Cashcraft Asset Management Limited, Foreshore Towers 2A Osborne Road Ikoyi Lagos, Ikoyi (2026)

04/12/2017

NSE All Share Index Outlook for December, 2017 - Technical Perspective:

The NSE All-Share Index and Market Capitalization appreciated by 1.55% and 1.58% to close the last trading week in November 2017 at 37,944.60 and N13.215 trillion respectively. While the month of November has a 3.45% appreciation in the index and YtD now stands at 41.19% in the green

Trend Analysis
Monthly Trend Analysis of the NSE ASI showed a gradual pick in bullish momentum as the index is currently trending towards key resistance of 38,248 while also trading above Simple Moving Average 100. The index is trading above the SMA 100 which indicates a bullish sentiment

Volume traded in the month was strongly up by 74% relative to previous month of October, 2017.

Daily trend analysis
On the daily timeframe, the index is currently expanding upward as the Price action continues to trend higher.

Why is December 2017 important:
For the past 4 Decembers (2013 - 2016) we witnessed the All Share Index appreciate despite the bearish sentiment seen in those years. Year 2017 s a remarkable one as we have thus far seen a bullish trend in the market with the index at 41% positive.

Technically, the 2017 bullish trend is lilekly to continue into the month of December. A strong rally upward is expected.

Expectations:
The Index is currently trading at critical technical resistance levels at 37,023.5 - 38,097.2.
A break above the resistance level on weekly basis would see a steep rally toward 43,224.70 as such stocks from the Industrial, Consumer Goods and Banking Stocks would be viable for investors. On the other hand, a reversal in trend below support 34,633.5 would see a sell off by the investing community towards next support 31,024.

The month of December 2017 would most likely see a bullish rally in stocks favored by fund managers. Stocks such as NB Plc, NESTLE, Dangote Sugar, GTB, Total Plc, Unilever, Cadbury are expected to remain a toast for investors as technical indicators has signaled

04/12/2017

NSE All Share Index Outlook for December, 2017 - Technical Perspective:

The NSE All-Share Index and Market Capitalization appreciated by 1.55% and 1.58% to close the last trading week in November 2017 at 37,944.60 and N13.215 trillion respectively. While the month of November has a 3.45% appreciation in the index and YtD now stands at 41.19% in the green

Trend Analysis
Monthly Trend Analysis of the NSE ASI showed a gradual pick in bullish momentum as the index is currently trending towards key resistance of 38,248 while also trading above Simple Moving Average 100. The index is trading above the SMA 100 which indicates a bullish sentiment

Volume traded in the month was strongly up by 74% relative to previous month of October, 2017.

Daily trend analysis
On the daily timeframe, the index is currently expanding upward as the Price action continues to trend higher.

Why is December 2017 important:
For the past 4 Decembers (2013 - 2016) we witnessed the All Share Index appreciate despite the bearish sentiment seen in those years. Year 2017 s a remarkable one as we have thus far seen a bullish trend in the market with the index at 41% positive.

Technically, the 2017 bullish trend is lilekly to continue into the month of December. A strong rally upward is expected.

Expectations:
The Index is currently trading at critical technical resistance levels at 37,023.5 - 38,097.2.

A break above the resistance level on weekly basis would see a steep rally toward 43,224.70 as such stocks from the Industrial, Consumer Goods and Banking Stocks would be viable for investors. On the other hand, a reversal in trend below support 34,633.5 would see a sell off by the investing community towards next support 31,024.

The month of December 2017 would most likely see a bullish rally in stocks favored by fund managers. Stocks such as NB Plc, NESTLE, Dangote Sugar, GTB, Total Plc, Unilever, Cadbury are expected to remain a toast for investors as technical indicators has signaled

31/10/2017

Tier1 banks rake in N452 billion from treasury bills and bonds:

The 2017 9M results of Nigeria’s tier one banks, comprising FBN Holdings, UBA, GT Bank, Access and Zenith showed a combined earnings of about N451.8 billion from treasury bills and government bonds, compared to N270 billion earned same period in 2016.

The top 5 banks made a combined N1.4 trillion in interest income for the first 9 months of the year, compared to N1.1 trillion in the same period in 2015. In summary, 33% of bank interest income was from Treasury Bills and Government Bonds compared to 25% in the same period in 2016.

In 2017, Nigerian banks increased purchase of government securities against increasing loans to the private sector. Government securities have offered yields in excess of 18% for the year as government increases reliance on local borrowing to fund the Federal Budget as well as plug its deficit. Government is now considering borrowing in cheaper foreign currency and reducing its more expensive local debts.

FBN Holdings
FBN Holdings reported that it earned N356 billion in interest income in the first 9 months of the year out of which N120 billion was from income in government securities. The bank earned N74 billion in income from government securities the same period last year representing a N50 billion bump. FBN Holdings reported that it had about N850 billion invested in treasury bills and government bonds. About N800 billion alone is in treasury bills. FBNH has about N1.2 trillion investment securities with over N1 trillion in treasury bills and government bonds only.

UBA
UBA reported an interest income of N238 billion for the 9 month period ended September 2017, of which N82 billion was made from interest earned from treasury bills and bonds. A N19 billion increase from the N63 billion it earned the previous year. A total of N47 billion was earned from treasury bills compared to N20 billion a year earlier. About N35.7 billion was earned from government bonds. The bank had about N530 billion invested in treasury bills and another N470 billion in bonds. In total, N1 trillion was invested in government related securities.

GT Bank
Guaranty Trust Bank (GT Bank) made N75.8 billion from interest in investment securities, of the N248 billion it was made in interest income for the 9 months ended September 2017. This compares to the N36 billion earned the same period in 2016. However, investment in government securities made up about 90% of its investment securities portfolio. GT Bank has about N500 billion invested in treasury bills with another N43 billion in government bonds.

Access Bank
Access Bank reported an interest income of N240 billion for the 9 months ended September 2017, of which N57 billion was made from investment securities, compared to the N32.7 billion reported the same period in 2016. Access Bank invested about N75 billion in treasury bills and another N58.5 billion in government bonds.

Zenith Bank
Zenith earned N84 billion as income from treasury bills, and N32 billion as interest on government bonds, of the N361 billion it has earned as interest income so far this year. This contrasts to the N37.3 billion and N38.4 billion earned in Treasury Bills and FGN Bonds respectively in the same period in 2016. The bank also earned another N34 billion in treasury bills trading income making it the top earner from government securities. Zenith Bank also had about N719 billion invested in treasury bills in the period under review, compared to N424 billion same period in 2016.

20/10/2017

NSE extends Suspension of Trading in the Shares of Oando Plc:

In a notice sent to the dealing members (stockbrokers), the NSE hinted an extension of the full suspension placed on Oando Plc’s shares notifying that effective today, Friday, 20 October 2017 and until further directive, the shares of Oando Plc will be placed on technical suspension.

Please be informed that the shares of the Oando Plc are still on full suspension as the process of converting from full to technical suspension is yet to be completed. Further updates will be provided as there are new developments on this matter. The above is for your information and records update please.

The exchange based its action on the non completion of the process of converting the shares from full suspension to technical suspension, and stated it would update dealing members on new developments.

Thank you

18/10/2017

Suspension of Trading in the Shares of Oando Plc:

We have been notified by The Nigerian Stock Exchange of a directive issued by the Securities and Exchange Commission (SEC) on the suspension of trading in the shares of Oando Plc as follows:

Effective for forty-eight (48) hours from today, October 18, 2017 to October 20, 2017, The Exchange should implement a full suspension in the trading of the shares of Oando Plc; and
Effective from October 20, 2017, and until further directive, The Exchange should implement a technical suspension in the shares of Oando Plc.

As a result, within a 48 hour period commencing today, there will be no trading in the shares of Oando Plc. Thereafter, effective October 20, 2017, investors will be able to trade in Oando Plc's shares, but such trading will not result in any movement in the price of the shares.

A full suspension is the halt of trading activities in a listed security for a period.
A technical suspension is the interruption of price movement in a listed security for a period, so that any dealings in the securities which occur during the period of the suspension will not result in any change in price; which could have occurred had the suspension not been implemented.

Thank you.

17/10/2017

UBA nine-month profit soars, sustains strong performance; grows nine months profit by 33% :

United Bank for Africa (UBA) Plc has announced its unaudited third quarter financial results ended September 30, 2017, showing remarkable performance across key financial indicators.
Its PBT appreciated to N78.3bn from N58.8bn recorded in the same period of 2016.
“This impressive performance defies the slow economic recovery in Nigeria as well as some African markets, where the bank operates,” the bank stressed in a statement on Monday.

UBA’s gross earnings grew by 26 per cent to N333.9bn, as against N265.5bn reported in September 2016. The result, was driven by the strong performance of its recurring core revenue lines, thus reflecting the increasing success of the bank’s enhanced customer engagement.
The group’s operating income stood at N236.9bn, compared to N183.3bn recorded in the corresponding period of 2016, representing a 29.3 per cent growth

In the same vein, profit after tax grew to N60.9bn, representing a 23 per cent growth over the N49.5bn recorded in the third quarter of 2016. The profitability, it said, further reflected the strong earnings capacity of the group and its capability to progressively deliver superior returns to shareholders.
While the group closed the third quarter with total assets of N3.77tn, a year-to-date growth of 7.6 per cent, it grew net loans to N1.6tn, a six per cent year-to-date growth in the loan book.
Reflecting a strong capacity for internal capital generation, the group’s shareholders’ fund grew by 13.3 per cent to N507.6bn, while it delivered an annualised 18 per cent return on average equity.

Commenting on the result, the Group Managing Director/Chief Executive Officer of the bank, Kennedy Uzoka, said, “These extremely positive third quarter results are an attestation of our ability to sustainably grow earnings and market share, notwithstanding the challenging operating environment. They are a tribute to our enhanced customer engagement and focus on continuous improvement in service quality.”

He further noted that the bank’s nine-month top-line grew by 26.3 per cent, to an unprecedented N334bn, driven particularly by the strong performance of its recurring core revenue lines.
According to the CEO, “The investment in digital channels is being rewarded, as the market share of digital banking continues to grow and the bank has experienced strong momentum in the trade and remittance businesses, where the monthly run-rate in fee income had doubled, a testament to an increasingly optimistic business and currency environment.”

Also speaking on UBA’s financial performance and position, the Group Chief Financial Officer, Ugo Nwaghodoh, reiterated that the group recorded strong growth across its diversified business segments and geographies.

He said, “Our Africa operations (ex-Nigeria) again grew strongly in the period, contributing a third of top-line and approximately 40 per cent of earnings. As we consistently gain market share in digital banking, remittance and trade flows, we are sustainably growing the non-funded income line, which currently represents 28 per cent of our earnings.”

12/09/2017

Top Picks towards Q3’ 2017 numbers:

Investors displayed improved bargain appetite towards equities as market recorded its first gain in 3 weeks while the ASI posted 1.27% week on week gain.

Last week, Guinness Nigeria Plc (PAT of N1.92bn in FY-17 vs. LAT of N2.02bn in FY-16) and PZ Cussons Nigeria Plc (PAT growth of 73.1% yoy to N3.69bn in FY-17) released their audited FY-17 results. Guinness proposed a dividend per share (DPS) of 64Kobo, indicating 0.7% yield while PZ proposed a DPS of 50Kobo, indicating a 1.9% yield. We currently have HOLD recommendations on Guinness and PZ.

We remain optimistic towards investment in equities while market is expected to be largely driven by mixed sentiments, having considered the impressive GDP growth of 0.55% yoy in Q2-17 and improved inflation figures for august. The macro-economic improvement in Q2-17 was mainly driven by the oil sector (real GDP growth of 1.64% yoy in Q2-17) and the manufacturing sector (real GDP growth of 0.64% yoy in Q2-17). Adding to this feat, the Improved FX supply to traders, small businesses, manufacturers & exporters are believed to be the key factors for real GDP growth in H2-2017E.

Taking these into consideration, we remain bullish towards Q3’17 numbers as we encourage investors to remain buyers of fundamentally sound and viable stocks in the banking, consumer goods, Agriculture and industrial sectors.

Top picks are: Access Bank, Guaranty Trust Bank, United Bank for Africa, Zenith Bank, Stanbic, Dangote Flour, Lafarge Africa, Dangote Sugar, Flour Mills of Nigeria, Okomuoil and Presco.

Thank you

15/08/2017

GUARANTY TRUST BANK PLC PAYS 30 KOBO INTERIM DIVIDEND:

GT BANK PLC declared an interim dividend at the rate of 30kobo per 50 kobo ordinary share, subject to the appropriate withholding tax . Shareholders whose names appear in the Register of Shareholders as at the close of business August 23, 2017 and 17th August 2017 for holders of the Bank’s Global Depository Receipts (GDR) will be qualified for payment.

The payment date will be 5th September 2017 while the Closure date is 24th August 2017.

The holders of the Bank’s GDR listed on the London Stock Exchange will receive their dividend payment subsequently while the Register of GDR holders will be closed on 18th August 2017.

Warm Regards

10/08/2017

Zenith Bank Pays 25kobo Interim Dividend:

Zenith Bank plc, today 10th August 2017 announced the payment of Interim Dividend of 25kobo per 50kobo ordinary share subject to appropriate withholding tax that would be paid to shareholders who are qualified as at 18th Aug 2017.

The Bank’s Register of shareholders will be closed on 21st August 2017 while the payment date for dividend warrants will be posted on the 25th August 2017 to shareholders whose names appear in the Register of members as at 18th August 2017, meanwhile shareholders who have mandated their dividends to their bank accounts will be credited on same date.

Thank you

27/07/2017

RELOCATION OF HEAD OFFICE AND YABA BRANCH:

We wish to notify our esteemed customers that we are relocating our head office from 2A Osborne Road, Ikoyi to our new Head office complex at 270 Murtala Mohammed Way Alagomeji, Yaba, effective Monday 31st July, 2017.

Our Yaba Branch at 14 Hughes Avenue will also be relocated to the new complex. Our services to all our clients will continue unhindered as we settle in.

Thanks for your continued patronage and bear with us for any inconveniences this movement may cause you.

Management

26/07/2017

REFLECTION ON MONETARY POLICY:

Benchmark lending rate retained at 14% amidst falling inflation and uncertainties in the global environment.

Amid the recovering growth and lingering inflationary pressure, the Monetary Policy Committee (MPC) retains all monetary rates. At its fourth meeting of the year, held between 24th and 25thJuly 2017, eight out of twelve members of the MPC in attendance voted unanimously to maintain the status quo:

• Retain Monetary Policy Rate (MPR) at 14%
• Retain Cash Reserve Ratio at 22.5%
• Retain Liquidity Ratio at 30%
• Retain the Asymmetric corridor at +200 and -500 basis points around the MPR.

MPC expresses concerns over the economy The Committee also reviewed the economy in the first half of 2017 and noted key concerns within the context of global economic and financial developments. The following considerations underpin the committee’s decisions:

• The global environment is still holding some upside risks. International Monetary Fund (IMF) World Economic Outlook for July 2017 projects promising economic activities across the regions. The recent development in global scene together with President Trump’s administration thrust will improve manufacturing and international trade that will raise global output. However, protectionism in trade and immigration; fragilities in the financial markets, remain the key risks to global economic stability.

• The commitment of Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC members to oil production cut and the intention to extend the cut till April 2018 will be critical to oil price movement which is expected to hold strong.

• Nigeria’s economy is on a recovery trajectory but aggregate output remains subdued. The committee noted that the Gross Domestic Product (GDP) contracted by 0.52% in the first quarter 2017, indicating the economy is still in recession.

• Strong oil price above US$48 and emerging convergence of Bureau De Change (BDC) and Nigerian Autonomous Foreign Exchange Fixing (NAFEX) have improved government revenue profile as well as the performance of manufacturing and non-manufacturing sectors.

• The Purchasing Managers Index (PMI) for manufacturing and non-manufacturing activities stood at 52.9 and 54.2 index points in May and June 2017, respectively from 52.7 and 52.5 index points in May 2017, indicating an expansion for the third consecutive month.

• Sustained moderation in core inflation continues to drive headline inflation with a drop of 16.1% year-on-year (YoY) in June 2017.

• According to MPC, Nigeria’s benchmark lending rate at 14% is high in an economy where production is subdued but low interest rate is not a standalone growth driver. The MPC noted the widening fiscal deficit of N2.51 trillion in the first half of 2017 and the growing level of government indebtedness and expressed concern about the likely crowding out effect on private sector investment.

Comments on MPC Decision
As risk to production and prices are structural; it’s believed that monetary policy options are really limited to drive aggregate output and general price level at this time. The best monetary option for now is presumed to hold back on rate and gauge domestic economic response to the ongoing fiscal interventions and reforms. An assessment of selected countries in Africa shows that Ghana, Egypt and Angola have higher benchmark interest rates but none of these economies is in recession.
Reducing interest rate may reduce inflow of foreign capital (portfolio investment) and perhaps trigger capital outflow that will erode the recent gains in the capital market. Moreover, inflation will rise and the associated exchange rate risk will be devastating and injurious to the exchange rate strategy of the CBN.

25/07/2017

Stock Market Hits Two-year High, Soars By N218bn

The nation’s bourse recorded its highest return in over two years on Monday, as the Nigerian Stock Exchange market capitalisation appreciated by N218bn in one session.

At the close of trading on Monday, equities’ capitalisation rose to N11.943tn from N11.725tn recorded last Friday, while the NSE All-Share Index closed at 34,652.52 basis points from 34,020.37 basis points.

A total of 293.750 million shares valued at N3.949bn exchanged hands in 3,712 deals.

Monday’s performance was lifted by gains in Dangote Cement Plc as investors piled into the shares in anticipation of the company’s half-year earnings.

Dangote Cement, which accounts for a third of the total market capitalisation, rose by 2.44 per cent to lift the main share index by 1.86 per cent to a level last seen in May 2015.

Traders said investors were expecting strong half-year performances from listed firms as results start pouring in this month.

Overall, the Nigerian equities market recorded 1.86 per cent gain to settle the year-to-date return at 28.94 per cent. The market breadth closed at equilibrium with 20 gainers and 20 losers.

Transnational Corporation of Nigeria Plc emerged as a major gainer, advancing by 8.05 per cent, to close at N1.61 per share.

Dangote Cement Plc, Julius Berger Nigeria Plc, C & I Leasing Plc and Access Bank Plc’s shares soared by five per cent, 4.96 per cent, 4.92 per cent and 4.46 per cent, accordingly.

On the losers’ table was Aiico Insurance Plc, whose stock declined by five per cent to close at N0.57. Vitafoam Nigeria Plc, Unity Bank Plc and Berger Paints Plc also emerged top losers.

“The gain in the equities market could be attributed to the share price appreciation on some market heavyweights, particularly Dangote Cement, which recorded a five per cent advancement,” analysts at Meristem Securities Limited said in a post.

Performance as measured by the sector indices showed that the NSE industry, NSE banking and the NSE oil/gas indices closed positive, advancing by 2.51 per cent, 1.11 per cent and 0.12 per cent, respectively. However, the NSE food/beverage and insurance indices declined by 0.47 per cent and 0.42 per cent, accordingly.

The Nigerian stock market had seen a largely bearish performance after a sharp fall in crude prices from mid-2014, which resulted in foreign investors exiting the country’s financial markets.

The drop in oil prices also pushed the economy into recession, triggered a currency crisis and forced the Central Bank of Nigeria to introduce controls.

In April, the banking regulator partly lifted some restrictions to allow foreign players to bring in their hard currencies at market-determined rates. The move has spurred equities by more than doubling trading volumes.

The Nigerian equities market had attracted N2.715tn investments as of mid-July owing to the foreign exchange window for investors and exporters introduced by the apex bank on April 21 this year.

Stocks have seen a huge rally across board evident in the soaring NSE market capitalisation of listed equities, the All-Share Index, number of deals, as well as volumes traded vis-a-vis their values.

The NSE market capitalisation had appreciated by 31.04 per cent between April 20 (last trading day before the window’s opening) and July 14, from N8.748tn to N11.463tn.

Cashcraft Asset Management Limited

04/12/2017

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