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Research

Nigeria Strategy Report – H1 2019 Excerpts (Part 3)

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 Global Economy and Markets   In this morning’s cut-out of our core strategy document – The Nigeria Strategy Report, we review developments pertaining to the direction of FPI flows across emerging and frontier markets. In addition to delineating the drivers of portfolio flows over 2018, this section presents our outlook on drivers of FPI flows for 2019.   In our H2 2018 NSR, we noted that the confluence of sturdy DM growth picture and currencies, interest rate normalization in US, and ripple effect of escalating trade wars between US and China should temper the scale of portfolio flows into EMs,…

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Nigeria Strategy Report – H1 2019 Excerpts (Part 2)

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Global Economy and Markets We continue with the serialization of our core strategy document – The Nigeria Strategy Report. We review developments in MEA (Middle-East and Africa) climes over 2018. The section also provides insights on what we believe will be major drivers of both growth and overall investor sentiment over 2019.   In our H2 18 strategy outlook, we charted our prospect of stronger economic growth in the SSA bloc on the back of improved agricultural output and industrial activities from smaller regions even as growth in heavy weights, Nigeria and South Africa pick up, while our prognosis for…

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Nigeria Strategy Report – H1 2019 Excerpts (Part 1)

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Global Economy and Markets   Over the next few days, we will feature excerpts from our core strategy document – The Nigeria Strategy Report. The report communicates our understanding on key happenings in global and domestic financial markets over 2018 and provides our insight on what we believe will be the major themes underpinning investor sentiment over 2019. We begin the series with a look at the major themes that dominated the global economic and financial landscape in 2018 as well as our outlook for 2019.   Although the global macroeconomic clime has been hitting patches of turbulence over the…

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Access Bank Plc and Diamond Bank Plc Merger: A Lofty Deal or Damp Squib?

By | Access Bank, CBN, Diamond Bank, Merger, Research | No Comments

Nigerian Banks A Lofty Deal or a Damp Squib? • A switch to National Banking License… In our recently published equity commentary on Diamond Bank (See report: Overblown fright or Justified concerns), we had stated three options the bank’s management will adopt to keep the bank operational and meet its obligation to lenders. While we had considered the possible acquisition by a bigger bank, the management of both banks in separate press releases refuted the claim. Consequently, as with one of our options, Diamond Bank got approval from the CBN to operate as a national bank following the sale of…

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ARM Research – Stock Recommendation for the Week , December 17

By | Nigerian Stock Exchange, Research | No Comments

Activities in the Nigeria equities market was bearish in the past week, with the NSE ASI declining by 0.60% WoW to 30,681.50 points and market capitalization shedding about N61.8 billion over the week. The loss was driven by declines in bellwether stocks in the banking (FBNH: -1.97%, STANBIC: -2.34% and ZENITH: -2.34%), Breweries (NB: -0.63%) and Food (NESTLE: -6.39%) sectors. Top decliners during the week were MOBIL (-10.41%), CONOIL (-10.00%) and CUTIZ (-9.64%).  Fidelity Bank Plc – BUY (FVE: N2.92). We are more optimistic on our earnings expectation over 2018 largely on the back of lower loan-loss provisioning. We…

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Fixed Income Report: Is STAB the new normal?

By | Fixed Income, Research, STAB, Stabilization securities | No Comments

CBN moves the needle. Last week Thursday, for the first time this year, CBN conducted a special OMO auction where it sold Stabilization securities (STAB) worth N287.7 billion. This came after subscription levels (N403 billion) at Thursday’s auction were 42% and 41% shy of planned offer (N700 billion) and OMO maturity on the same day (N684 billion) respectively. In addition to OMO issuances earlier in the week, CBN net issued N248.7 billion in the first week of December alone. The Elephant in the room. It all started in November, where CBN grappled with pent up liquidity in the system following…

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ARM Research| Nigeria equity market booked another week of loss

By | Fidelity Bank Plc, Guinness Nigeria Plc, Nigerian Breweries Plc, Okomu Oil Palm Plc, Research, Seplat Petroleum Development Company Plc | No Comments

The Nigeria equity market booked another week of loss, with the NSE ASI declining by 2.54% WoW to 30,874.17 pts and the market capitalization shedding N293.7 billion over the week. The loss was driven by declines in bellwether stocks in the banking (FBNH: -6.58%, GUARANTY: -5.63%, STANBIC: -2.04%, UBA: -3.85% and ZENITH: -3.33%), cement (DANGCEM: -4.15%, LAFARGE: -7.14%) and Oil & gas (SEPLAT: -9.68%) sectors. Top decliners during the week were DIAMONDBNK (-31.58%), PRESTIGE (-30.38%) and UNITYBNK (-18.82%). Fidelity Bank Plc – BUY (FVE: N92). We are now more optimistic on our earnings expectation over 2018 largely on the back…

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FG’s Debt Stock: Domestic debt takes a breather

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FG’s debt stock rose 5.03% QoQ to N18 trillion over Q1 2018 with domestic debt accounting for 70% of total debt. The increase in debt stock over Q1 was largely on the back of a $2.5 billion Eurobond issued in February, which resulted in a 19% QoQ expansion in external debt to $5.4 billion. Elsewhere, domestic debt stayed flat (-0.1% QoQ) at N12.6 trillion on the back of lower Treasury bill stock (-7.5% QoQ to N3.3 trillion) which neutered the moderate increase in bonds (+2.9% QoQ to N8.9 trillion). Specifically, the FG has net repaid a total of N49.7 billion…

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In the news: CBN pumps $304.4m into FX market

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This Day BDC Operators Hail Moves to Return Nigeria to JP Morgan Index The Association of Bureaux De Change Operators of Nigeria (ABCON) has said the federal government’s plan to open talks with JPMorgan Chase & Co. for their reinstatement in the local-currency emerging-market bond index will bring great benefits to the economy. Kaduna Refinery Shut over Lack of Crude The Kaduna Refining and Petrochemical Company (KRPC) shut down operations on January 15 due to the non-availability of crude oil. CBN Pumps Fresh $304.4m into Forex Market The Central Bank of Nigeria (CBN) at the weekend intervened in the Retail…

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In the news: Stock Market hits nine-year high

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Punch Fuel queues return to Lagos, Ogun …NNPC blames hitch on vessels berthing Long queues of desperate motorists and other users of Premium Motor Spirit returned to many filling stations in Lagos and Ogun states on Saturday and Sunday after a brief relief from the severe scarcity of the product that rocked the country from December to early this month. PIGB’ll reduce N200bn oil revenue losses – NEITI The Nigeria Extractive Industries Transparency Initiative on Sunday welcomed the decision by both chambers of the National Assembly to pass the Petroleum Industry Governance Bill and stated that it would help reduce…

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