Wale Tinubu of Oando

This is Nairametrics Outlook for the week ending October 28th, 2017.

The week from the rear view

  • Last week, Corporate Nigeria was stunned with the news that Nigeria’s leading Oil and Gas company, Oando was suspended from trading on the Nigerian Stock Exchange. The Nigerian Stock Exchange suspended Oando’s shares following an instruction from the Securities and Exchange Commission, SEC. SEC informed investors that its initial investigation had revealed allegations of a Breach of the provisions of the Investments & Securities Act 2007, SEC Code of Corporate Governance for Public Companies, Suspected insider Dealing, Related party transactions not conducted at arm’s length and Discrepancies in the shareholding structure of Oando Plc.
  • On the Macro-economic front, we had forecasted a further drop in inflation rate that would be below the 16% ceiling. The National Bureau of Statistics confirmed this as September inflation rate was 15.98%, while food inflation remained stubbornly high at 20.32%.
  • Nigerians were again shocked on Saturday, when reports confirmed the Federal Government had obtained a court order to freeze bank accounts that are not BVN compliant. The reactions will likely dominate discourse in the coming days.

Outlook for the week

Nigerian Stock Exchange

  • Access Bank and FBN Holdings are expected to dominate headline releases for company results from the financial sector.
  • Other major results expected are that of Nigeria Breweries, Seplat, Guinness, Diamond Bank, Stanbic, Flour Mills, to name a few.
  • On the dividend front, Guinness Nigeria Plc will be paying dividends on the 26th of October 2017.
  • The All Share Index is up 3.2% this month and 36% for the year, however the index slid by 0.71% last week. Despite the fantastic result from Zenith Bank, GT Bank and Dangote Cement, market sentiments did not shift as all 3 stocks failed to appear on the top 10 gainers list.

Macro-economic data

  • The National Bureau of Statistics is scheduled to release data on its monthly FAAC allocations.
  • They are also expected to release data on the power sector, financial sector, payment channel statistics as well as GDP by payment and expenditure for the 3rd and 4th quarter of 2016.
  • None of these are expected to have any significant bearing on markets or the economy.

Government & Regulators

  • We expect to get more clarification on the controversy surrounding the court decisions on BVN.
  • Debates should continue on Nigeria’s debt status as the government continues to defend its planned quest to increase dollar denominated loans
  • Last week, we got wind that the CBN in conjunction with some banks were swapping dollars for Naira denominated T-bills in favour of foreign investors.
  • The Securities & Exchange Commission will likely provide more insights into the current investigation of SEC. We won’t be surprise if the current management of Oando is coerced to recuse itself from ongoing investigations.
  • There are indications that an impending announcement could be made in the power sector. Industry charter suggest, NERC was considering raising tariffs in line with MYTO requirements.

 

That’s it for the week and do have a most profitable week ahead.

 

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.