Invest Data Consulting Ltd

Investors Look To Earnings Season For Strong Recovery Moves By Nigerian Stocks Nigeria Stock Exchange on Thursday had what could be described as a tsunami to kick start the month of March on a negative note as it wiped out the gains of previous day. The day started with a marginal gap up in the morning followed by a sharp decline in the mid-morning session to afternoon to reverse the sharp rebound of February’s last trading session near resistance. The bear wedges formed were reduced slightly in the last trading minutes to close the day. The sharp pullback witnessed during the trading session were due to value losses by high cap stocks after the index had broken the symmetrical triangle chart pattern to trade above the 20-Day Moving Average in the previous day. The index hit intraday highs of 43,366.29 from lows of 42,628.21 before closing at 42,843.38. Market technicals for the day were negative and weak, with selling pressure of 71% on low volume traded, while buying posit...

Market Update for February 27 Nigeria’s stock market on Tuesday continued its volatility, only that this time the five-day seeming bull transition was halted, after highly capitalized stocks closed south, caving in under pressure from profit takers, despite the rebound in oil and gas stocks due to expected high payout from the sector. It is not known whether the slide had anything to do with investors and traders being unimpressed with the stronger-than-expected Q4 and 2017 full year GDP data released by the National Bureau of Statistics (NBS), showing that Nigeria’s economic recovery remained on course as the 2017 full-year GDP came at 0.83%, compared to the 1.58% year-on-year contraction recorded in 2016. Nonetheless, the data is a signal that the nation’s economic recovery is seriously on track, largely driven by improvements in all major sectors. It is also important to note such other factors and drivers of the economic recovery as the rising oil price in the internation...

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...

Nigeria's equity market started the week on a scary note on Monday with the composite All-Share index plunged from the opening of the day's trading session in continuation of last week's correction wave to record the highest loss position in the last six trading days of down market. It had a 6-wave decline, and by midday rallied off on the strength of Dangote Cement's gain to reduce losses, after touching intraday highs of 43,198.00 from lows of 42,080.55, which it rolled over, closing the day at 42,737.89. Trading for the day reflected market players’ fear and panic selling which was as a result of extended negative sentiments of corrections.   With this in mind, as we said on Friday, the psychology always changes when stocks go down. At this point many search for stories to fit the price, trying to raise up a negative scenario unfolding for the market. Having been involved in the market for more than 15 years, I have seen, within short and long term cy...