1.00x), indicating one (1) gainer and loser apiece.

FIDSON emerged as the lone gainer in the sector, advancing significantly by 13.48% WoW to close at NGN1.01. NEIMETH, on the other hand, shed 6.56% WoW to settle at NGN0.57 after reaching its year-low at NGN0.56.

We attribute the positive sentiments witnessed in the sector this week to bargain hunting on FIDSON after weeks of consecutive declines. We, however, expect some sell pressures in the coming week in anticipation of weak FY2016 earnings releases from sector companies.

Industrial Goods Sector:WAPCO Records the Highest Gain

The Industrial Goods Sector, as measured by the NSEIND index, advanced by 5.14% WoW, to bring the Year-to-Date return to -2.05%. There were three (3) gainers and losers apiece, settling the sector breadth at an equilibrium.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Banking Sector

FirstBank Holds Non-Oil Export Webinar Series, Creates Awareness of The Bank’s Export Solutions

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First Bank of Nigeria Limited, Nigeria’s premier and leading financial inclusion services provider, has announced the convening of its non-oil export webinar series. The Event is centered on deliberating opportunities that will enhance the country’s expansion of its drive towards diversifying the national economy, thereby reducing the reliance of oil as a mainstay of the country’s revenue.  

The first series of the virtual event is scheduled for 10am on Tuesday, 30th November 2021 via Zoom meeting. To register and be part of this transformational knowledge session, click on this link-https://www.firstbanknigeria.com/business/non-oil-export/ . Registration is Free!! 

The event is themed “Building Sustainable Non-Oil Export in Nigeria; Harnessing Opportunities within the AfCFTA Treaty & Agro Commodities” and will have the attendance of Mr. Segun Awolowo MD/CEO, Nigerian Export Promotion Council (NEPC); Dr Biodun Adedipe, Founder and Chief Consultant of B. Adedipe Associates Limited (BAA Consult)  amongst others, as guest speakers.  

The webinar series aims to facilitate sustainable exports as well as guide participants on ways of navigating the hurdles and challenges of exports in Nigeria. The webinar will explore market and economic trends, unique export opportunities and potentials within the non-oil export industry across the geopolitical zones in the country.  

The importance of exports in Nigeria remains a front burner conversation by individuals and organisations as it provides a means of increasing the markets for producers, and an opportunity to attract the much needed foreign exchange earnings to boost the national economy, which is critical to expanding its Gross Domestic Products. 

Speaking on the event, the Group Head, Marketing & Corporate Communications, Folake Ani-Mumuney said: “in recent years, the country has witnessed increased activities by the government towards diversifying the economy, thereby boosting the export potentials of the country – beyond the contribution of crude oil – which has been the mainstay of the national economy for many decades.  

Our forthcoming Non-oil Webinar series will expand discussions that are crucial to the growth of Nigeria’s export potentials as we unlock numerous opportunities that will promote the economic diversification drive of the government which is essential to the continued growth of the national economy, especially with the current business challenges posed by the pandemic.”

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Currency in Circulation Now N2.97 Trillion in October – CBN

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Currency in circulation hit N2.97 trillion in the month of October, according to the latest report from the Central Bank of Nigeria (CBN).

The currency in circulation rose by N129 billion from N2.84 trillion recorded in the month of September to N2.97 trillion in October. This was after the currency in circulation declined from N2.8 trillion in July to N2.78 trillion in August.

Currency in circulation stood at N2.74 trillion in June, N2.79 trillion in May, N2.79 trillion in April, N2.8 trillion in March, N2.78 trillion in February and N2.83 trillion in January.

The CBN said, “The currency in circulation increased by N465.47bn or 19.06 per cent to N2.91tn in 2020, compared with N2.44tn in 2019.

“In 2020, there were higher withdrawals by DMBs than deposits, due to the panic need to hold cash to deal with the emergencies and reduced banking hours due to restrictions to curb spread of the pandemic.”

The bank said to maintain public confidence and ensure integrity of circulated notes in the economy, it developed and unveiled a clean note policy and banknote fitness guidelines in 2018.

The guidelines outlined details of quarterly and yearly activities towards the achievement of this objective.

The CBN said it employed the “accounting/statistical/withdrawals and deposits approach” to compute the currency in circulation in the country.

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Banking Sector

2021 NCOY: FirstBank Partners Junior Achievement Nigeria, Reiterates Commitment to Innovation and Education

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For 11 years, Nigeria’s premier and leading financial inclusion services provider, First Bank of Nigeria Limited has partnered with Junior Achievement Nigeria (JAN) to host its annual flagship event; the National Company of the Year competition (NCOY), which convenes winners of the JA Company Regional Competitions across Nigeria to compete for the National Company of the Year Award.

This year, the event will bring together outstanding ‘student business teams’ across Nigeria to compete for prizes and an opportunity to represent the country at the national competition – JA African Company of the Year Competition (ACOY). The 2021 edition of the NCOY competition will be held virtually via Zoom meetings at 10am on Saturday, 27th November 2021.  Interested participants are to register via the link https://us06web.zoom.us/meeting/register/tZEtd-qvqz4pE90NXOHcy-tve6aEXpY_yYAE

The competition themed ‘Innovation with Grit’ will have 12 teams from 12 schools pitch their innovations to a team of 5 guests judges. The represented schools at the competition include: The Seer company from Alvana High School; Sonic Informatics company from Heritage Global Academy; Nexus Queens company from Queens School; JA Stars from Theological College of Northern Nigeria (TCNN); Amazing Amazon Students from Government Girls’ Secondary School, Abaji; KereTerra Company from Secondary School Etoi, Uyo and The Exploit thinkers from Taidob College.

Other teams competing include: Mystic Global Company from Rosa Mystica High School, Agulu;  PetraMech Tech from Petra Schools; The Amazing Inventors from Government Secondary School Tudun Wada; Blue crystal company from Methodist Girls school and the Artisans from Igbobi College.

Judges at the event include: Oludolapo Adigun, Group Head, Retail Banking Lagos & West First Bank of Nigeria Limited; Chidimma Juliana Okparah, Project Management Consultant (PMIEF); Sheila Ojei, Head of Communications Jobberman;  Gbenga Sesan, Executive Director of Paradigm Initiative and Simbo Olatoregun, Policy Programs Manager for Facebook in Africa. In attendance also is the Honourable Commissioner for Education Lagos State, Mrs. Folashade Adefisayo as a Special Guest.

The 2021 National Company of the Year Program will also feature SPARK Competition. SPARK as an initiative of First Bank of Nigeria Limited, is an acronym for Start Performing Acts of Random Kindness. SPARK reiterates the Bank’s commitment to institutionalise kindness in Nigeria by encouraging and amplifying a culture of kindness.

The SPARK competition will feature 15 finalist schools across Nigeria, whose CSR projects align with the Bank’s Corporate Responsibility and Sustainability pillars of Education, Welfare and Health, Financial inclusion and Responsible Lending and Procurement.

Speaking on the event, the Group Head, Marketing & Corporate Communications, Folake Ani-Mumuney said “FirstBank’s partnership under its Future First initiative with JA Nigeria Company programme has positively impacted over 100,000 people in different locations across the country in preparing and teaching them how to generate wealth, effectively manage it and how to apply entrepreneurial thinking to the workplace. Our commitment to fostering entrepreneurial development amongst youths is mainly the driving force behind our support of the National Company of the Year (NCOY) and Africa Company of the Year (ACOY) competitions in past 11 years”.

According to the Executive Director, JAN, ‘’the National Company of the Year Company competition provides our students with a platform to show how innovative they are while displaying their dexterity and grit especially as it relates to creating sustainable business solutions to problems in their immediate community. The students have learned critical skills during the implementation of the Company Programme and we are proud to celebrate them as they compete in the National competition. I would like to specially appreciate FirstBank Nigeria for their continued support and belief in the boundless potential of young Nigerians’’.

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