Investors Lose N3.21bn as NSEASI Dips by -0.02% to Open the Week Negative
Equities market closed today on a negative note, as NSEASI depreciated by -0.02% to close at 38,915.62 basis points as against -0.71% loss recorded previously. Its Year-to-Date (YTD) returns currently stands at -3.36%.
Market breadth closed negative as MORISON led 18 Gainers as against 20 Losers topped by SCOA at the end of today’s session – an unimproved performance when compared with previous outlook.
Market turnover closes positive as volume moved up by +30.11% as against -55.91% downtick recorded in the previous session. UNIVINSURE, FIDELITYBK and FBNH were the most active to boost market turnover. NESTLE and STANBIC topped market value list.
UNILEVER leads the list of active stocks that recorded impressive volume spike at the end of today’s session.
Fidelity Bank Plc Reports N19.3bn PAT in H1 2021 Audited Results,(SP:N2.30k)
Fidelity Bank Plc released its H1 2021 Audited results for the period ended June 30th, 2021.
Key Highlights
- Gross Earnings grew by 6% to N112bn from N106bn in the previous quarter.
- Profit before tax grew by 72% to N20.6bn.
- Profit after tax grew by 71% to N19.3bn.
- Net Assets declined by -0.1% from N274bn to N273bn.
- Share Price Currently Stands at N2:30k
H1 AUDITED REPORT FOR PERIOD ENDED 30 JUN
| 2021 N’m | 2020 N’m | % Change | |
| JUN | JUN | ||
| Gross Earnings | 112,304 | 105,755 | 6.20% |
| PBT | 20,628 | 11,963 | 72.40% |
| Income Tax Expense | (1,322) | (660) | 100.30% |
| PAT | 19,306 | 11,303 | 70.80% |
| EPS(k) | 67 | 39 | 71.80% |
BALANCE SHEET INFORMATION
| Net Asset | 273,372 | 273,533 | -0.1% |
In battle for equity, Nigerian states knock horns with FG
Nigerian states have grown increasingly dependent on the Federal Government for revenue since the economic crisis of 1979–1980, not minding it contradicted true fiscal federalism.
Nigeria’s oldest conglomerate eyes leaner structure to ease control
Core investors and other major shareholders in UACN plc, Nigeria’s oldest conglomerate, are progressing with plans to have a leaner corporate structure for the holding company (Holdco) while doubling down on profitable ventures for ease of control.
Manufacturers profitability pressured as production cost intensifies
The pressure on the profitability and productivity of manufacturing firms in Nigeria particularly the Fast Moving Consumer Goods (FMCG) producers has intensified over the past few months due to the consistent rise in production and operating cost.
FG approves new aviation ground handling charges after 35yrs
The federal government has approved new aviation safety threshold charges for ground handling companies after 35years since it last amended the rates. The new charges which will bring relief for ground handlers are expected to commence from October 1, 2021, for international carriers, and.
| Oil starts week with price gain amidst slow return of US supplies Oil is trading higher Monday morning to maintain the surge in price that defined the markets in the last three weeks. Brent the internationally traded benchmark crude is holding at $73.40 $/bbl having climbed above 73$/bbl for the first time after a run of three weekly gains as investors… |
CBN insists no plans to convert FX in domiciliary accounts to Naira
The Central Bank of Nigeria (CBN) at the weekend insisted that there were no plans to convert foreign exchange in domiciliary accounts of customers in order to check the purported shortage of the United States dollars in the country
Mixed Performances in the Agricultural Commodities Space
It was a muted performance for commodities listed on the Exchange, with the exceptions of Maize and Soybean. While maize gained on the Exchange, we saw a reverse performance in the open market.
Also, while Soybean bled on the Exchange, a marginal gain of 0.09% was recorded in the open market.
The ACI and AEI remained flat, however, against a bearish performance in the S&P GSCI index and Nigerian ASI for the reporting week.
Meanwhile, total trades closed on the Exchange declined for the second consecutive week by 26% with 1,946 contracts consummated in the review week.
PMA Holds on Wednesday; Yield Contracts 14bps WoW to Settle at 4.48% as Bullish Run Continues
The bullish run in the Nigerian Treasury Bills (“NT-Bills”) secondary market persisted last week, on the back of sustained positive liquidity levels (averaging N60.7bn for the week) as N119.1bn and N138.2bn worth of Open Market Operation (“OMO”) bills and NT-Bills maturities respectively hit the system during the course of the trading week.
Consequently, the average yield across all maturities shed 14bps W-o-W (from 4.71% the previous week to close at 4.58%). Precisely, most buying interests were recorded at the long end of the curve as the average yield dipped 61bps to close at 5.58% from 6.20% the preceding week. The most demands were seen on the 12-May-22, 26-May-22, and 28-Apr-22 bills as their yields fell 109bps, 90bps, and 88bps W-o-W respectively.
At the NT-Bills Primary Market Auction (“PMA”) last week, the central bank rolled over the matured N138.2bn across the 91-, 182-, and 364-Day bills which are met with strong demand. Particularly, the 364-Day instrument enjoyed the most demand with a subscription ratio of 2.2x while the trend on declining stop rate was reversed, closing 40bps higher at 7.20% (from 6.80% in the previous auction).
Please see more details of the PMA below:
| Auction Date | 8-Sep-21 | 8-Sep-21 | 8-Sep-21 |
| Allotment Date | 9-Sep-21 | 9-Sep-21 | 9-Sep-21 |
| Maturity Date | 9-Dec-21 | 10-Mar-22 | 8-Sep-22 |
| Tenor | 91-Day | 182-Day | 364-Day |
| Offer (N) | 5,060,519,000 | 23,454,545,000 | 109,651,700,000 |
| Subscription (N) | 5,846,371,000 | 12,740,004,000 | 237,538,249,000 |
| Allotment (N) | 4,938,371,000 | 11,883,004,000 | 192,682,149,000 |
| Range of Bids (%): | 2.49000 – 6.0000 | 3.4900 – 6.5000 | 6.2000 – 9.2000 |
| Previous stop rates (%): | 2.50 | 3.50 | 6.80 |
| Current Stop Rates (%): | 2.50 | 3.50 | 7.20 |
| Bid-to-Cover Ratio | 1.2x | 1.1x | 1.2x |
Going into this week, we believe market participants would stay on the side-lines, as the anticipated rollover of N38.0bn and N155.9bn worth of OMO and NT-Bills maturities respectively would give more guidance on yield levels in upcoming auctions in the near term. Accordingly, we expect a flat performance with a mildly bullish bias due to likely positive financial liquidity levels.
Please see our expectation of the PMA slated for this Wednesday (15-Sep-21):
| Auction Date | 15-Sep-21 | 15-Sep-21 | 15-Sep-21 |
| Allotment Date | 16-Sep-21 | 16-Sep-21 | 16-Sep-21 |
| Tenor | 91-DAY | 182-DAY | 364-DAY |
| Offer Amount | 1,605,535 | 5,913,188 | 148,361,351 |
| Last Stop Rate (08-Sep-21) (%): | 2.50% | 3.50% | 7.20% |
| Expected Stop Rate Range (%): | 2.00% – 3.00% | 3.00% – 3.75% | 6.80% – 7.50% |
Therefore, we advise retail investors to remain cautious, while taking position in attractive instruments during the week, as well as primary market offerings.
Please see NT-Bills indicative rates below:
| Maturity | Tenor (Days) | Rate (%) p.a. | Yield (%) p.a. |
| 13-Jan-22 | 122 | 3.70 | 3.75 |
| 10-Feb-22 | 150 | 4.35 | 4.43 |
| 31-Mar-22 | 199 | 4.80 | 4.93 |
| 26-May-22 | 255 | 6.40 | 6.70 |
| 30-Jun-22 | 290 | 6.84 | 7.23 |
| 14-Jul-22 | 304 | 7.06 | 7.50 |
FGN Bonds Update: Average Yield inch 5bps higher WoW to 11.04%
At the FGN bonds secondary market, performance was mixed as investors adjust their portfolios with suitable instruments across the curve. Subsequently, the average yield across the market slightly advanced 5bps to close at 11.09% from 11.04% the week before.
In more detail, sell-offs were recorded at the long end of the curve as the average yield gained 18bps W-o-W to close at 12.48%. While the short- and mid-term bonds witnessed some buying interests as yields in both segments shed 3bps W-o-W apiece.
This week, the National Bureau of Statistics (“NBS”) is slated to release the CPI and Inflation report for August. So, we believe trading activities in the bonds space will be influenced by the data, as well as the expected NTB and OMO auctions this week. Thus, we advise investors to trade cautiously and position in maturities that have recorded improved yields along the curve.
Please see below FGN Bonds secondary market indicative rates:
| Bond | Tenor (Years) | Yield (%) | Coupon (%) | Implied Price (N) |
| Apr-23 | 2 | 8.10 | 12.75 | 106.90 |
| Mar-24 | 3 | 8.20 | 14.20 | 113.31 |
| Mar-25 | 4 | 9.40 | 13.53 | 112.14 |
| Jan-26 | 5 | 9.70 | 12.50 | 109.73 |
| Mar-27 | 6 | 10.30 | 16.29 | 124.70 |
| Feb-28 | 7 | 10.70 | 13.98 | 114.97 |
| Jul-34 | 13 | 11.40 | 12.15 | 104.95 |
| Mar-36 | 15 | 11.85 | 12.40 | 103.76 |
| Apr-37 | 16 | 11.50 | 16.25 | 134.05 |
| Apr-49 | 28 | 11.80 | 14.80 | 124.31 |
Remittance to Africa Projected to Decrease in 2021
Remittances to African countries are expected to decrease by 5.4 percent from $44 billion in 2020 to a projected total of $41 billion in 2021, due to the effects of Covid-19 pandemic, according to findings of Continental Migration Report 2021
Buhari Sets Record as Nigerians Grow Poorer for Sixth Straight Year
At no point in its 60-year history has Nigeria’s economy expanded slower than its population for a longer period than between 2015 and 2020, an indictment on President Muhammadu Buhari who has led the country in that time.
Headline Inflation Maintained Its Declining Trend in July 2021
The headline index grew by 17.38% YoY in July 2021, 0.37% lower than 17.75% recorded in June 2021. Likewise, food inflation inched up by 21.03% YoY in July 2021, 0.80% lower than 22.83% recorded in June 2021.
Oil Prices Bounce Back as Bullish Sentiment Returns – OIR 100921
With three-quarters of crude production still shut in the Gulf of Mexico, Hurricane Ida remained one of the key factors determining price movements this week. In addition to tight US supplies, with the EIA reporting a 1.5 million b/d week-on-week drop in total production.
Debt Servicing: Nigeria Pays $1.79bn to World Bank, China in Five Years
Nigeria spent $1.79bn in five years on servicing the debts owed to World Bank and the Exim Bank of China, according to an analysis of data on actual external debt service payments from the Debt Management Office.
FG Will Obey Court’s Final Verdict on VAT Issue – Adesina
Special Adviser to the President on Media and Publicity, Femi Adesina, on Sunday said President Buhari will abide by whatever final verdict the judiciary passes on the ongoing Value Added Tax (VAT) legal tussle.
