Stocks to watch this week comprises the top gainers and losers from the prior week as well as companies expected to have corporate actions this week.
Stocks to watch is not a Buy/Sell/Hold list.
Three of Nigeria’s FUGAZ banks, Guaranty Trust Bank, Access Bank and Zenith Bank, once again top the watchlist, due to the impending release of their half year 2019 results. The three lenders also have a tradition of paying interim dividends.
Conoil Plc has a spot in this week’s watchlist, as the company will be holding its Annual General Meeting (AGM) on the 16th of August, 2019.
PZ Cussons Nigeria Plc
PZ Cussons Nigeria has a place in this week’s watchlist, as the company could release its results anytime within the month of August. From precedence, the firm has typically released its full year results in August/September.
Audited 2018 results were released on the 31st of August, 2018. Results for 2017, were released on the 6th of September, 2017. Audited 2016 results were released on the 17th of August, 2016.
Cement Company of Northern Nigeria (CCNN) Plc
Cement Company of Northern Nigeria Plc was the best performing stock last week, appreciating by 13.36% to close at N14, hence its place on this week’s watchlist. Short term traders could decide to take profit in the midst of a bear market.
Continental Reinsurance Plc
Continental Reinsurance Plc was the worst performing stock last week, hence its place on the watchlist. The stock declined by 19.19% to close at N1.33.
The company has been on a free fall since a technical suspension placed on the stock was lifted. The suspension was lifted following a request by the Securities and Exchange Commission (SEC) that a fresh court ordered meeting be reconvened.
Pension Fund Managers dump Nigerian Treasury Bills
Pension fund managers redeemed treasury bills worth N512 million Naira in the two months combined but did not invest any additional kobo into treasury bills within the same period.
Analysis of the recently released summary of Pension Fund Asset data for the first two months of 2020 by the Pension Commission of Nigeria has shown that pension fund managers are no longer in love with Treasury Bills like they used to be in the past.
Time was when fund managers allocated much of their assets to treasury bills, but that seems to be waning as yields on treasury bills head towards subzero.
According to the analysis, pension fund managers redeemed treasury bills worth N512 million in the two months combined but did not invest any additional kobo into treasury bills within the same period.
Prior to this event, the pension fund had invested a combined sum of N1.88 trillion into treasury bills, representing 18.4% of total pension fund assets.
With that development, pension fund managers allocation to treasury bills now stands at 13%. This is about the first time, in over 5 years that PFM’s are shying away from treasury bills.
The love seems to have shifted to bank placements which attracted additional investment if N420 million from pension fund managers. FGN Bonds continue their camaraderie with pension fund managers as they pumped additional N352 million into FGN bonds in January and February, combined. This seeming reallocation to bank placements is indicative of pension fund managers’ desire to hold on to their cash, while waiting and hoping that yields will trend up anytime soon.
Yield Analysis: Fund managers who are out to seek ways to generate positive alpha or returns for their investors are running away because of the low treasury bill yields. The last Treasury Bill option that was conducted on May 13th, 2020, had stop rates of 2.5%, 2.85% and 3.84% for 91-day, 182-day and 364-day treasury bills respectively. Those rates were not enticing enough for the fund managers.
Strong Market Demand: This does not mean that Nigerian Treasury Bills are no longer in demand because, according to the NTB Auction Results sheet of May 13th, 2020, all the three tenors of treasury bills were oversubscribed.
While the 91-day Treasury Bill had N4,384,80,000 on offer, it attracted a total subscription of N22,334,588,000, the 182-day tenor which had N12,920,900,000 on offer saw N41,194,993,000 being subscribed for, while investors bid N102,030,671,000 for the 364-day tenor which had N16,536,720,000 on offer.
Pension Fund Asset Allocation: All said and done, FGN bonds continue to be the asset type with the highest allocation from pension managers. Out of the N10.5 trillion total pension fund asset value as at February, 29th 2020, N5.6 trillion sits with FGN Bonds, while bank placements come second with an allocation of N1.48 trillion leaving Treasury Bills in the third position with an asset allocation of N1.37 trillion.
Infrastructural financing in Nigeria: Why bonds are better than loans
Structuring project financing through the capital markets to ensure that the transactions are bankable, and the costs reflect reality.
If Nigeria is to make up for the infrastructural deficit in the country, the government should consider resorting to bonds rather than loans for infrastructural financing.
Structuring all transactions in a local currency, rather than dollars, would help to drive infrastructural development at a greater speed.
These were some of the suggestions made by Mr. Bolaji Balogun, Chief Executive Officer, Chapel Hill Denham, while speaking on the theme: “Financing Infrastructure Development in Nigeria – Challenges, Opportunities and the Way Forward,” at the virtual Financial System Strategy (FSS) 2020 Pension Sector Second Quarter Forum.
Balogun noted that driving infrastructural development would start by creating an enabling environment and embracing private capital.
“Only if investment in infrastructure grows from 15% to 18% a year, we can reach 8% economic growth,” he said.
He advised that structuring the financing through the capital markets to ensure that the transactions are bankable, and the costs reflect reality.
Balogun noted that the country would experience a boost in financial inclusion, improvement in the balance of trade, long-term macro, and price stability with a well-developed infrastructure.
Other gains of well-developed infrastructure, according to him, are greater production competitiveness, enhanced housing, significant import substitution, and robust pensions.
Mr. Effiok Ekpenyong, Head, Investment Management Department, Securities and Exchange Commission (SEC), in his presentation, stated that the capital market apex regulator has existing regulations and guidelines that would help participants in infrastructure development.
He also called for collaboration among the agencies to remove regulatory bottlenecks and build capacity for the country to achieve expected growth and development.
(READ MORE: Meet Dr. Lamido Yuguda, the new SEC DG)
Crowdfunding for infrastructure
In his presentation, Mr. Chinua Azubuike, Chief Executive Officer, InfraCredit, called for crowdfunding domestic credit and public-private partnerships for infrastructural development.
This was in line with an earlier presentation from Mr. Chidi Izuwah, Director-General, Infrastructure Concession Regulatory Commission (ICRC), who stated that the government alone cannot provide the needed infrastructure for economic growth and development.
READ ALSO: Senate moves to upgrade ibadan Airport
Also speaking at the online forum, Mr. Farouk Aminu, Head, Investment Services Department, National Pension Commission, stressed the need for creating infrastructure instruments that would attract Pension Fund Administrators (PFAs) to the market.
He opined that the diversification of investment products would boost PFAs participation in infrastructure development, thus hastening Nigeria’s infrastructural development.
Covid-19 Update in Nigeria
On the 28th of May 2020, 182 new confirmed cases and 5 deaths were recorded in Nigeria bringing the total confirmed cases recorded in the country to 8,915.
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to rise as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 8,915 confirmed cases.
On the 28th of May 2020, 182 new confirmed cases and 5 deaths were recorded in Nigeria.
To date, 8915 cases have been confirmed, 2592 cases have been discharged and 259 deaths have been recorded in 35 states and the Federal Capital Territory having carried out 49,966 tests.
Covid-19 Case Updates- May 28th 2020
- Total Number of Cases – 8,915
- Total Number Discharged – 2,592
- Total Deaths – 259
- Total Tests Carried out – 49,966
The 182 new cases are reported from 16 states- Lagos (111), FCT (16), Akwa Ibom (10), Oyo (8), Kaduna (6), Delta (6), Rivers (5), Ebonyi (4), Ogun (4), Kano (3), Plateau (2), Gombe (2), Kebbi (1), Kwara (2), Bauchi (1), Borno (1).
The latest numbers bring Lagos state total confirmed cases to 4123, followed by Kano (939), Abuja at 535, Katsina (358), Oyo (260), Borno (258), Ogun (246), Jigawa (241), Edo (240), Bauchi (234), Kaduna (221), Rivers (176), Gombe (154), Sokoto (116), Plateau (99).
Kwara State has recorded 87 cases, Zamfara (76), Nasarawa (62), Delta (57), Yobe (47), Akwa Ibom (45), Osun (44), Ebonyi (40), Adamawa (38), Imo (34), Kebbi (33), Niger (30), Ondo (24), Ekiti (20), Taraba and Enugu (18), Bayelsa (12), Anambra (11), Abia (10), Benue (7), while Kogi state has recorded 2 cases.
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, President Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
|Date||Confirmed case||New cases||Total deaths||New deaths||Total recovery||Active cases||Critical cases|
|May 28, 2020||8915||182||259||5||2592||6064||7|
|May 27, 2020||8733||389||254||5||2501||5978||7|
|May 26, 2020||8344||276||249||16||2385||5710||7|
|May 25, 2020||8068||229||233||7||2311||5524||7|
|May 24, 2020||7839||313||226||5||2263||5360||7|
|May 23, 2020||7526||265||221||0||2174||5131||7|
|May 22, 2020||7261||245||221||10||2007||5033||7|
|May 21, 2020||7016||339||211||11||1907||4898||7|
|May 20, 2020||6677||284||200||8||1840||4637||7|
|May 19, 2020||6401||226||192||1||1734||4475||7|
|May 18, 2020||6175||216||191||9||1644||4340||7|
|May 17, 2020||5959||388||182||6||1594||4183||7|
|May 16, 2020||5621||176||176||5||1472||3973||7|
|May 15, 2020||5445||288||171||3||1320||3954||4|
|May 14, 2020||5162||193||168||3||1180||3815||4|
|May 13, 2020||4971||184||164||6||1070||3737||4|
|May 12, 2020||4787||146||158||6||959||3670||4|
|May 11, 2020||4641||242||152||10||902||3589||4|
|May 10, 2020||4399||248||142||17||778||3479||4|
|May 9, 2020||4151||239||127||11||745||3278||4|
|May 8, 2020||3912||386||118||10||679||3115||4|
|May 7, 2020||3526||381||108||4||601||2818||4|
|May 6, 2020||3145||195||104||5||534||2507||1|
|May 5, 2020||2950||148||99||5||481||2370||4|
|May 4, 2020||2802||245||94||6||417||2291||2|
|May 3, 2020||2558||170||88||2||400||2070||2|
|May 2, 2020||2388||220||86||17||351||1952||2|
|May 1, 2020||2170||238||69||10||351||1751||2|
|April 30, 2020||1932||204||59||7||317||1556||2|
|April 29, 2020||1728||196||52||7||307||1369||2|
|April 28, 2020||1532||195||45||4||255||1232||2|
|April 27, 2020||1337||64||41||0||255||994||2|
|April 26, 2020||1273||91||41||5||239||994||2|
|April 25, 2020||1182||87||36||3||222||925||2|
|April 24, 2020||1095||114||33||1||208||855||2|
|April 23, 2020||981||108||32||3||197||753||2|
|April 22, 2020||873||91||29||3||197||648||2|
|April 21, 2020||782||117||26||3||197||560||2|
|April 20, 2020||665||38||23||1||188||466||2|
|April 19, 2020||627||86||22||2||170||436||2|
|April 18, 2020||541||48||20||2||166||356||2|
|April 17, 2020||493||51||18||4||159||317||2|
|April 16, 2020||442||35||13||1||152||277||2|
|April 15, 2020||407||34||12||1||128||267||2|
|April 14, 2020||373||30||11||1||99||263||2|
|April 13, 2020||343||20||10||0||91||242||2|
|April 12, 2020||323||5||10||0||85||228||2|
|April 11, 2020||318||13||10||3||70||238||2|
|April 10, 2020||305||17||7||0||58||240||2|
|April 9, 2020||288||14||7||1||51||230||2|
|April 8, 2020||274||22||6||0||44||226||2|
|April 7, 2020||254||16||6||1||44||204||2|
|April 6, 2020||238||6||5||0||35||198||2|
|April 5, 2020||232||18||5||1||33||194||2|
|April 4, 2020||214||5||4||0||25||185||0|
|April 3, 2020||209||25||4||2||25||180||0|
|April 2, 2020||184||10||2||0||20||162||0|
|April 1, 2020||174||35||2||0||9||163||0|
|March 31, 2020||139||8||2||0||9||128||0|
|March 30, 2020||131||20||2||1||8||121||0|
|March 29, 2020||111||22||1||0||3||107||0|
|March 28, 2020||89||19||1||0||3||85||0|
|March 27, 2020||70||5||1||0||3||66||0|
|March 26, 2020||65||14||1||0||2||62||0|
|March 25, 2020||51||7||1||0||2||48||0|
|March 24, 2020||44||4||1||0||2||41||0|
|March 23, 2020||40||10||1||1||2||37||0|
|March 22, 2020||30||8||0||0||2||28||0|
|March 21, 2020||22||10||0||0||1||21||0|
|March 20, 2020||12||4||0||0||1||11||0|
|March 19, 2020||8||0||0||0||1||7||0|
|March 18, 2020||8||5||0||0||1||7||0|
|March 17, 2020||3||1||0||0||0||3||0|
|March 16, 2020||2||0||0||0||0||2||0|
|March 15, 2020||2||0||0||0||0||2||0|
|March 14, 2020||2||0||0||0||0||2||0|
|March 13, 2020||2||0||0||0||0||2||0|
|March 12, 2020||2||0||0||0||0||2||0|
|March 11, 2020||2||0||0||0||0||2||0|
|March 10, 2020||2||0||0||0||0||2||0|
|March 9, 2020||2||1||0||0||0||2||0|
|March 8, 2020||1||0||0||0||0||1||0|
|March 7, 2020||1||0||0||0||0||1||0|
|March 6, 2020||1||0||0||0||0||1||0|
|March 5, 2020||1||0||0||0||0||1||0|
|March 4, 2020||1||0||0||0||0||1||0|
|March 3, 2020||1||0||0||0||0||1||0|
|March 2, 2020||1||0||0||0||0||1||0|
|March 1, 2020||1||0||0||0||0||1||0|
|February 29, 2020||1||0||0||0||0||1||0|
|February 28, 2020||1||1||0||0||0||1||0|