June 2011:
LBS Executive Breakfast June 2011 (272).

Prior Months:
LBS Executive Breakfast May 2011 (243).
LBS Executive Breakfast April 2011 - 1 (198).
LBS Executive Breakfast April 2011 - 2 (205).
LBS Executive Breakfast March 2011 (193).
LBS Executive Breakfast February 2011 (192)

The banking sector recorded fairly matched gains and losses this week. Profit taking mid-week curbed the rally on UBA and Oceanic Bank, subsequently leading to marginal gains of 3.4% and 1.5% respectively. Mid-tier banks, Skye Bank, Access Bank and FCMB also inched up marginally with gains of 8.7%, 4.8% and 4.0% respectively.

Bullish sentiments dominated the breweries sector throughout the week as most stocks in the sector recorded varied gains. Guinness traded mostly at top price throughout the week but closed flat due to a dearth of volumes. NB recorded marginal gains, while International Breweries gathered 27.2% cumulatively.

Activities in building sector were on the upbeat this week as Lafarge Wapco topped the gainers’ list in the sector. This was closely followed by Dangote Cement and CCNN with gains of 5.0% and 4.9% respectively, while Ashaka Cement recorded a 3.3% mark-up in its share price.

Afrinvest Weekly Market Update - May 13th 2011 (194).

Afrinvest Weekly Update 13th May 2011 (199).

NSE Weekly Report - IBTC - May 13th 2011 (207).

NSE Weekly Report - Lead Capital - May 13th 2011 (191).

I encourage you to take time to read of these reports. From the report on the banking sector, they broke down the banks into the following tiers:

The September 2010 Monthly Economic Note provides very valuable information on the major economic news so far in the month of September. And the 2010 Economic Review is one of the most detailed analysis of the Nigerian economy that I have come across this year.

Happy Reading!

Vetiva – Banking Update – The Next Chapter

Vetiva – Economic And Financial Review – 2010 Review and Outlook

Vetiva – Monthly Economic Note – September 2010

Results for September 6th – 10th, 2010

Results for September 13th – 17th, 2010

Results for September 20th – 24th, 2010

Lagos Business School – Monthly Economic Review Presentation – Sept 2010

You can also read the presentation for August below:

Lagos Business School – Monthly Economic Review Presentation – August 2010

Here are some important slides from the presentation. But to get the full benefit, download and review the entire presentation.

As extra, here are the monthly stock market reports from Proshare NG and the NSE itself:

Proshare – Monthly Stock Market Summary – August 2010

NSE – Monthly Stock Market Summary – August 2010

Leading Economic Indicators:

Inflation, Exchange Rates and External Reserves:

Market Highlights:

Top Gainers and Losers:

Best Corporate Results:

Access Economic Quarterly Q2 2010
FSDH – Economic and Financial Market Review and Outlook – HY2 2010
IBTC Quarterly Economic Review – Q2 2010

Here is Access bank’s outlook for the rest of the year:

- GDP growth to stay above 6% in the near – medium term. NBS recently projected that the economy would grow by 7.74% by end-2010, up from 6.66% recorded in 2009. However, the growth trajectory may be undermined by a downward spiral in oil price at the international market, amid weak demand fundamentals, poor state of infrastructure, sustained inflationary pressures and the possibility of breakdown of FG’s Amnesty Programme.

- Moderate inflationary pressures due to CBN’s AMCON, SME and Power Sector Intervention Funds. Expansionary nature of the budget, moderate increase in commodity prices, announcement effect of salary increase for public sector employees and the proposed removal of petroleum products subsidy may pose additional upside risks to price stability. However, inflation appears to be effectively balanced by the continued underperformance of monetary aggregates, well-anchored inflationary expectations, weak aggregate demand, adequate supply of food and petroleum products, as well as stability in Naira’s exchange rate.

- Naira to stay stable against the US Dollar in the near term. CBN remains the largest supplier of foreign exchange in the economy and with expected increases in sale of FX by oil companies following FG’s peace deal with militants, Naira would further stabilize at current levels. Naira’s outlook remains tied to size of external reserves, FX demand, sustained high crude oil price, as well as development in global economy.

- Domestic interest rate to remain stable at current levels. Decline in statutory returns and the erosion of confidence in the market pose upside risks to a stable interest rate outlook. However, the CBN extension of its guarantee for all interbank transactions from December 2010 to June 30, 2011 will likely stabilize rates at current levels.

- Equities market to experience rebound from recent lows. Improved investors’ optimism and expected positive effect of the AMCON arrangement would likely put key indicators of the equities market in an upward trajectory in the medium term, when the company is expected to buy up banks’ toxic assets.

- The bond market is set to receive a boost. We also anticipate an increase in state and corporate bond issues to better fund longer term projects. Also FG has plans to finance N897 billion of its total deficit worth N1.5 trillion from the local bond issues.

- Banks earnings likely to be suppressed, as competition is expected to reduce profit margin, especially with respect to interest rate spread. A resurgence in massive deposit mobilization drive may distort the relatively stable interest rates in the money market.

Afrinvest 2010 Banking Sector Report

Here are some charts from the report:

Market share by total assets and total deposits:

Bank share by shareholder funds and total loans:

Bank Capitalization:

Market share by gross revenues:

Operating statistics:

And here are the reports:

FSDH – Weekly NSE Report – Aug 13th 2010

Lead Capital – Weekly NSE Report – Aug 13th 2010

IBTC – Weekly NSE Report – Aug 13th 2010

Lead Capital and IBTC’s reports for this past week were particularly rich. Lead Capital’s had a lot of information and news analysis on the macroeconomic events while IBTC’s included analysis of 3 stocks and their recommendations.

Money and Fixed Income markets
The money market was tight as a result of about N105bn that left the system through Federal Government Bond auction. Consequently, inter-bank rates inched up at the end of the week. Available data showed that 7-day NIBOR closed the week at 2.03%, 84 basis point increase from the previous week’s figure of 1.88%, while 90-day NIBOR closed the week at 7.13%, a 71 basis point increase from the previous week’s figure of 6.83%.

There was no activity at the 91-day, 182-day and 364-day Treasury Bills auction. However, at the re-opening of the 3-year FGN Bond auction, the DMO offered N35bn, while it was 220% subscribed at N77bn. The Bond carried a marginal rate of 7.48%. At the re-opening of the 5-year FGN Bond auction, the DMO offered N35bn, while it was 175.26% subscribed at N61.34bn. The Bond carried a marginal rate of 8.85%. The 20-year FGN Bond auction was a new issue, the DMO offered N35bn while it was 209.37% subscribed at N73.28bn. The Bond carried a coupon rate of 10%.

In all, this week, there was a total outflow of N105bn from the primary segment of the government securities market.

At the foreign exchange auction held on Monday, July 19, 2010, the CBN offered and sold a total of US$250mn, while demand stood at US$311.25mn, representing 124.50% of what was offered. On Wednesday, July 21, 2010, the CBN offered US$250mn, demand stood at US$205.50mn, representing 82.20% of what was offered, while the total sale was same as demand of US$205.50mn. During the week, a total of US$455.80mn was sold, compared to US$500mn sold in the previous week, while US$516.75mn was demanded, representing 103.35% of what was offered.

The value of Naira appreciated at the inter-bank and parallel markets, but depreciated at the official market segment of the foreign exchange market. At the inter-bank market segment of the foreign exchange market, the value of Naira appreciated by 66kobo to close at N149.90/US$1, compared to N150.56/US$1 in the previous week. At the parallel market segment of the foreign exchange market, the value of the Naira appreciated by 30kobo to close at N152.20/US$1, compared to the previous week’s figure of N152.50/US$1. At official market, the value of the Naira depreciated by 10kobo to close at N148.72/US$1 from N148.62/US$1 in the previous week.

Equities Market
Investors’ interest was sustained in the market during the week on account of good earnings reported and the progress made in establishing the Asset Management Corporation of Nigeria (AMCON). Consequently, the Nigerian Stock Exchange All Share Index (NSE ASI) closed the week on a positive note. The NSE ASI appreciated by 1.70% to close at 25,269.36 points, compared to the marginal appreciation of 0.96% recorded in the previous week; bringing the Year-To-Date (YTD) to 21.33%. The appreciation in the Index was as a result of the gains recorded in the Banking and Manufacturing & Allied sub-sectors. Similarly, the market capitalization appreciated to close the week at N6,179.97bn (approximately US$41.55bn), recording an appreciation of 1.70%, compared to the marginal appreciation of 0.96% recorded in the previous week.

The value of stocks in the Banking Sector  by 1.72% to close the week at 277.46 points, compared to the previous week’s appreciation of 3.79%. The appreciation in the Index was due to the gains recorded in the share prices of Sterling Bank (Up 7.39% to N2.18), First Bank (Up 6.92% to N14.06), Diamond Bank (Up 5.63% to N7.50), Access Bank (Up 4.94% to N8.50), UBA (Up 3.78% to N10.43), Stanbic IBTC (Up 2.00% to N9.18) and Fidelity Bank (Up marginally 0.44% to N2.29). However, there were depreciation in the share prices of FCMB (Down 6.17% to N7.30), Zenith Bank (Down 1.00% to N12.86), Skye Bank (Down marginally 0.69% to N7.20) and GT Bank (Down marginally 0.41% to N17.01).

The value of stocks in the Manufacturing & Allied sector appreciated by 1.38% to close the week at 305.51 points, compared to the previous week’s appreciation of 1.27%. The appreciation in the Index was due to gains recorded in the share prices of Cadbury (Up 12.06% to N29.00), Ashakacem (Up 11.63% to N19.00), UACN (Up 7.29% to N43.99), PZ Cussons (Up 6.56% to N32.50), Dangote Flour (Up 5.24% to N20.50), Honeywell Flour (Up 3.94% to N6.80), CCNN (Up 3.70% to N16.80), NAHCO (Up 2.50% to N10.25), Dangote Sugar (Up 1.71% to N17.80), Unilever (Up 1.44% to N24.00), UPDC (Up marginally 0.14% to N21.00) and Benue Cement (Up marginally 0.08% to N62.05).

The value of stocks in the Petroleum Marketing sector depreciated by 1.88% to close at 421.50 points, compared to the previous week’s depreciation of 1.27%. The depreciation in the index was due to losses recorded in the share prices of Mobil Oil (Down 5.00% to N185.94), Conoil (Down 4.81% to N49.50), and Oando (Down marginally 0.41% to N69.71). All other stocks in the index closed the week unchanged.

The value of stocks in the Insurance Index depreciated by 1.18% to close the week at 98.05 points, compared to the previous week’s marginal depreciation of 0.34%. The depreciation recorded in the Index was because of the losses recorded in the share prices of Intercontinental WAPIC (Down 19.12% to N0.56), N.E.M Insurance (Down 5.66% to N0.50), AIICO Insurance (Down 4.20% to N1.14), Law Union & Rock (Down 3.70% to N0.52), Oasis Insurance (Down 3.51% to N0.55) and Custodian & Allied Insurance (Down 3.10% to N3.44).

Other top gainers for the week were Afribank (Up 26.16% to N2.17), Wema Bank (Up 23.53% to N1.05), Oceanic Bank (Up 19.63% to N1.95), Union Diagnostic (Up 16.36% to N0.64) and CHAMS (Up 15.69% to N0.59); while other top losers for the week were Afromedia (Down 12.50% to N0.56), Beco Petroleum (Down 11.24% to N0.79), Livestock Feeds (Down 10.45% to N0.60), FTN Cocoa (Down 9.72% to N0.65) and Okomu Oil (Down 9.65% to N12.26). Overall, forty-six (46) stocks recorded gains in their share prices; forty-three (43) stocks recorded losses, while one hundred and twenty-six (126) stocks closed the week unchanged.

Over-the–Counter Bond Market
A turnover of 261.75mn units worth N291,668.8mn in 3,286 deals was recorded this week in contrast to a total of 255mn units valued at N293,555.5mn exchanged in 2,554 deals during the week ended Thursday, July 15, 2010. The most active bond (measured by turnover volume) was the 4th FGN Bond 2014 Series 11 with a traded volume of 57.05mn units valued at N66,880.72mn in 1,135 deals. This was followed by the 7th FGN Bond 2015 Series 1 with a traded volume of 56.1mn units valued at N54,980mn in 548 deals. Eighteen (18) of the available thirty-seven (37) FGN Bonds were traded during the week, compared with twenty-four (24) in the preceding week.

The reports from FSDH, Afrinvest and IBTC are available for download below:

1. FSDH – NSE Report – July 23rd 2010
2. IBTC – NSE Report – July 23rd 2010
3. Afrinvest Forthnightly NSE Report – July 23rd 2010

1. Moderation in the major monetary aggregates in April 2010
2. General decline in banks’ deposits and lending rates
3. Oil and non-oil receipts were than budgeted
4. Inflation rate was at 12.5% at the end of April 2010
5. Oil receipts accounted for 73.8% of total government receipts
6. Exchange rate was at N149.98 to $1

You can read an excerpt from the summary section below:

Growth  in  major  monetary  aggregates  moderated  in  April 2010  relative  to  the  level  in  the  preceding  month.  Broad money (M 2) contracted by 0.5 per cent, relative to the preceding month. The decline in M 2 was due wholly, to the 3.3 per cent decline in foreign asset (net) of the banking system. Narrow  money  (M1),  however,  increased,  by  1.6  per  cent, over  the  level  in  the  preceding  month. Reserve  money  (RM) contracted  by  16.3  per  cent  from  the  level  at  the  end  of March 2010.

Available data indicated a general decline in banks’ deposit and   lending   rates.   The   spread   between   the   weighted average term deposit and maximum lending rates narrowed marginally,  from  15.94  percentage  points  in  the  preceding month  to  15.77  percentage  points.  The margin  between  the average  savings  deposit  and  maximum  lending  rates  also narrowed  from  19.68  percentage  points  in  March  2010  to 19.54   percentage   points   during  the   review   period.   The weighted  average  inter-bank  call  rate  fell  to  1.27  per  cent from  1.50 per  cent  in  the  preceding  month,  reflecting  the liquidity conditions in the interbank funds market.
 
The value of money market assets outstanding rose by 2.5 per cent  over  the  level  in  March  2010  to  N3,397.1  billion.  The development was attributed to the increase in FGN Bonds. Activities on the Nigerian Stock Exchange (NSE) were bullish as all the major market indicators trended upward during the review month.  Total   federally-collected   revenue   in   April   of   2010   was estimated at N537.74 billion, representing a shortfall of 19.9 per cent from the proportionate monthly budget estimate, but an increase  of  12.3  per  cent  over  the receipts  in  the  preceding month.  At  N396.89  billion,  oil  receipts,  which  constituted  73.8 per  cent  of  the  total,  fell  short  of the  proportionate  monthly budget  estimate  by  18.6  per  cent,  but  rose  by  11.4  per  cent over     the     receipts     in     the    preceding     month.    

The underperformance in oil receipts relative to the proportionate monthly  budget  estimate  resulted  from  the  fall in petroleum profit  tax,  royalties  and  crude  oil  and  gas  export  receipts during the month.  Similarly, non-oil receipts, at N140.85 billion or 26.2 per cent of the total was 23.2 per cent lower than the proportionate budget estimate, but higher than the receipts in the  preceding  month and  the  level  in  the  corresponding period  of  2009,  by  14.8  and  38.8  per  cent,  respectively.  The improved   performance   relative  to   the   preceding   month reflected  largely  the  rise  in  all  the  components  namely, customs  and  excise  duties,  value-added  tax,  and company income  tax  and  other  taxes  as  well  as  “others”.  Federal Government estimated retained revenue for April 2010 was N135.65billion, while total estimated expenditure was N289.99 billion.  Thus,  the  fiscal  operations  of  the  Federal  Government resulted  in an  estimated  deficit  of  N153.29  billion,  compared with  the  budgeted  deficit  of  N126.83  billion  for  the  review month.

The major agricultural activities during the month of April 2010 were clearing and planting operations.  Nigeria’s  crude  oil production, including  condensates  and  natural  gas  liquids, was  estimated  at  2.10  million  barrels  per  day  (mad)  or  63.0 million  barrels  for the month.  Crude  oil  export  was  estimated at  1.65  mbd  or  49.5  million  barrels  for  the  month,  while deliveries to the refineries for domestic consumption remained at  0.45  mbd  or13.5  million  barrels.  The average price of Nigeria’s   reference   crude,   the   Bonny Light   (370   API), estimated at US$85.51 per barrel, rose by 0.6 per cent over the level in the preceding month. 

The  end-period  headline  inflation  rate  (year-on-year),  for  the month of April of 2010, was 12.5 per cent, compared with 11.8 per  cent recorded  at  the  end  of  the  preceding  month. Inflation  rate  on  a  twelve-month  moving  average  basis  for April  2010  was  11.8  per cent,  compared  with  11.9  per  cent recorded in the preceding month.  Foreign  exchange  inflow  and  outflow  through  the  Central Bank  of Nigeria  (CBN)  amounted  to  US$2.02  billion  and US$2.98  billion,  respectively,  resulting  in  a  net  outflow  of US$0.96  billion  during the review  month.  Foreign  exchange sales  by  the  CBN  to  the  authorized  dealers  amounted  to US$2.15 billion in April 2010.
 
The  average  Naira  exchange  rate  vis-à-vis  the  US  dollar, depreciated  by  0.04  per  cent  to  N149.89  per  dollar  at  the WDAS. In the bureaux-de-change segment of the market, the naira also depreciated by 0.1 per cent to N152.00 per dollar, while at the interbank segment it depreciated from N150.08 per US dollar in March 2010 to N150.38 per dollar.  Non-oil   export   earnings   by   Nigerian   exporters   declined sharply,  by  66.2  per  cent,  from  the  level  in  the  preceding month  to  US$112.4  million.  The development was attributed largely to the fall in the prices of all the commodities traded at the international commodities market during the period.  World crude oil output in April 2010 was estimated at 85.87 million barrels per day (mbd), while demand was estimated at 85.16 mbd, compared with the respective levels of 85.65and 85.13 mbd supplied and demanded in the preceding month.

You can download the report in full below:
CBN – April 2010 Economic Report

And here are the reports:

IBTC - Weekly NSE Report - July 16th 2010 (60).

FSDH - Weekly NSE Report - July 16th 2010 (92).

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NSE Monthly Report - March 2010 (259).