Archive for January, 2011

Courtesy of FSDH, Lead Capital, IBTC and Afrinvest, here is the analysis of the Nigerian Stock market for the week ended January 21st 2011:

+ The NSE All-Share Index inched up at the end of the week by 153 bps, despite a weakened start.
+ The banking sub-sector rallied with more gains than losses this week, in spite of profit taking activities by participants. Few banking stocks recorded losses as Skye Bank, Stanbic IBTC, Union Bank, Bank PHB and Afribank all shed above 2.0% apiece. Low priced stocks were participants’ favourites this week and this led to some recording double digit gains at the end of the week. FinBank, Unity Bank and Spring Bank gathered 13.0%, 15.9% and 25.4% respectively, while some of them closed with unsatisfied bids. Some top-tier banks also recorded gains in excess of 3.0% each.
+ In the building materials sector, Dangote Cement emerged the lone gainer in the sector this week inching up marginally, while Lafarge WAPCO and Ashaka Cement both shed over 2.0% apiece.
+ Guinness inched up with a 13.5% gain, while International Breweries bagged a 9.0% gain to close the week. On the flip side, profit taking activities shaved off 6.0% from NB, signaling the end of its week-long rally.

Below are 2 speeches given by the CBN Governor at Igbinedion University and Tafawa Balewa University respectively. One is on the growth prospects of the Nigerian Economy and the other on the impact of the global financial meltdown on the Nigerian banking sector.

Convocation Lecture - Growth Prospects For The Nigerian Economy - Sanusi - Nov 2010 (531).
Global Financial Meltdown and The Reforms In The Nigerian Banking Sector - Sanusi - Dec 2010 (473)

The minutes from the just concluded meeting of the Central Bank’s monthly Monetary Policy Committee meeting has been released. The excerpts are below:

<blockquote>MPC Decisions
In the light of the above considerations, the Committee is committed to maintaining price stability by pursuing the current policy thrust of monetary tightening in view of the perceived inflation risks in the near term. The Committee took the decision to further tighten monetary policy.  This was a decision taken by a majority of 11:1.  The following measures were approved:
1.  Raise the MPR by 25 basis points from 6.25 per cent to 6.50 per cent with immediate effect (a majority vote of 11:1);
2.  Maintain the symmetric corridor of +/- 200 basis points by 7-5; 4 members voted for asymmetric corridor by 50 basis points increase in Standing Deposit Facility rate;
3.  Raise the Cash Reserve Requirement (CRR) Ratio by 100 basis points from 1.00 per cent to 2.00 per cent with effect from February 1, 2011 with a majority vote of 11:1; and
4.  With effect from March 1, 2011, raise the Liquidity Ratio (LR) by 500 basis points from 25.00 per cent to 30.00 per cent with a majority vote of 11:1.</blockquote>

And you can download the full minutes below.

Market notes:
The market resumed on a profit-taking note this week as the NSE All-Share Index cumulatively gained 419 bps.

Participants, reacting to the disbursement disclosure by AMCON, scrambled for the available shares of rescued banks leading to cumulative gains in excess of 16.7% for Spring Bank, Afribank, FinBank and Oceanic Bank. Some mid-tier banks were also favoured this week, with Fidelity Bank, Sterling Bank and Stanbic IBTC bagging gains all week and recording cumulative appreciation of 11.1%, 11.4% and 15.8% respectively. Selling pressure however curbed the ascent of top –tier banks to marginal gains.

News on investments by Heineken in some breweries acted as a catalyst for the rally on NB. This and a combination of held back offers by sellers fuelled a frantic demand for the stock as it subsequently bagged a 10.0% gain at the close of the week. Demand for Guinness shares also remained strong this week, however illiquidity acted as a barrier to any price appreciation.

In line with the market trend, all companies in the building materials sector recorded price appreciations this week; Ashaka Cement inched up with a 5.2% gain, while CCNN and Lafarge WAPCO recorded gains of 6.0% and 4.2% respectively. Dangote Cement also inched up by 2.7% this week.

Below is the excerpt from Stanbic IBTC’s Quarterly Review for Q4 2010 and their outlook for 2011. You can download the full report below.

Below is the Official NSE 2010 Market Review and 2011 Outlook. Some points of note:

  • Mixed performance by listed companies
  • Declining income and savings
  • Absence of margin facilities
  • Reduction of bank exposure to margin loans
  • Continued banking reforms
  • AMCON commenced operations
  • GDP growth averaged 7.6% with oil contributing 84% of GDP
  • Government revenue was N5,297.18 billion which was 11% below budget requirement
  • Inflation was at 12.8% as of Nov 2010
  • 93.3billion shares with a value of N797.55billion traded
  • Average of 377million shares worth N3.2billion traded daily
  • Zenith Bank, First Bank, GTBank, UBA and Access Banks were the most traded
  • 2011 growth projected to be 7 – 7.4%
  • Big risk of inflation

Proshare has prepared the wonderful report below listing all the results released in the NSE for 2010.

Full Year Results, Forecasts, Dividends, Listings and Delistings For 2010 - Proshare (622)

Courtesy of Afrinvest and Lead Nigeria, here is the NSE report for the week ended January 7th 2011:


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