BusinessDay 05 Apr 2018

Thursday 05 April 2018
C002D5556
BUSINESS DAY
Investor
Helping you to build wealth & make wise decisions
17
United Capital investment views
In a tussle of bulls and bears
…NSEASI advances 0.1%w/w
Lo cal bourse
snapped previous
weeks’ declines as
the NSEASI added
0.1percent weekon-week
(w/w) to close at
41,504.5points. The trading
days were shortened due to
the holidays and the market
declined all through the week
except on the last trading day,
Thursday. Consequently,
market capitalisation gained
N11.4billion to close at
N15trillion while year-todate
(YtD) return inched to
8.5percent.
Performance across
sector indices was mixed
with a bullish undertone as
3 of the 5 sector indices we
cover advanced w/w. The
Agriculture (+2.8percent)
and Consumer Goods
(+2.6percent) indices
led the gainers’ owing
to gains recorded on
PRESCO (+4.8percent),
NESTLE (+4.8percent),
NB (+2.8percent) and
DANGSUGAR (+3.8percent).
The Industrial Goods
(+1.3percent) index
also trended northwards
consequent on gains
recorded on DANGCEM
(+1.9percent). The Oil & Gas
(-3.9percent) and Financial
Services (-1.6percent) indices
closed in the red as declines
in JAPAULOIL (-14.9percent),
SEPLAT (-7.9percent),
DIAMOND (-13.5percent),
GUARANTY (-4.7percent),
ZENITH (-2.9percent) and
ACCESS (-2.2percent).
Investor sentiment as
measured by market breadth
closed 1.0x, (formerly 0.8x),
breaking out of the bearish
pressure it has endured in
previous weeks, but reflecting
sustained weakness in market
sentiment during the week.
However, activity levels toed
the bearish path as average
volumes traded declined
17.3percent to 385.2mn units
while average value traded
shed 28.1percent to close
at N4.2bn. Expectations
surrounding the much
anticipated MPC meeting
and bargain hunting on
stocks trading at low prices
should determine investors’
sentiment this week.
Money Market: Liquidity
tightening exercises keep
rates afloat
In the holiday-shortened
week to 29th March 2018,
system liquidity was
practically the same as
witnessed in the preceding
week. While no Open Market
Operation (OMO) auction
was carried out all through
the week, FX interventions
by the CBN drove rates
above 40percent on Tuesday.
Nevertheless, inflows from
retail FX refunds, OMO
maturities, and FAAC inflows
helped to calm the tight
liquidity. Overall, rates closed
the week lower; OBB (down
15.1percent to 8.1percent)
and O/N (down 13.7percent
to 7.2percent) w/w. There is
a sizable maturity coming
in next week to the tune
of N528.9bn. Considering
this, we expect to see some
mopping-up activities by
the CBN.
Yields: Absence of OMO
auction fuels buy-side
theme
In the T-bills space,
players traded sentiments
around the dearth of OMO
auctions, as well as inflows
from FAAC disbursements,
OMO maturities, and retail
refunds. Consequently,
average T-bill yield inched
lower by an 9basis points
(bps) to close the week at
14.9percent. (91-day (up
19bps to 14.6percent),
182-day (down 23bps to
14.8percent) and the 364-day
N360.0/$1. However, the
naira appreciated fractionally
in the official market to end at
N305.7/$1 while remaining
flat at N361.0/$1 in the
parallel market. Looking
ahead, the outlook of the
naira is expected to remain
tied to the spate of CBN’s
intervention in the spot and
forward markets as well as
better price discovery in the
I & E FX window.
Global equities halt
bearish trend
Major equity indices
retracted previous week’s
bearish trend in the holidayshortened
week which
closed at 29th, March 2018.
In the US markets, reports
that U.S and China are
conducting behind-thescenes
negotiations eased
trade war fears, consumer
confidence remains at 18-
year high despite decline
in March and month-end
RSA fund price of PFAs as at March 29, 2018
S/N PFAs CURRENT PRICE
1 CrusaderSterling Pensions 3.9060
2 Premium Pensions 3.8286
3 ARM Pension Mgrs. 3.8274
4 Stanbic-IBTC Pensions 3.6717
5 Legacy PFA 3.5360
6 PAL Pensions 3.3510
7 NLPC PFA 3.3429
8 First Guarantee Pension 3.2177
9 Trustfund Pensions 3.1953
10 Leadway Pensure PFA 3.0759
11 SigmaVaughn Pensions 3.0699
12 AIICO Pension Managers 2.9682
13 APT Pensions 2.7649
14 Fidelity Pensions 2.6637
15 AXA Mansard 2.6347
16 FUG Pensions 2.5878
17 OAK Pensions 2.4882
18 Investment One Pension Mgrs. 2.4085
19 IEI Anchor Pension Managers 2.2841
20 Radix Pension 1.9916
21 NPF Pensions 1.4389
(down 24bps to 15.1percent).
Conversely, sentiments
in the bonds space were
bearish as players anticipated
the policy posture from the
upcoming MPC meeting –
in which market consensus
expect the existing state
of affairs to remain. Thus,
average bond yields edged
higher by 18bps to finish
at 13.7percent, driven by
profit-taking across tenors.
Considering the robust
liquidity profile of the week
ahead, we expect sentiments
to be mixed should the Apex
bank continue to mop-up
liquidity. We also expect
traders to trade sentiments
around the MPC meeting
holding on the 2nd and 3rd
of April.
Currency Market: Naira
appreciates across FX
windows
Sentiments across
FX windows we track
were divergent for the
week. In the Investors &
Exporters FX window,
the naira depreciated by
6bps to close the week at
portfolio rebalancing bode
well for equities, as DJIA
(+2.4percent), S&P 500
(+2percent) and NASDAQ
(+1percent) trended
northwards w/w.
In Europe, amid
the Office for National
Statistics’ confirmation
of UK’s 1.4percent
economic expansion in
Q4-17 and Germany’s
adjusted jobless rate
decline to 5.3percent in
March, equity indices
threaded the bullish path.
Accordingly, UK’s FTSE
(+1.9percent), Germany’s
DAX (+1.8percent), France’s
CAC (+1.4percent) and
Pan-European STOXX
(+1.4percent) advanced w/w.
However, emerging
market equity indices
closed the week mixed.
Brazil’s IBOV (+1.2percent),
India’s BSE (+1.1percent)
and China’s SCHOMP
(+0.2percent) advanced w/w
while South Africa’s JALSH
(-1.7percent) and Russia’s
RTSI (-1.1percent) declined
w/w.
Investor’s Square
•Have you been shabbily treated by your registrar,
stockbroke r or other capital market operators?
Let us know and investor will help you investigate and
report back.
E-mail: iheanyi.nwachukwu@businessdayonline.com
Oando shareholders stage
protest to National Assembly
A
group of
aggrieved
shareholders of
Oando Nigeria Plc
last Thursday staged
a peaceful protest to
the National Assembly
requesting that the
management of the
company led by Wale
Tinubu should step
aside.
The protesters,
which consist of
members of Trusted
Shareholders
Association, Proactive
Shareholders
Association of
Nigeria, had among
others expressed fears
that the forensic audit
on the company will
not result to anything
meaningful if the
management of the
company does not
pave way for thorough
investigation.
“The global practice
is that when forensic
audit is being carried
out on a company,
the management of
the company will
step-aside to give
room for thorough
investigation without
any interference”,
according to Mukhtar
Mukhtar, chairman,
Trusted Shareholders
Association.
The forensic audit
of the company
was initiated by
the Securities
and Exchange
Commission (SEC).
The shareholders also
charged the House
Committee to urgently
invite the acting
director-general of
the Securities and
Exchange Commission
(SEC) to ascertain the
authenticity of the
forensic audit setup
to investigate the
company.
In a letter
addressed to the
Speaker of the House
of Representatives
and the Chairman,
House Committee on
Capital Market and
other Institutions,
the associations
demanded that,
“The management
of Oando Nigeria Plc
led by Wale Tinubu
should step aside until
the forensic audit is
released to the public
so as to pave way
for an unhindered
forensic audit.”
“We fear that the
suspension of the
former directorgeneral
of SEC, Munir
Gwarzo is a clear
attempt to frustrate
the forensic audit,’’
according to Oderinde
Taiwo, national
coordinator, Proactive
Shareholders
Association of Nigeria.
Mukhtar said the
shareholder group
was convinced that
SEC, under the acting
DG, Abdul Zubair
is only buying time
by instituting a new
forensic audit.
He expressed anger
that shareholders
of the company are
dying without getting
L-R: Mukhtar Mukhtar, chairman, Trusted Shareholders Association; Taiwo Oderinde, national coordinator
Proactive Shareholders Association of Nigeria; and Nnodu Okeke, legal counsel, Proactive Shareholders
Association of Nigeria during the peaceful protest at the National Assembly gate in Abuja.
returns from their
investments. “Many
of our members
have become victims
of hypertension
watching their
investments tumble
without any hope to
salvage same in sight,”
he said.