Archive for August, 2011

The Monetary Policy Committee of the Central Bank of Nigeria met for their regular meeting on July 25th and 26th 2011. The 3 major decisions made were:

1. To tighten monetary policy by a majority decision of 10 to 2.
2. To raise the MPR by 75 basis points from 8.0 per cent to 8.75 per cent by a majority vote of 8 members in its favour, 1 member favoured 50 basispoint increase while 3 members voted for holding the MPR at 8.0 per cent.
3. To maintain the corridor at +/- 200 basis points around the MPR.

Below is the summary from the communique of the meeting:

The Monetary Policy Committee (MPC) met on 25th and 26th July, 2011 to review domestic economic conditions during the first half of 2011 and the challenges facing the Nigerian economy against the backdrop of developments in the international economic and financial environment in order to chart the course of monetary policy in the second half of the year.

On the global scene, the Committee noted with concern the enormity of the challenges being faced by the US and euro zone countries as well as the major emerging market economies such as the fiscal position of Brazil, possible real estate bubbles in China and seemingly intractable inflation in  India, which may impact the Nigerian economy adversely through several channels. The economic slowdown and the commodity price inflation in the international economy as well as the rapid increase in prices of some asset classes in some emerging market economies remain serious threats to the global economic recovery. There are continuing widespread threats of inflationary pressures fuelled by the sustained high energy, commodity and food prices in the global economy. Headline inflation in many of the major emerging market economies is now exceeding 6 per cent and is running close to or above central banks’ targets in a number of other larger economies.

The performance of the global financial markets was mixed. Many national currencies in Africa depreciated against the US dollar while in many emerging markets, currencies appreciated vis-à-vis the US dollar during the first half of 2011. Furthermore, most stock markets around the world showed weak recovery during the period due to high inflation, weakening consumer confidence and government finances, particularly in the US and eurozone. The unfolding debt crises in the European periphery could damage confidence and output in the near-term while the US debt and unemployment situation pose grave danger to the international economy given the reserve currency role of the US dollar and the size of the US economy. It is not unlikely that the US will lose its AAA rating and actual default is possible unless a deal can be worked out between the White house and the Congress.

On the domestic scene, the Committee noted that inflationary pressures which were traceable to the high expenditure levels associated with the April 2011 general elections as well as the effects of rising international energy, commodity and food prices had moderated by June 2011. This development was due in part to the tight monetary policy stance of the Bank since September of 2010. However, the Committee observed that the inflation outlook appears uncertain owing to the expected implementation of the new national minimum wage policy and the imminent deregulation of petroleum prices.

Significant injection of liquidity from FAAC in the third quarter coupled with the impact of AMCON recapitalizing intervened banks to the tune of N1.6 trillion will both add to inflationary pressures. The Committee welcomed the favorable growth projections but cautioned that the current security challenges, infrastructural bottlenecks and the uncertainty in the international economy as well as fiscal developments could undermine investors’ confidence and output growth in the near term.

The Committee expressed serious concerns about the continued sluggish growth of credit to the private sector during the first half of the year which is attributed, among other factors, to the heightened credit risk in the real economy as a result of the persisting structural problems occasioned by the inadequate power supply and critical infrastructure deficit. It also observed that the lending rates of deposit money banks (DMBs) remained relatively high.

You can download the full communique below:

MPC JULY COMMUNIQUE NO 77 (373)

And here is the communique from the June meeting:

CBN - MPC Communique No 76 Issued on May 24 2011 (367)

Before the July 25th and 26th meeting, Afrinvest, Access Bank, and Vetiva had released preview documents of the Central Bank’s decision, you can read them below:

Monetary Policy Committe Decision Preview - Access Bank - July 25th 2011 (415).

Monetary Policy Committee Communique - Afrinvest - July 26th 2011 (388).

Monetary Policy Committee Decision Preview - July 2011 - Vetiva (407)

Courtesy of FSDH Securities, here are the results released in the weeks of July 18th – 22nd, July 25th – 29th and August 1st – 5th:

Morning…

Here is the summary of the Nigerian Stock Exchange for the week ended August 5th 2011 (reports and summary for the last week will be posted soon).

+ The NSE All-Share Index lost 180 bps cumulatively this week.
+ Bearish sentiments were prevalent in the banking sector this week depleting previous gains recorded. Participants however appeared to favour Oceanic Bank on the back of merger news with ETI and speculative trades led to a 19.8% cumulative gain for the stock this week. On the flip side, rescued banks Unity Bank, Afribank and Intercontinental Bank recorded losses ranging from 11.6% to 18.6%.
+ Marginal gains was recorded by two companies in the building materials sector this week, institutional purchases during the week took Ashaka Cement into positive territory with a 2.3% gain, while a hold back on offers and subsequent upward review of Lafarge Wapco prices also led to a 1.1% mark-up. Dangote Cement was quiet during the week with average daily volumes of about 100,000 units and price hovering between N118.00-N120.00.
+ In the breweries sector, bullish sentiments during the week firmed up the prices of Guinness and NB, they however also attracted investors seeking to exit positions. They both bagged cumulative gains in excess of 3.0% at the close of the week.

And here are the stats:

Here are the NSE reports  (from Afrinvest, FSDH, IBTC, and Lead Capital) for the week ended August 5th 2011.

NSE Weekly - Afrinvest - August 5th 2011 (396).

NSE Weekly Report - FSDH - August 5th 2011 (471).

NSE Weekly Report - FSDH - August 5th 2011 (369).

NSE Weekly - IBTC - August 5th 2011 (367).

NSE Weekly Update - Afrinvest - August 5th 2011 (385)

Here are the reports for the week ended July 29th 2011:

NSE Weekly Report - FSDH - July 29th 2011 (414).

NSE Weekly Report - IBTC - July 29th 2011 (462)

Here are the reports for the week ended July 22nd 2011:

NSE Weekly Report - Afrinvest - July 22nd 2011 (369).

NSE Weekly Report - FSDH - July 22nd 2011 (388).

NSE Weekly Report - Lead Capital - July 22nd 2011 (353)

In the last month, most of the Nigerian banks have released their results. Here are the press releases from the banks, and results and analysis from some stockbrokers:

Company Result - Afrinvest - First Bank Plc - H1 2011 Result (491).

Company Result - Afrinvest - Stanbic IBTC - H1 2011 (381).

Company Result - Afrinvest - Sterling Bank - Q2 2011 (398).

Company Result - Diamond Bank - Unaudited Result Q2 2011 - Press Release (508).

Company Result - Diamond Bank - H1 2011 Result (413).

Company Result - Diamond Bank Plc Q2 2011 Conference Call - Afrinvest (1388).

Company Result - Ecobank Nigeria PLC - H1 2011 Result (532).

Company Result - FCMB - H1 2011 (368).

Company Result - FCMB - Proshare - July 2011 (444).

Company Result - First Bank - H1 2011 Press Release (430).

Company Result - First Bank - H1 Unaudited Results (378).

Company Result - First Bank of Nigeria Plc - Q2 2011 Conference Call - Afrinvest (1361).

Company Result - First City Monument Bank Plc - H1 2011 (430).

Company Result - First City Monument Bank Plc - Q2 2011 Conference Call - Afrinvest (1363).

Company Result - Skye Bank - H1 2011 - Unaudited Results (409).

Company Result - Press Release - FCMB - H1 2011 (374).

Company Result - Skye Bank Plc Q2 2011 - Afrinvest (370).

Company Result - Stanbic IBTC - Unaudited Result Q2 2011 (372).

Company Result - Stanbic IBTC Bank Plc - H1 2011 - Press Release (506).

Company Result - Sterling Bank - Q2 2011 (374).

Company Result - UBA - H1 2011 (396).

Company Result - UBA - July 2011 - Proshare (510).

Company Result - UBA Plc Q2 2011 - Afrinvest (440).

Company Result - Zenith Bank Plc H1 2011 Conference Call Notes- Afrinvest (1585)

Last Friday,the licenses for Afribank, Bank PHB, and Spring Bank were revoked and their assets and liabilities have been transferred to the newly incorporated Bridge Banks:

1. Mainstreet Bank Limited has assumed the assets and liabilities of Afribank Nigeria Plc.

2. Keystone Bank Limited has assumed the assets and liabilities of Bank PHB Plc.

3. Enterprise Bank Limited has assumed the assets and liabilities of Spring Bank Plc.


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