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Cordros Capital Allays Fear of Capital Market Bubble

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Cordros Money Market Fund
  • Cordros Capital Allays Fear of Capital Market Bubble

Cordros Capital says the current rally in the country’s stock market does not, in any way, suggest a bubble scenario.

The company, in its 2018 outlook for the country, said the market was largely driven by fundamentals.

Presenting the outlook to newsmen in Lagos, the firm’s Head, Research and Strategy, Mr. Christian Orajekwe, said the equities gain of 2017 was the market’s first in three years of cumulative 40 per cent loss, adding that in dollar terms, the return was around 25 per cent.

Orajekwe said, “Back-to-back gain of more than 80 per cent total is not a new phenomenon. Bull markets do not die of old age.

“Compared to the last two years, Nigeria’s macro outlook is more favourable to equities”

He said the equities market recorded a strong January start this year like the case of 2007, 2010, and 2013, driven by a moderate improvement in the macro environment, stable to modest corporate earnings growth, modest improvement in portfolio inflows over 2017, marginal moderation of fixed income and treasury yields, and modest election concerns.”

To this end, the Head, Investment Banking, Cordros Capital, Mr. Femi Ademola, urged investors to cherry-pick stocks, and hold 2017 position and watch out for Q4 2017 and Q1 2018 earnings.

He said, “Small cap companies are to benefit from stronger recovery of economic activities, election-related spending, passage of the minimum wage bill into law, and improvement in public sector revenue while raw materials intensive companies are to benefit from the stability of the naira.

“Highly geared companies are to benefit from the expected moderation of interest rates while cement companies are to benefit from the expected improvement in public sector construction activities as well as research/development and capital expenditure-oriented companies.

For consumers goods, the 2018 catalysts, according to Orajekwe, are: improvement in consumer spending (better macro, reduced inflationary pressure, election spending, passage of minimum wage); low interest rate and deleveraged balance sheet; foreign exchange stability; and impressive 2017 performance rubbing off on consumer goods stocks in 2018.”

However, the 2018 risks for consumer goods stocks, he added, included: external pressure (continued modest or lower growth, forex and inflation risks, and constrained government spending); competition (the attractive profits of 2017 and improved access to the United States dollar will encourage mass return of the smaller players and ignite market share war); policy issues (fuel and power tariff hikes); and valuation issues (weak upside, following 2017 bull run).

-Commenting on the 2018 budget, he said early presentation was good albeit the likelihood of an early passage and signing of the budget.

“Oil revenue assumptions are realistic. Non-oil revenue estimates, particularly taxation and Internally-Generated Revenue are very ambitious. Other revenues are also ambitious, although they have strongly supported gross revenue in past years,” he said.

“A 50:50 split between domestic and external borrowing was observed. The risk of deficit exceeding budget is low to moderate. Except on extreme difficult revenue condition, priority will be given to capital expenditure,” Orajekwe added.

Major catalysts for agriculture companies in 2018, he explained, include: supportive macroeconomic environment, energy diversification and expansion drive while the major risks include: policy reversal, unfavourable weather condition and security threat.

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 long experience in the global financial market.

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Access Bank in Talks to Acquire Cavmont Bank

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Access Bank to Acquire Cavmont Bank in Zambia

Access Bank Plc on Wednesday announced that its wholly-owned subsidiary in Zambia, Access Bank Zambia Limited (Access Bank Zambia) is in talks to acquire Cavmont Bank Limited, a subsidiary of Cavmont Capital.

According to the statement signed by Mr. Sunday Ekwochi, Company Secretary, Access Bank and released on the Nigerian Stock Exchange website on Wednesday, the ongoing discussions is to acquire 100 percent of Cavmont Capital’s interest in Cavmont Bank.

However, the lender said “there can be no certainty that a transaction will be agreed, nor as to the terms of any such agreement.

“The completion of a transaction would be subject to formal regulatory approvals. Access Bank will be updating the market as appropriate and in accordance with its disclosure obligations.”

The lender, therefore, advised shareholders to exercise caution when dealing in Access Bank’s securities.

Investors King Ltd note: This announcement further threw more lights on the recent purchases of Access Bank’s shares by Herbert Wigwe, the Chief Executive Officer and Managing Director, Access Bank.

The CEO/MD purchased 7.532 million of Access Bank‘s shares in the last one month.

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Mohammed Umar is the New Acting Chairman of EFCC

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Buhari Appoints Mohammed Umar as EFCC Acting Chairman

President Muhammadu Buhari has appointed, Mohammed Umar, the director of operations at the Economic and Financial Crimes Commission (EFCC), as the new Acting Chairman of the agency, according to the NAN.

A top official of the commission confirmed to NAN that Umar has taken charge of the agency following the suspension of Ibrahim Magu, the former acting Chairman.

Ibrahim Magu was suspended by the President on Tuesday following series of allegations bordering on frauds, financial misappropriations and abuse of power.

 

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CBN Spends $11.5bn in Q1 2020 to Support the Economy and Dwindling Naira

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CBN

CBN Injects $11.5bn Into the Economy in the First Quarter

The Central Bank of Nigeria (CBN) injected a combined $11.5 billion into the nation’s foreign exchange market to stabilise the economy and support the Naira value in the first quarter of the year.

According to the latest report from the apex bank, the central bank injected $2.96 billion into the nation’s forex market in the month of January. Another $3.39 billion was used to support the economy in February while $4.7 billion was supplied in the month of March, the very month the economy was locked and all operations grounded to curb the spread of COVID-19.

A further breakdown of the report revealed that the Investors and Exporters’ foreign exchange window, Small and Medium enterprises and Invisible segments received a total of $7.23 billion of the $11.5 billion, the Bureau De Change segment received $3.6 billion while the Interbank and WDAS/RDAS got the rest in the first quarter.

The report noted that the apex bank injected a total sum of $14.72 billion and $28.55 billion into the economy in 2018 and 2019, respectively.

Meanwhile, the central bank is yet to commence the sales of forex to the bureau de change following the March suspension.

But has commenced partial sales to all commercial banks for onward sales to parents and small businesses across the country.

Mr Isaac Okorafor, the Director, Corporate Communications, CBN, had said, “The CBN has also made complete arrangements to resume foreign exchange sales to the BDC segment of the market for business travels, personal travels and other designated retail uses, as soon as international flights resume.”

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