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NASI Sheds 0.77% as MPC Holds Rates

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private-equity
  • 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.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Insurance

Heirs Insurance Group Unveils Revolutionary Website for Seamless Insurance Experience

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Heirs Life Assurance- Investors King

Heirs Insurance Group has launched a website designed to revolutionize the insurance experience for its customers.

With a focus on simplicity, accessibility, and personalized service, the new website aims to streamline the process of obtaining insurance coverage and empower customers to make informed decisions about their insurance needs.

The website boasts a range of innovative features that make navigating insurance options easier than ever before.

From simple and intuitive navigation menus to personalized insurance recommendations, the website is designed to guide customers through every step of the insurance process quickly and efficiently.

According to Ifesinachi Okpagu, the Chief Marketing Officer of Heirs Insurance Group, the new website embodies the company’s commitment to delivering exceptional customer service.

“Today’s customers want simplicity, and this new website delivers on that request,” Okpagu said. “We are empowering customers to take control of their lives, their businesses, assets, and their most cherished people.”

One of the key features of the website is its personalized insurance experience, which takes customers through a short journey to help them identify the best insurance plan for their needs.

Whether customers are looking for coverage for their home, car, business, or loved ones, the website provides tailored recommendations to ensure they find the right insurance solution quickly and easily.

With its user-friendly interface and innovative features, the new website from Heirs Insurance Group sets a new standard for the insurance industry, making it easier than ever for customers to protect what matters most to them.

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Banking Sector

Safaricom, Access Holdings Forge Partnership to Revolutionize Remittance Corridor in Africa

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Access bank

Safaricom, the leading telecommunications company in Kenya, has entered into a strategic partnership with Access Holdings, spearheaded by Aigboje Aig-Imoukhuede.

The collaboration aims to revolutionize the remittance corridor between East and West Africa, marking a significant step towards enhancing financial inclusion and empowering millions of individuals across the continent.

The partnership comes on the heels of Access Holdings’ recent acquisition of the National Bank of Kenya Limited, signaling the company’s ambitious expansion into the East African market.

Leveraging Safaricom’s extensive network and expertise in mobile money through M-Pesa, which currently dominates the mobile money market in Kenya, the alliance seeks to create seamless and efficient channels for remittance transactions.

Aigboje Aig-Imoukhuede, the driving force behind Access Holdings, expressed enthusiasm about the collaboration, highlighting its potential to transcend traditional boundaries and foster greater economic connectivity between East and West Africa.

He highlighted the fusion of collective expertise and resources between the two entities, underlining their shared commitment to driving financial inclusion and empowerment across the continent.

The partnership holds promise for addressing the challenges faced by millions of Africans in accessing affordable and reliable remittance services.

By connecting more than 60 million customers and 5 million businesses across eight countries, the collaboration aims to facilitate over $1 billion in daily transaction value, significantly boosting the flow of remittances within and outside Africa.

With the first phase of the collaboration focusing on key markets such as Nigeria, Kenya, Ghana, and Tanzania, stakeholders anticipate a transformative impact on the remittance landscape, paving the way for greater intracontinental trade and economic integration in line with the objectives of initiatives like the African Continental Free Trade Area (AfCFTA).

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Banking Sector

EFCC Urged to Repatriate Recoveries to NDIC for Depositors’ Relief

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The Nigeria Deposit Insurance Corporation (NDIC) has made a fervent plea to the Economic and Financial Crimes Commission (EFCC) to expedite the repatriation of recovered funds to its coffers to facilitate the timely reimbursement of depositors affected by bank failures.

During a recent meeting between the Managing Director of NDIC, Bello Hassan, and the Executive Chairman of the EFCC, Ola Olukoyede, at the NDIC headquarters in Abuja, Hassan stressed the importance of enhanced collaboration between the two agencies in recovering depositors’ funds lost due to bank failures.

Hassan emphasized that the return of recoveries made by the EFCC on behalf of the NDIC would significantly contribute to the prompt reimbursement of affected depositors.

He commended the EFCC for its unwavering efforts in combating corruption and financial crimes, highlighting its crucial role as a key member of the Taskforce on Implementation of the Failed Banks Act chaired by the NDIC.

The NDIC boss also highlighted the existing partnership between the two organizations, which led to the establishment of the NDIC Help Desk at the EFCC in 2022.

He disclosed that several high-profile cases referred to the EFCC were currently under investigation.

In response, Olukoyede reiterated the EFCC’s commitment to collaborating closely with the NDIC to combat financial crimes and safeguard the integrity of the Nigerian banking sector.

He pledged to intensify efforts to repatriate recovered funds promptly, acknowledging the interconnectedness between criminal activities and bank failures.

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