Invest Data Consulting Ltd

Encouraged by the success of its $163m share sale in the 2017Q4 to boost lending, and the Federal Government’s $2.5bn Eurobond sale in February, Union Bank of Nigeria is working with Citigroup and Renaissance Capital on a planned Eurobond sale, two banking sources told Reuters. The $2.5bn Eurobond is for refinancing local currency bonds at lower cost, just as there are plans for a further $2.8bn this year. Union Bank and Renaissance Capital declined to comment, while a Citi representative was unable to make immediate comment. Sources say Union Bank, which is 22.1% owned by Atlas Mara, could issue up to $250m in bonds including one in local currency and plans to utilize lending opportunities in the agribusinesses sector. Nigerian banks are gearing up to tap Eurobonds to boost lending and to refinance existing dollar debts before interest rates begin to rise further in the United States. The race for more capital has also been fuelled by stricter accounting principles on how l...

Implications for our coverage banks: The CBN dividend policy assesses banks on their eligibility to pay dividends based on the capital adequacy ratio (CAR) and their non-performing loans (NPL). Below, we have analysed our coverage banks based on these metrics and highlighted how this policy will impact dividend payment for FY’17. From the graph above, DIAMONDBNK as at 9M’17 is currently below the minimum capital adequacy ratio required for systemically important banks. If the trend persists into full year, DIAMONDBNK will not be eligible to pay any dividend. We highlight that ETI and FBNH are also close to the regulatory minimum but it is highly unlikely that these banks will breach this by FY’17 given that they are expected to capitalize their earnings after the full year audit – this is expected to strengthen CAR. As at 9M’17, STANBIC, FIDELITYBK, DIAMONDBNK, ETI and FBNH are all above the minimum 5% threshold hence, if they are eligible to pay dividend it will be cappe...

MARKET UPDATE FOR DECEMBER 14, 2017 It was a difficult trading session on the Nigeria Stock Exchange on Thursday, as market indicators declined further on a highly volatile mode to consolidate the losing streak that almost wiped out all of the gains recorded month-to-date, due to massive profit taking in blue chip stocks that almost triggered panic among retail investors. Considering what the market had done in terms of performance year-to-date especially, profit taking is not unexpected also given that it is an integral aspect of stock trading and investing. Trading activities for the day started out with a little pop to the downside, reaching intraday lows of 37.840.14, breaking down the psychological line of 38,000 and strong support level of 38,241.45 from the day’s high of 38,539.91 on below recently traded market average volume.  The index had actually formed bear wedge, despite reducing the losing streak to close the day at 37,933.70 which was also lower than ...

NSE INDICATORS SEEK DIRECTION, AS VOLATILITY, PORTFOLIO REBALANCING, PROFIT TAKING LINGER The stock market on Thursday was lower on a mixed session that was volatile as traders took profit from short positions in rebalancing their portfolios and positioning. The mixed sentiments followed the indifference among market players to the N8.6tr 2018 budget estimates submitted to the National Assembly and the downgrade of Nigeria’s sovereign rating by Moody’s. The seemingly weak speculation at this point should not shake you out of position as major factors to force prices to another lower lows are currently absent in the market except for market sentiment to different news or policy statements and action of the government or its agency. The smaller the range, the less the volume, the higher the possibility that the uptrend will continue since the recent strong resistance level have been broken, waiting for more volume for continuation of uptrend. The retention of Nigeria in the MSCI ...

AGAIN, IT’S CAUTION, AS INVESTORS, TRADERS AWAIT MORE DATA, BREAKDOWN OF 2018 BUDGET Nigeria’s equity market on Wednesday had a very volatile session, but continued its uptrend despite the seemingly weak market breadth, closing higher on the strength of last minutes appreciation in the share price of Dangote Cement (which alone accounts for about one-third of total market capitalization), following which it traded above the psychological line of 37,000 level on a low volume that made technicals for the day weak and mixed.  During, the trading session price performance of banking stocks were mixed as the sector’s index, as well as the NSE Insurance closed lower. The fact that the Tuesday’s presentation of a N8.6tr Appropriation Bill for 2018 had little or no impact on the market, could mean that investors are indifferent to the fiscal spending plan, given, like Investdata noted in its update of Tuesday, that the effect of the 2016 budget and the current one (2017) has n...

MARKET INDICATORS REMAIN FLAT, INVESTORS CONSOLIDATE POSITION, AWAIT FRESH BOOST Trading on the Nigeria Stock Exchange closed narrowly down on Monday to start the week as market players continued to interpret and digest the numbers posted by listed companies in the just concluded earnings season, while identifying those that really beat market expectation and analysts’ estimates.  The ongoing portfolio restructuring and balancing has created opportunities for short-term trading especially given that year-end sentiment and seasonal changes are underway, at a time impressive financials released continue to boost confidence in expectation of higher dividend in the full year earnings reporting season of 2018. The benchmark index on intraday gain broke out the psychological line of 37,000 to touch high of 37,014 from the 36,910.49 low before pulling back to close the trading session marginally lower from Friday’s level, despite the seeming range at the current resistance le...

NOVEMBER TRADING BEGINS POSITIVE ON NSE, AMIDST LINGERING VOLATILITY The first trading day of the eleventh month of year was highly volatile but positive to close the session higher, consolidating a bull transition that is driven by earnings performance that released at the last minutes to the market in compliance with regulatory requirements of the Nigerian Stock Exchange (NSE). Despite the mixed numbers all the key market performance indices were on the rise over the last three trading sessions on high buying pressure, irrespective of profit taking that continued on daily basis. The day started out on slight decline that lingered to midday, reaching a low of 36,427.31 basis points before rallying back by afternoon to touch an intraday high of 36,888.04 which had been the resistant level in recent times, forming a double top that suggests pullback at this point or a break out, depending on market forces and sentiment as players- both local and international continue to ...

NSE INDEX SET TO CLOSE POSITIVE IN OCTOBER AMIDST STRONG Q3 NUMBERS Nigeria’s equity market had a very narrow up on Monday to start the week on mixed despite the increasing number of companies that released their quarterly earnings to the market during the trading session, with their numbers revealing mixed performance, as some companies posted positively surprising earnings that offered insights into the transformation activities going within these companies. These, more or less, also reflected the fact of the larger economy coming farther out of the woods, just as they confirm that the economic fundamentals being portrayed are not just on paper, but real, particularly the Nigeria’s exit from recession with its Q2 GDP growth of 0.55% after five consecutive quarters of being negative. Nonetheless, the slow reaction to these numbers is evidence that liquidity in the market is low even at the end month that coincides with the official end of earnings reporting season. ...