Professional Documents
Culture Documents
43
Sectoral Analysis 15
Transactions Volume and Value Trend 16
Top Ten Trades in the Month 16
Top Ten Traded Sectors in the Month 16
Top Ten Gainers in the Month 18
Top Ten Year to Date Appreciation 18
Top Ten Decliners in the Month 19
Top Ten Year to Date Depreciation 19
Supplementary Listing in the Month 19
Corporate Declarations in the Month 20
Forecast Results in the Month 25
Dividends Declared 25
Sectoral Analysis 26
Outlook/ Analyst Opinion 33
Time Lines (April Market News/Information) 34
Executive Summary
"Progress is impossible without change and those who cannot change their minds cannot
change anything." - George Bernard
Equity market in the month under review has performed in line with general expectation
of both the investing public and analysts as the fortunes of equities that ended on the
downside in the month of June showcase the reverse in July.
Trends in the month showed that, for the first thirteen trading days into the month
(between 1st and 19th July, 2010), bulls and bears were striving for the control of the
market. It was observed that the bears consequently gained upper hand in the period it
lasted.
The dominance of bears in the period was not unconnected with the spill over effect of
the preceding three months below average performance. Uncertainties surrounding the
successful takeoff of Asset Management Company of Nigeria (AMCON) in the period also
contributed to the volatility and consequently, dominance of bearish trend.
Also, the statement credited to the Central Bank of Nigeria (CBN) that banks in the
country are not yet in safe territory despite their flight to profitability in their respective
first quarter results to March 31st, 2010. This created a run on most of the banking
stocks, most especially the rescued banks, hence the dominance of bears since stocks in
banking sector accounted for more than 50% of the entire market capitalisation.
Towards the latter part of the week, the market outlook improved drastically and the
upbeat has been sustained from Tuesday 20th July, 2010. The positive outlook recorded
was on the back of eventually asset to the Asset Management Company bills by the
President. The impact of the development has been felt most prominently in the banking
stocks and also in all the other sectors on the bourse.
The market pattern in the last three trading days of the month showed evidence of profit
takings by the investors, who has since besieged the market from Wednesday 28th July,
2010 to rake in profit from the previous rally. The sell pressures on the bourse
consequently climaxed in negative outlook at the close of the last trading day of the
month with -0.24% decline.
The trend could be pointing to the fact that, despite the positive development noted
above; investors’ mindsets are still not towards medium to long term basis but still at
the speculative mood. This kind of trend may still persist for sometimes as part of the
stages towards eventual market stability.
Thank you for reading and do take time to share with us your thoughts on the market,
analyst at analyst@proshareng.com. We value your feedback and comments.
The dominant of bears in the period could be attributed to the spill over effect of the
bears run of the preceding month, coupled with the state of uncertainties pervading the
Asset Management Company issues. The indications that AMC might not come on stream
as expected cast doubt on the market, and the immediate reaction was the incidence of
speculative trading.
However, afterwards, with the Asset Management Company signed into law by the
President, market reacted immediately on a positive note with many equities recording
price uptrend of different magnitude. The positive outlook has since remained and this
has pushed the performance in the month to positive territory.
The fact that stocks across all the sectors had shed considerable price weight aided the
positive reactions as discerning investors seemed post optimistic stance and bids for
stocks has since remained strong.
The profit taking activities that resumed on Wednesday 28th July, 2010 was not
unexpected, it should be seen as part of the stages of further recovery to stability. The
sell pressures witnessed at the tail end of the month is not expected to drag into bearish
mode as trend in some sectors such as Food and a beverage is pointing in that direction.
The market this month recorded a total of 7.638bn units valued at N58.784bn
(US$392.679bn) exchanged in 134.213 deals compared with 9.921bn units valued
at N72.384bn (US$483.527mn) exchanged in 4187.748 deals in the previous year’s
comparable period. Comparing, the volume and value traded in the month reveals a -
23% and -18.79% decline below the volume and value recorded in the previous year’s
comparable period respectively.
The sustained political stability in the country which has made the economic and
business environment friendlier.
Planned elections (with a possibility of an early election timeframe) and the expected
beneficial impact on the NCM.
The sustained regulatory co-ordination and commitment to transparent market which
seems to have tamed the incidence of infractions very significantly.
The news by the Central Bank of Nigeria that banks are not yet in a safe territory
created a run on the banking stocks before AMC positive development climaxed to
reality.
The fact that liquidity in the system remains insufficient to support the market
capacity still creates impact. This is due dearth of loan-able funds from the banking
sector.
Corporate declarations announced by some companies – good with relative positives.
The management of the leadership issues at both the Nigerian Stock Exchange on
succession plan.
The second quarter results released so far in the banking sector must have raised the
hope of better returns in the sector, coupled with the fact that many of them might
not have many issues with the non-performing loans saga.
The recent CBN stand in resorting to dialogue in dealing with recapitalisation of the
rescued banks also raised the morale of the investing public in the sector. If the
positive development continues, there may be swelling times ahead.
Guaranteeing the domestic interbank market
The efforts by regulatory bodies, especially the Securities and Exchange Commission
(SEC) to ensure of safety of investments in the market contributed to the market
growth.
Uncertainty in regarding the regarding the ownership of the ailing institutions and
its recapitalization plans.
High political risks and volatility in the country's political institutions.
Reduction in oil prices
Low investor confidence
Increased broker-dealer regulation
Current levels of nonperforming loans (NPLs) across the sector
Poor corporate governance and risk-management deficiencies
Profit taking during the last few days of month as other investors exited their
short-term positions in anticipation of further decline in share prices.
Exchange rate depreciation
Retail market disappeared as a consequence of the illiquid status of investors
Margin loans from banks and brokerage firms is no longer available
Continuous selling pressure overwhelming the demand for stocks
The need to offset the margin loans by major investors in order to avoid been
classified as toxic assets had also increased supply by over the demand for stocks
Exit of foreign investors from the stock market as financial crisis in the Europe, as
well as concerns about the strength of the U.S. economic recovery, has resulted
in foreign investors scaling down their position in the market
As a critical bulk of the Nigerian investor profile reacted to the ensuing financial
crisis in Europe, a run was created on the market in the period under review, as
foreign investors sold massively to make up for their losses.
Global crisis as they were attributed to slow recovery in bank lending and the
perceived delay as regards the fate of the rescued banks
The long awaited Asset Management Company (AMCON) has eventually come on stream
as it was eventually signed into law by the president during the month
(http://www.proshareng.com/news/singleNews.php?id=11434). The market has since
witnessed reactions (though positive) from the investors as it contributed to the upward
Advantages of AMCON
Toxic assets had been written off the books of the banks, so once they are bought
by AMCON, there will be some capital.
More recovery of the bad loans of the banks and pressure on debtors to pay
Recapitalization of banks in which the Central Bank of Nigeria (CBN) was forced
to intervene and help to increase access to restructuring/refinancing opportunities
for borrowers
AMCON buying the toxic assets of the banks and pumping money into the
institutions, their books will improve and attract investors
Disadvantages of AMCON
The long drawn out delay in executing the AMCON does not suggest to some that
the regulators and managers of the economy get it.
It may lead to another asset buddle at the nation’s capital market, owing to huge
interest of foreign investors to invest in the country.
Threat of inflation from the budget deficit and the operations of the proposed
AMCON.
Establishment of “sinking fund” provision is has been proposed to deal with this
issue, but it is not clear whether this sinking fund will be established – and with
what money
The upcoming 2011 election may also create a turbulent atmosphere inimical to
the proper sober functioning of the AMCON
Commencement date chosen for AMCON to begin operation is not yet disclosed.
Negative Net Worth of troubled banks will attract most of the AMCON funds
Market Concerns: There are serious concerns with the regulatory bodies as the recent
extension of the deadline given to Wema Bank Plc and Unity Bank Plc on the last day of
deadline showed that the CBN did not have a clear programme for its reform. SEC on the
extension of the deadline given to the Nigerian Stock Exchange to appoint a new
Director-General. Removal of some of the restrictions by CBN it imposed on the credit
operations of banks by amending relevant portions of the Prudential Guidelines that
became effective May 1, this year. AMC was supposed to ensure the smooth take-off on
July 26, 2010 but still no details have been found.
Trends in the month showed that, for the first thirteen trading days into the month
(between 1st and 19th July, 2010), bulls and bears were striving for the control of the
market.
The Nigerian Stock market has remained positive for continues last 9 trading days of the
month as buying pressure continued to dominate trading activities after a lackluster
performance that trailed the passage of the Asset Management Company of Nigeria
(AMCON) Bill and the positive earnings declared by most of the banks for period ending
Q2, 2010.
The NSE index in July 2010 ended on a positive note drawing from the upbeat recorded
at the end of the last trading days of the month ( barring last trading day) ensuring that
July 2010 ended with a +2.82% appreciation to close at 25,844.18 compared with -7.09%
depreciations recorded in the preceding year comparable period to close at 25,286.61.
The appreciation in the month was far below the +12.97% and +8.43% recorded in the
month of March and January 2010.
At the end of the last trading day of the month, All-Share Index closed above the figure
recorded at the close of 4th January 2010 by 24.02% which was -19.36% away from
January 2nd 2009 to 31st July, 2009. This shows by how much the market has recovered
in the year.
At the close of the last trading day of the month, All-Share Index traded above its 20
days, 50 days and 200 days moving average which closed at 25,123.97, 25,462.09 and
23,928.08 respectively. This trend is technically suggesting a bullish trend.
From the table above, the year to date performance of the year 2009 as at 31st July,
2009 closing at -19.36% indicated a depressing outlook when compared with the positive
In the month under review, NSE-30 and Insurance index emerged the best performing
sector with +3.13% and +1.68% appreciation respectively, followed by Banking index
When compared with June trend of sectoral indexes, the performance in the month of
July was above the preceding month’s trend in all other sectoral indexes with the
exception of Oil & Gas index which underperformed the preceding month very
considerably.
By the committee’s action, the shares of Cadbury Nigeria Plc and Ecobank Nigeria Plc,
were replaced with the shares of Julius Berger Nigeria Plc and Mobil Oil Nigeria Plc.
The trend recorded in the blue chips stocks is reflected in the index movement. There
were interruptions at the many points in the index performance in the month due to the
volatility that pervaded the entire market in the period, mainly in the early part of the
Shares of Tantalizers Plc were admitted while that of Northern Nigeria Flour Mills Plc was
removed to rebalance the sub-sector’s index.
The stocks in the sector still closed on a positive note in the month to record +1.10%
compared with -2.54% recorded in the month of June. This is against appreciations by
+39.09% recorded in the first three months of the year. Trend in the sector towards
the close of the month suggested positive trend in the days ahead as stocks in the sector
have potentials for impressive returns .Performance trail of the sector showed that the
sector recorded +18.43% appreciation in the month of March alone compared with
+13.20% and +3.75% appreciation recorded in January and February respectively.
Under NSE – Banking Index shares of Fidelity Bank Plc and Skye Bank Plc were replaced
tby hat of Union Bank of Nigeria Plc, and Ecobank Nigeria Plc.
NSE-Banking index closed the month of July with +1.48% appreciations compared with -
3.48% depreciations recorded in June. The performance growth was against +10.30%,
+1.76% and +18.34% appreciations recorded in the months of January, February and
March respectively. The trend recorded could be attributed to atmosphere of uncertainty
that pervaded the sector before AMC bills eventually became a reality. Enthusiasm about
the impact of the AMC plan for the banks might have also raised the investor’s
enthusiasm about the stocks in the sector in the latter parts of the month.
We don't see any of the rescued banks delivering good between now and the third
quarter as the results have failed to lift market sentiment and the share capital is still
negative as we do not see growth in lending and increase in deposits but non-performing
loans that were provisioned for earlier by the banks later re-paid to the banks were
written back into the books as profit, interest rates at inter-bank market have dropped,
while yield on bonds where the banks fled to as safe haven is not promising either.
The shares of International Energy Insurance Plc, Mutual Benefits Assurance Plc,
Standard Alliance Insurance Plc, AIICO Insurance Plc, Cornerstone Insurance Plc, Equity
Assurance Plc, and Goldlink Insurance Plc were admitted, while that of Unity Kapital
Assurance Plc, Prestige Assurance Plc, Staco Insurance Plc, African Alliance Insurance
Plc, Investment and Allied Insurance Plc, Oasis Insurance Plc, and Universal Insurance
Plc were removed from the NSE Insurance.
Insurance sector posted +1.68% appreciations in the month of July as against -6.15%
decline recorded in the previous month. This could be attributed to the fact that stocks in
the sector are subject to high rate of volatility as dearth of impressive returns remains
the main discouragement to investors. The pattern may not change in the coming days.
http://www.proshareng.com/investors/theAnalyst.php
SECTOR PREFORMANCE
YTD
Sector
%Change
HOTEL & TOURISM 54.22%
FOOD/BEVERAGES & TOBACCO 40.94%
BREWERIES 35.54%
BUILDING MATERIALS 26.50%
CONSTRUCTION 24.14%
HEALTHCARE 23.04%
MARITIME 22.88%
AIRLINE SERVICES 18.35%
PETROLEUM(MARKETING) 18.21%
CONGLOMERATES 11.95%
ENGINEERING TECHNOLOGY 10.17%
CHEMICAL & PAINTS 9.16%
BANKING 8.69%
PRINTING & PUBLISHING 7.86%
THE FOREIGN LISTINGS 6.67%
COMMERCIAL/SERVICES 4.14%
LEASING 3.02%
REAL ESTATE 2.97%
PACKAGING 0.68%
AVIATION 0.00%
AGRICULTURE -0.89%
INFORMATION & COMMUNICATION
-3.85%
TECHNOLOGY
SECOND-TIER SECURITIES -7.15%
ROAD TRANSPORTATION -8.22%
INSURANCE -9.25%
COMPUTER & OFFICE EQUIPMENT -9.76%
OTHER FINANCIAL INSTITUTIONS -11.72%
MEDIA -13.28%
MORTGAGE COMPANIES -13.74%
FOOTWEAR -14.08%
INDUSTRIAL/DOMESTIC PRODUCTS -18.50%
AUTOMOBILE & TYRE -30.57%
TEXTILES -43.68%
The transaction volume in the month of July when compared with the preceding year
comparable period closed lower by -23.01% to close at 7.63 billion units compared
with 9.92 billion units traded in July 2009. This could be an indication that the
investors’ patronage of the market in the month under review was significantly different.
Also, the transaction value in the month under review closed lower by -18.78% at
N58.78 billion ($389.32 million) compared with N72.38 billion ($452.40 million)
of July 2009.
4,220,352,269.0 55.25%
BANKING 72,858.00 0 32,882,327,122.20
1,004,118,449.0 13.15%
INSURANCE 6,165.00 0 1,050,804,494.65
7.47%
CONGLOMERATES 5,732.00 570,929,355.00 3,787,327,018.91
FOOD/BEVERAGES &
3.51%
TOBACCO 13,859.00 267,717,514.00 6,773,125,613.31
3.17%
HOTEL & TOURISM 346.00 242,390,283.00 1,088,549,363.03
SECOND-TIER
2.78%
SECURITIES 57.00 212,702,951.00 106,660,185.50
INFORMATION &
COMMUNICATION 2.76%
TECHNOLOGY 1,243.00 211,142,141.00 228,103,889.82
1.73%
CONSTRUCTION 1,260.00 132,457,777.00 349,267,317.28
MORTGAGE
1.45%
COMPANIES 797.00 110,821,195.00 61,351,178.83
PETROLEUM(MARKETI 1.01%
NG) 6,400.00 77,026,997.00 4,166,178,266.24
7,637,990,081.0
Grand Total 134,213.00 0 58,784,142,060.02
Dividends Declared
SECTOR ANALYSIS
YTD
Symbol Symbol
30-Jul 4-Jan YTD %
Price Price Change Change
AGRICULTURE
AFPRINT 0.86 AFPRINT 0.86 0 0.0%
ELLAHLAKES 4.26 ELLAHLAKES 4.26 0 0.0%
FTNCOCOA 0.79 FTNCOCOA 0.54 0.25 46.3%
LIVESTOCK 0.6 LIVESTOCK 0.59 0.01 1.7%
OKITIPUPA 6.21 OKITIPUPA 6.53 -0.32 -4.9%
OKOMUOIL 11.2 OKOMUOIL 22.75 -11.55 -50.8%
Presco 5.68 Presco 5.6 0.08 1.4%
Average -0.9%
AIRLINE SERVICES
AIRSERVICE 2.46 AIRSERVICE 2.65 -0.19 -7%
NAHCO 10.33 NAHCO 7.18 3.15 44%
Average 18.4%
AUTOMOBILE & TYRE
DUNLOP 0.5 DUNLOP 0.5 0 0%
INCAR 1.97 INCAR 4.12 -2.15 -52%
RTBRISCOE 3.72 RTBRISCOE 6.15 -2.43 -40%
Average -30.6%
AVIATION
ALBARKAIR 0.58 ALBARKAIR 0.58 0 0%
Average 0.0%
BANKING
ACCESS 9.09 ACCESS 7.55 1.54 20%
AFRIBANK 2.08 AFRIBANK 2.43 -0.35 -14%
DIAMONDBNK 7.51 DIAMONDBNK 7.19 0.32 4%
ECOBANK 4.6 ECOBANK 10.1 -5.5 -54%
FIDELITYBK 2.53 FIDELITYBK 2.52 0.01 0%
FIRSTBANK 13.4 FIRSTBANK 14 -0.6 -4%
FCMB 7.89 FCMB 7.01 0.88 13%
FIRSTINLND 0.58 FIRSTINLND 0.55 0.03 5%
GUARANTY 16.8 GUARANTY 15.78 1.02 6%
INTERCONT 2.25 INTERCONT 1.69 0.56 33%
OCEANIC 1.97 OCEANIC 1.77 0.2 11%
PLATINUM 1.49 PLATINUM 1.38 0.11 8%
SKYEBANK 7.3 SKYEBANK 5.48 1.82 33%
SPRINGBANK 0.66 SPRINGBANK 0.73 -0.07 -10%
IBTC 9.1 IBTC 7.16 1.94 27%
STERLNBANK 2.16 STERLNBANK 1.26 0.9 71%
The Monthly NCM Report for July 2010 www.proshareng.com Page 29
UBA 10.5 UBA 10.81 -0.31 -3%
UBN 5.63 UBN 6.25 -0.62 -10%
UNITYBNK 1.11 UNITYBNK 0.87 0.24 28%
WEMABANK 1.08 WEMABANK 0.97 0.11 11%
ZENITHBANK 14.21 ZENITHBANK 13.5 0.71 5%
Average 8.7%
BREWERIES
CHAMPION 2.58 CHAMPION 3.15 -0.57 -18%
GOLDBREW 0.54 GOLDBREW 0.54 0 0%
GUINNESS 169 GUINNESS 127.5 41.5 33%
INTBREW 6.99 INTBREW 2.27 4.72 208%
JOSBREW 3.36 JOSBREW 3.58 -0.22 -6%
NB 70.24 NB 53 17.24 33%
PREMBREW 0.93 PREMBREW 0.93 0 0%
Average 35.5%
BUILDING MATERIALS
ASHAKACEM 19.1 ASHAKACEM 11.39 7.71 68%
BCC 64.5 BCC 43.01 21.49 50%
CCNN 17.05 CCNN 13 4.05 31%
WAPCO 41 WAPCO 30 11 37%
NIGERCEM 5 NIGERCEM 5 0 0%
NIGROPES 9.14 NIGROPES 9.14 0 0%
NIGWIRE 2.58 NIGWIRE 2.58 0 0%
Average 26.5%
CHEMICAL & PAINTS
AFRPAINTS 3.32 AFRPAINTS 3.49 -0.17 -5%
BERGER 6.52 BERGER 3.2 3.32 104%
CAP 31.92 CAP 28 3.92 14%
DNMEYER 4.74 DNMEYER 5.39 -0.65 -12%
IPWA 0.99 IPWA 1.45 -0.46 -32%
NIG-GERMAN 14.29 NIG-GERMAN 15.04 -0.75 -5%
PREMPAINTS 13.4 PREMPAINTS 13.4 0 0%
PORTPAINT 5.67 PORTPAINT 5.67 0 0%
Average 9.2%
COMMERCIAL/SERVICES
COURTVILLE 0.51 COURTVILLE 0.5 0.01 2%
NSLTECH 2.92 NSLTECH 4.35 -1.43 -33%
REDSTAREX 3.17 REDSTAREX 2.15 1.02 47%
TRANSEXPR 6.45 TRANSEXPR 6.45 0 0%
Average 4.1%
COMPUTER & OFFICE EQUIPMENT
HALLMARK 3.22 HALLMARK 3.22 0 0%
NCR 7.35 NCR 8.51 -1.16 -14%
The rebound which cut across all the sectors in the market was on the back of success
story recorded on the Asset Management Company which was assented to by the
President. Banking sector has been the most beneficial of the positive development as
investors’ enthusiasm seems to have eventually returned to the sector.
The fact that many stocks have shed considerable price weight accounted for the trend
as discerning investors and speculators took advantages of low prices across the market
to take positions for capital appreciations, and possibly holding on to some stocks with
prospects of good returns.
With the ongoing stability in the system- both political and economic, we expect that the
business environment will continue to post more attractive outlook for both local and
foreign investors; and this is expected to rob much more positively on the equity market
in particular and the whole economy in general.
While we hold our view that Asset Management Company is not the total cure for the
market challenges and ailments (http://proshareng.com/blog/?p=383) , we expect that
all things being equal, the expected positive impact on the back of AMC should rob much
more in the market. This is expected to be much more pronounced in the banking sector
which stands as the most beneficiary of the company.
The second quarter results released so far in the banking sector (with others still being
awaited as at the time of filling this report), and with quarterly results in some other
sectors as well, the results in many of these entities seem to be projecting better days
ahead for investors. It may be safe then to conclude that market outlook should be more
robust as against bearish run recorded in the preceding year comparable period.
We are of the view that lending is likely pick up in 2010, as the economy continues to
grow and commercial activity resumes after the slowdown in 2009 but Harmonization of
the fiscal and monetary policies Nigerian economy is a key and important aspect.
Moreover, as the economic recovery continues and scourge of job losses continues to
subside, with improved access to credit since banks should be able to resume lending
properly, improvement in liquidity situations seems inevitable (ceteris paribus.)
We are hopeful that the approaching transition period which tempo is expected to be
more intense as the year closes by will not create any hitch on the market recovery. We
hope the transition through election should be managed with transparency to forestall
any possibility of crisis that may send wrong signals to foreign investors.
In the same vein, leadership issues of the Nigerian Stock Exchange should be managed
properly even as the incumbent’s tenure expires before the year runs out. The smooth
Market direction will be clear when the results of the bids would be released by
September or October (as expected by CBN) clarifying the ownership of the ailing
institutions as banks really had nothing to offer in terms of net worth as the equity is
negative but There are rooms for building and maintaining wealth as against depletion of
fortunes that had been before now.
recorded a premium income of N200.6 billion for the financial year ended December
31, 2009, as against N150.3 billion it posted the same period in 2008, indicating a
33.5 percent growth. The growth, according to analysts, may have been as a result
of market expansion and increased business resulting from the industry’s increased
capacity since after its recapitalisation in 2007.
CBN releases guidelines for granting liquid asset status to state govt.
Bonds- Three months after the Central Bank of Nigeria (CBN) decided to confer
liquid asset status on eligible state government bonds, it has finally issued
guidelines to operationalise the decision. With the guidelines, the Securities and
Exchange Commission (SEC) is expected to monitor the execution of projects
carried out with proceeds from state government bonds. The apex bank decided to
July 2 CBN: AMCON to Clear N1.5tr Bad Loans by Dec•Successful bids on rescued 39 23 The All-Share Index in the week under review inched
banks out Oct •Warns against another asset bubble-The Central Bank of up by +0.28% to close at 25,223.70 as against
depreciation by -2.74% recorded last week to close at
Nigeria (CBN) has said the proposed Asset Management Corporation of Nigeria
25,154.26. The bearish run that featured strongly in
(AMCON) will clear $10 billion (about N1.5trillion) of bad loans from the banking the two trading days of the week accounted for the
system by the end of this year. CBN Governor Sanusi Lamido Sanusi made the marginal gain recorded.
expenditure, while N1.37 trillion was for capital project. The N400 billion the Senate
proposes to cut is, however, a far cry from President Jonathan’s request in which he
had asked for a 40 per cent reduction, which translates to about N1.2 trillion from
the total budget.
Rescued banks: CBN to clear toxic debts by year end – Sanusi- The Governor
of the Central Bank of Nigeria, Mr. Lamido Sanusi, has said that the CBN plans to
clear the toxic debts from the banking system by the end of the year as it tries to
Hope rises for sick banks •Get CBN’s N1.5trn lifeline-Succour may have
finally come the way of weak banks in the country, as the Central Bank of Nigeria
(CBN) plans to clear about N1.5 trillion ($10 billion) of toxic debts from the banking
system by the end of the year. The move by the apex bank, which is aimed at
reviving lending and boosting growth in the banking sector, will indicate a debt
purchase, valued roughly at about N750 billion as commercial banks don’t have
collateral to cover their bad loans.
CBN governor sees no rate rise, warns of bubble-Four international banks to bid for
rescued banks • Bid starts end of July-The Central Bank of Nigeria governor
said on Thursday he saw no reason to raise interest rates, days before a
monetary policy committee meeting, but said he was concerned about the
risk of another asset bubble forming. Governor Lamido Sanusi also said
four international banks were among the likely bidders for Nigerian banks
rescued last year in a $4 billion bailout and that he expected bids to be in
by the end of the month.
Four International Banks to bid for failed banks-The Central Bank Governor,
Sanusi Lamido Sanusi, yesterday in London, said four international banks were
among the likely bidders for banks rescued last year in a $4 billion bailout and that
he expects bids to be in by the end of the month. Sanusi added that the results of
the bids would be released by September or October. However, Sanusi stated that
the CBN would not be raising the nation's interest rates, giving insight into the
possible outcome of the next Monetary Policy Committee Meeting billed for Tuesday
and Wednesday next week.
Inter-bank rates climb on big cash outflow-Inter-bank lending rates rose to two
per cent on average last week from 1.1 per cent the previous week after
large chunks of cash flowed out to treasury bills and foreign exchange
purchases drained liquidity from the system. The secured Open Buy Back
climbed to 1.50 per cent, from 1.05 per cent, 50 basis points above the
CBN to maintain interest rates at 6%-The Central Bank of Nigeria will keep its
benchmark interest rate unchanged at 6 percent on today, as the need to
stimulate growth seems to outweigh inflation risks in the nation’s
economy. The CBN had earlier said it would review whether to start
tightening its monetary policy at its meeting in July because of increased
inflationary risks from government spending and the soaking up of bad
CBN moves to free more credit for economic growth-Following the financial
crisis that hit the banking sector in 2009, most banks that had huge
amounts provided for in their financials as a result of non-performing loans
given out to the capital market and the oil and gas sector must have learnt
a bitter lesson they would not want to repeat itself.
July 8 Jonathan: D-8 Nations’ Summit’ll Boost Economic Relations-As the Summit 12 49 At the close of trading session, the All-Share Index
of Eight Developing Nations (D-8) opens today in Abuja, President Goodluck declined by -1.18% to close at 24,776.04 compared
with the depreciation by -0.40% recorded at the close
Jonathan has assured that the summit would help in strengthening economic
of trading yesterday to close at 25,070.85. Market
relations among member nations. capitalisation also declined by N72.660 billion
(US$485.370 million) to close at N6.033 trillion
CBN unveils new guidelines risk management-After identifying factors that led (US$40.302 billion) as against depreciation by
to the creation of extremely fragile financial system that was tipped into N23.246 billion (US$155.282 million) recorded
crisis by the global financial meltdown, the Central Bank of Nigeria (CBN) yesterday to close at N6.105 trillion (US$40.787
billion). the market report for the day was titled:
has unveiled revised prudential guidelines for Deposit Money Banks Market remains in bear’s territory as banking &
(DMBs) to reduce potential risks in the future. beverages stocks dip
massively(http://www.proshareng.com/news/s
July 9 CBN Extends Implementation of Prudential Guidelines-The Central Bank of 15 46 The All-Share Index in the week under review dipped
Nigeria (CBN) has extended by two months the implantation date for the new by -2.44% to close at 24,609.30 as against
appreciation by 0.28% recorded last week to close at
Prudential Guidelines for Banks.The guidelines which were first issued in May, this
25,223.70. The continued bearish hold on the market
year was re-issued yesterday and the effective date for implementation moved in the week accounted for the negative outlook
from May 1 to July 1, 2010. A circular signed by CBN’s Director of Banking recorded.
July 15 NNPC Not Bankrupt, Says FG-The Federal Government yesterday faulted the 28 29 At the close of trading session, the All-Share Index
claim that the Nigeria National Petroleum Corporation (NNPC) was insolvent. dipped marginally by -0.07% to close at 24,744.95
compared with depreciation by -0.32% recorded at the
Minister of State for Finance, Mr. Remi Babalola had said NNPC owed debts the
close of trading on yesterday to close at 24,761.79.
federation account N450 billion. Babalola, referring to a letter from NNPC group Market capitalisation also dipped by N3.124 billion
managing director, Mr. Austin Oniwon, said: “NNPC is insolvent as current liabilities (US$20.865 million) to close at N6.052 trillion
(US$40.428 billion) compared with decline by N19.617
exceed current assets… NNPC is incapable of repaying the N450 billion owed to the
billion (US$131.041 million) recorded yesterday to
Federation Account unless it is reimbursed the N1.156 trillion (in subsidies) it has close at N6.055 trillion (US$40.448 billion). The
requested from the Federal Ministry of Finance.” market report for the day was titled: Nigerian
Breweries declares 5.8% PAT decline in Q2 as
NSE Presidency: Court Summons Dangote, Onyiuke, Igbinosun over
market dips by
Contempt Charges-For his continuing claim to the Nigeria Stock Exchange (NSE) 0.07%(http://www.proshareng.com/news/113
presidency contrary to a court order nullifying his election, a Federal High Court in 97)
Lagos yesterday ordered business mogul and Chairman Dangote Group, Alhaji Aliko
Dangote, to appear before it to answer contempt charges preferred against him
by some aggrieved shareholders of African Petroleum.
CBN makes U-turn on new guidelines-The Central Bank of Nigeria, CBN, has
backpedalled on its directive that banks should disclose executive
compensation and bonuses in their annual accounts. The apex bank, last
week, issued a new prudential guidelines which replaced the one issued in
May which mandated banks to disclose in their annual accounts monies
paid to executives and staff as compensation, profit sharing and bonuses.
Also deleted from the new prudential guidelines is the limit on credit to
directors and significant shareholders and the general provisioning of one
per cent for all loans.
July 16 Nigeria denies state oil firm NNPC bankrupt-The Nigerian government has 31 27 The All-Share Index in the week under review
strongly denied claims that the state oil company is bankrupt, shortly after a junior appreciated by +0.96% to close at 24,846.64 as
against decline by -2.44% recorded last week to close
minister said it was insolvent.On Tuesday, Junior Finance Minister Remi Babalola
at 24,609.30. The positive trends recorded in the three
said the Nigerian National Petroleum Corporation was unable to pay debts of $5bn of the five trading days of the week accounted for the
(£3.3bn).However, two senior cabinet ministers flatly contradicted him.Nigeria is a positive outlook.
major producer and exporter of crude oil but depends almost entirely on imported
fuel.Finance Minister Segun Aganga told journalists the NNPC was a going concern The market capitalisation in the week recorded a boost
by N58.048 billion (US$387.765 million) to close at
Bank lending to real estate drops 60% as credit squeeze lingers-The real
estate sector of the economy has seen a substantial drop in bank lending that
hovers between 60 and 70 percent following the credit squeeze in the banking
sector. Due more to the on-going banking reform than the global economic
recession, the Nigerian banking sector is having serious liquidity challenges. The
situation is such that most of the banks appear to have outlawed lending. The few
that lend are very selective, lending only to individuals and institutions that they
like most, especially those that pose minimal risk.
Asset management company takes off July 26- Barring any unforeseen
circumstance, the Asset Management Company (AMC), an establishment that will
soak up bad debts in the banking sector, is set to take off in the next two weeks.
This follows the receipt of the harmonised Asset Management Company (AMCON)
bill by President Goodluck Jonathan last weekend. AMCON, when signed into law,
July 19 Reserves Rise over Reduced Funding for Forex-Nigeria’s external reserves 25 35 At the close of trading session, the All-Share Index
rose to $38.53 billion last weekend, from about $37 billion at the end of June, dipped by -0.32% to close at 24,766.14 as against
appreciation by +0.41% recorded on Friday to close at
2010, which represented about 3 per cent rise within just a fortnight.
24,846.64. Market capitalisation also dipped by
Analysts attributed the rise to the shortfall in demand for foreign exchange, which N19.688 billion (US$131.518 million) to close at
they said lowered the utilisation of reserves for market intervention by the Central N6.057 trillion (US$40.463 billion) compared with
appreciation by N24.872 billion (US$166.144 million)
Bank of Nigeria (CBN).
recorded on Friday to close at N6.077 trillion
Banks Rule Out New Exposure to Aviation Sector-Many of the country’s banks (US$40.594 billion).
have ruled out any new exposure to the aviation sector, especially the airlines, The market report for the day was titled:
Intercontinental, Platinum lead losers on 0.32%
except in the future when the economic environment improves.The banks,
slide; AMCON law signed by President.(
according to THISDAY investigations, have merely deployed resources to participate http://www.proshareng.com/news/11433)
in the aviation Fund, planned by the Central Bank of Nigeria (CBN), as part of the
N500 billion intervention to critical economic sectors.It was gathered that the
modalities for disbursing the aviation component of the Fund has still not been
worked out, owing to the peculiar nature of the sector – which is affecting decisions
on the right funding and target carriers.
NSE DG: Candidates to Face Interview Panel-The search for a new Director-
General and other principal officers of the Nigerian Stock Exchange (NSE) has
entered into a crucial stage as those who applied for the positions will soon face an
interview panel, THISDAY can report.The NSE DG, Ndi Okereke-Onyiuke, is
expected to retire on November 2, 2010. This has compelled the NSE to advertise
for prospective candidates to apply for the post of DG and other principal officers.
Inflation dips to lowest for two years- Consumer inflation eases to 10.3%
in June •Growth in food prices declines to 12%-Inflation year-on-year eased
to 10.3 percent in June, a drop from 11 percent recorded in May and the lowest
since June 2008 when impact of global food crisis pushed it to a double digit.
Growth in food prices also eased to 12.0 percent year-on-year from 12.3 percent in
May.The growth in consumer prices is the lowest monthly year-on-year increase
since May 2008, when it rose to 9.7 percent, according to figures from National
Bureau of Statistics (NBS) weekend. “Once again, despite ample domestic liquidity,
Nigerian inflation surprises with a year-on-year fall,” said Razia Khan, head of
Africa research at Standard Chartered.
Nigeria earns N33 trillion from oil, gas in six years’-Production activities from
the nation’s oil and gas sector raked-in about $220 billion (N33 trillion) into the
Federal Government’s coffers between 2003 and 2009. Statistics obtained from the
International Oil Companies (IOCs) also revealed that the cumulative capital
investment in the sector (excluding exploration) reached about $81 billion (N12.150
trillion) during the period under review.The Chairman of the Oil Producing Trade
Section (OPTS) of the Lagos Chamber of Commerce and Industry, Mr. Andrew
Fawthorpe, disclosed this at the South West Road Show of the Nigeria Extractive
Industries Transparency Initiative (NEITI) in Lagos recently.
Bauchi NSE woos investors-Bauchi State branch of the Nigerian Stock Exchange
(NSE) is wooing civil servants in the state to invest in the stock market.The branch
manager of the NSE in Bauchi, Ahmed Maigari Misau, stated this at the weekend
during a sensitisation lecture for the senior staff of the Ministry of Information in
Bauchi, organised by the Nigerian Stock Exchange.
World recovery continues but risks increase, says IMF-Balancing the strong
growth numbers for the first half of 2010 and the adverse impact of increased
financial turbulence, the International Monetary Fund (IMF) forecasts world growth
to rise to 4 per cent this year, before falling somewhat to 4 per cent in 2011 - with
the world average masking large differences around the globe.But despite the
stronger than expected first half recovery, the IMF warned that uncertainties
surrounding sovereign and financial sector risks in parts of the euro area could
Bailout: N130bn approved for disbursement – BOI-A total of N130bn has been
approved by the Bank of Industry for disbursement to manufacturers and operators
of Small and Medium Scale Enterprises. This amount forms part of the N200bn
earmarked by the Central Bank of Nigeria for the refinancing and restructuring of
the manufacturing sector.This was disclosed by the Managing Director/Chief
Executive Officer, BOI, Ms. Evelyn Oputu, during the Quarterly Business Luncheon
organised by the Lagos Chamber of Commerce and Industry on Friday.
OPEC: Oil Market Well Supplied-The oil market will stay well supplied and an
overhang of stocks will be more than sufficient to meet any extra demand next
year, the Organisation of Petroleum Exporting Countries (OPEC) has said,
suggesting there was no need for more OPEC production for some time.OPEC cut its
estimate of demand for its own crude oil this year, saying supply from countries
outside the producer group will rise more than expected and it forecast only a small
increase in demand for its oil next year.
"The overall outlook indicates that the current stock overhang would be more than
sufficient to supply the additional volumes needed in 2011," Reuters quoted OPEC's
Monthly Oil Market Report.
July 22 Banks, CBN Plan N1.5trn Fund to Acquire Bad Debts•AMCON may begin 34 32 At the close of trading session, the All-Share Index
operation before January •NDIC set to review banks’ premium-Banks and inched up by +0.37% to close at 25,056.07 compared
with appreciation by +0.72% recorded yesterday to
the Central Bank of Nigeria (CBN) yesterday, in Abuja, unanimously agreed to
close at 24,963.99. Market capitalisation also
contribute N1.5 trillion (about $10 billion) over the next 10 years to fund the newly appreciated by N22.521 billion (US$150.439 million)
established Asset Management Corporation of Nigeria (AMCON) set up to buy bad to close at N6.127 trillion (US$40.934 billion)
compared with appreciation by N43.467 billion
debts in the banking industry.
(US$290.363 million) recorded yesterday to close at
Shareholders want core investors for rescued banks-Following the statement N6.105 trillion (US$40.784 billion. the market report
by the Governor of the Central Bank of Nigeria, Mr. Lamido Sanusi, that for the day was titled: Julius Berger, RT Briscoe,
others declare results: PZ tops gainers as ASI
Shareholders were free to recapitalise the rescued banks, some shareholdrs have
gains
called for core investors for the banks. The President of the Association for the 0.37%(http://www.proshareng.com/news/singl
Advancement of the Rights of Nigeria Shareholders, Dr. Farouk Umar, has advised eNews.php?id=11479)
shareholders to support moves to get core investors into the rescued banks, in a
bid to salvage them and prevent them from being liquidated by the apex bank.
July 28 CBN seeks five laws to drive financial sector reforms• Wants re-enactment 28 32 At the close of trading session, the All-Share Index
of BOFIA: The Central Bank of Nigeria (CBN) has sought five legislations which inched up by +0.10% to close at 25,889.98 compared
with appreciation by +1.32% recorded yesterday to
should strengthen the ongoing reforms in the financial systems and create a
close at 25,863.81. Market capitalisation also
clement environment for the banking sector to thrive. The laws are expected to appreciated by N6.398 billion (US$42.742 million) to
come alongside the issuance of new regulations by the apex bank abolishing close at N6.332 trillion (US$42.296 billion) compared
with appreciation by N82.266 billion (US$549.538
universal banking.One of the laws is a re-enactment of the Banks and Other
million) recorded yesterday to close at N6.325 trillion
Financial Institutions Act (BOFIA). Others are Office of the Nigerian Financial (US$42.254 billion).- 280710: AIICO, Finbank, CAP
Ombudsman Bill; the Nigerian Financial International Centre (Establishment) Act; drive upbeat: NSE ASI gains 0.10% to close at
25,889.98
National Alternative Dispute Resolution Regulation Commission, and the Electronic
Transaction Bill.
People Can’t Buy Banks’-Central Bank of Nigeria (CBN) said yesterday in Lagos
that while it ensures that all parties are carried along in the recapitalisation of the
Sanusi: CBN Sees Interest in all Rescued Banks- Governor, Central Bank of
Nigeria (CBN), Sanusi Lamido Sanusi, said yesterday that there was still interest
from potential investors in all of the banks rescued last year.
"I can confirm that there are parties interested in combining with each and every
one of the banks," Sanusi was quoted by Reuters as saying in Abuja.
July 29 Sanusi: CBN Sees Interest in all Rescued Banks- Governor, Central Bank of 34 39 At the close of trading session, the All-Share Index
Nigeria (CBN), Sanusi Lamido Sanusi, said yesterday that there was still interest inched up by +0.06% to close at 25,905.36 compared
with appreciation by +0.10% recorded yesterday to
from potential investors in all of the banks rescued last year.
close at 25,889.98. Market capitalisation also
"I can confirm that there are parties interested in combining with each and every appreciated by N3.763 billion (US$25.136 million) to
one of the banks," Sanusi was quoted by Reuters as saying in Abuja. close at N6.335 trillion (US$42.321 billion) compared
with appreciation by N6.398 billion (US$42.742
Market gains marginally as sell pressures mount on banking & petroleum
million) recorded yesterday to close at N6.332 trillion
stocks - The sell pressures were most significant in the banking and petroleum (US$42.296 billion).- 290710: Market gains
marketing stocks as the two sectors topped the NSE-sectoral indexes depreciation marginally as sell pressures mount on banking &
petroleum stocks
trend. The top three decliners for the day were petroleum marketing and banking
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