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ISSN 1597 - 8842 Vol. 1 No. 43
The Monthly NCM Report for Jul 10
Issued on Aug 02, 2010
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Contents
Executive Summary 3
Introduction 5
All-Share Index Movement 6
Market Dynamics 9
Comparison of 2009 and 2010 Market Performance 10
Sectoral Index Movements 11
NSE -30 Index, NSE -Food Index, NSE -Banking Index, NSE -Insurance Index & NSE -Oil Index
Sectoral Analysis 15
Transactions Volume and Value Trend 16
Top Ten Trades in the Month 16
Top Ten Traded Sectors in the Month 16
Top Ten Gainers in the Month 18
Top Ten Year to Date Appreciation 18
Top Ten Decliners in the Month 19
Top Ten Year to Date Depreciation 19
Supplementary Listing in the Month 19
Corporate Declarations in the Month 20
Forecast Results in the Month 25
Dividends Declared 25
Sectoral Analysis 26
Outlook/ Analyst Opinion 33
Time Lines (April Market News/Information) 34
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The Monthly NCM Report for July 2010
ISSN 1597 - 8842 Vol. 1 No. 43
Executive Summary
"Progress is impossible without change and those who cannot change their minds cannot
change anything." - George Bernard
Equity market in the month under review has performed in line with general expectationof both the investing public and analysts as the fortunes of equities that ended on thedownside in the month of June showcase the reverse in July.
Trends in the month showed that, for the first thirteen trading days into the month(between 1st and 19th July, 2010), bulls and bears were striving for the control of themarket. It was observed that the bears consequently gained upper hand in the period itlasted.
The dominance of bears in the period was not unconnected with the spill over effect of
the preceding three months below average performance. Uncertainties surrounding thesuccessful takeoff of Asset Management Company of Nigeria (AMCON) in the period alsocontributed to the volatility and consequently, dominance of bearish trend.
Also, the statement credited to the Central Bank of Nigeria (CBN) that banks in thecountry are not yet in safe territory despite their flight to profitability in their respectivefirst quarter results to March 31st, 2010. This created a run on most of the banking
stocks, most especially the rescued banks, hence the dominance of bears since stocks inbanking sector accounted for more than 50% of the entire market capitalisation.
Towards the latter part of the week, the market outlook improved drastically and the
upbeat has been sustained from Tuesday 20th July, 2010. The positive outlook recorded
was on the back of eventually asset to the Asset Management Company bills by thePresident. The impact of the development has been felt most prominently in the bankingstocks and also in all the other sectors on the bourse.
The market pattern in the last three trading days of the month showed evidence of profittakings by the investors, who has since besieged the market from Wednesday 28 th July,
2010 to rake in profit from the previous rally. The sell pressures on the bourseconsequently climaxed in negative outlook at the close of the last trading day of themonth with -0.24% decline.
The trend could be pointing to the fact that, despite the positive development notedabove; investors mindsets are still not towards medium to long term basis but still at
the speculative mood. This kind of trend may still persist for sometimes as part of thestages towards eventual market stability.
As noted in our half year report to June 30th,2010(http://www.proshareng.com/reports/2753), the second quarter results ofcompanies flooded the market in the month of July. The outlook of banking sectorsecond quarter results showed a level of relative stability as most of them built on theflight to profitability recorded in their first quarter results for the period ended 31 stMarch, 2010. The next month should indicate how Q3 will go as policy decisions become
manifest, and the direction for the market going forward set on track.
Thank you for reading and do take time to share with us your thoughts on the market,
analyst at [email protected]. We value your feedback and comments.
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Introduction
NSE all share index rises on the back of Asset Management Company.The market trend in the month of July was bearish in the early part of the month with
bears taking hold of the market for the first thirteen trading days of the month between
1st and 19th of the month; the incessant interchange of bulls and bears closed with bearson the higher side.
The dominant of bears in the period could be attributed to the spill over effect of the
bears run of the preceding month, coupled with the state of uncertainties pervading the
Asset Management Company issues. The indications that AMC might not come on stream
as expected cast doubt on the market, and the immediate reaction was the incidence of
speculative trading.
However, afterwards, with the Asset Management Company signed into law by the
President, market reacted immediately on a positive note with many equities recording
price uptrend of different magnitude. The positive outlook has since remained and thishas pushed the performance in the month to positive territory.
The fact that stocks across all the sectors had shed considerable price weight aided the
positive reactions as discerning investors seemed post optimistic stance and bids for
stocks has since remained strong.
The profit taking activities that resumed on Wednesday 28th July, 2010 was not
unexpected, it should be seen as part of the stages of further recovery to stability. The
sell pressures witnessed at the tail end of the month is not expected to drag into bearish
mode as trend in some sectors such as Food and a beverage is pointing in that direction.
The Market Game On
The market this month recorded a total of 7.638bn units valued at N58.784bn
(US$392.679bn) exchanged in 134.213 deals compared with 9.921bn units valued
at N72.384bn(US$483.527mn) exchanged in 4187.748 deals in the previous years
comparable period. Comparing, the volume and value traded in the month reveals a -
23% and -18.79% decline below the volume and value recorded in the previous years
comparable period respectively.
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In the course of the month, the All-Share index recorded a +2.82% performance
compared with -7.09% negative growth recorded in the preceding years July to close at
25,286.61. The ASI trend this month when compared with the previous comparable
period July 31st, 2009 showed that July 2010 outperformed the previous year. It also
showed a level of recovery as against the negative performance by -3.23% recorded in
the month of June 2010. Market capitalisation this month appreciated by +N206.828
billion (US$1.382bn) as against N410.665 billion (US$ 2.743bn) market
capitalisation loss recorded in the previous years comparable period.
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The Market Game Changers: The outcomes/consequence recorded in the month
could be principally attributed to the issues outlined above and to some of the following
market and financial fundamentals:
The sustained political stability in the country which has made the economic and
business environment friendlier.
Planned elections (with a possibility of an early election timeframe) and the expected
beneficial impact on the NCM.
The sustained regulatory co-ordination and commitment to transparent market which
seems to have tamed the incidence of infractions very significantly.
The news by the Central Bank of Nigeria that banks are not yet in a safe territory
created a run on the banking stocks before AMC positive development climaxed to
reality.
The fact that liquidity in the system remains insufficient to support the market
capacity still creates impact. This is due dearth of loan-able funds from the banking
sector.
Corporate declarations announced by some companies good with relative positives.
The management of the leadership issues at both the Nigerian Stock Exchange onsuccession plan.
The second quarter results released so far in the banking sector must have raised the
hope of better returns in the sector, coupled with the fact that many of them might
not have many issues with the non-performing loans saga.
The recent CBN stand in resorting to dialogue in dealing with recapitalisation of the
rescued banks also raised the morale of the investing public in the sector. If the
positive development continues, there may be swelling times ahead.
Guaranteeing the domestic interbank market
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push of the general market performance, and the banking sector outlook in particular.
Although AMCON has led to an increase in the demand for shares and appreciation in
market indices in the last few days of the month, investors should be reminded that the
company is not the total cure for the market challenges and ailments
(http://proshareng.com/blog/?p=383).
Advantages of AMCON
Free up the balance sheet of these rescued banks
Injection of liquidity into the system
Bolster the prospects for long term growth
Toxic assets had been written off the books of the banks, so once they are bought
by AMCON, there will be some capital.
More recovery of the bad loans of the banks and pressure on debtors to pay
Recapitalization of banks in which the Central Bank of Nigeria (CBN) was forced
to intervene and help to increase access to restructuring/refinancing opportunities
for borrowers
Assist banks in efficient management and disposal of their toxic assets.
AMCON buying the toxic assets of the banks and pumping money into the
institutions, their books will improve and attract investors
Reduce the volume of stocks supplied to the market
Disadvantages of AMCON
AMCON represents one of the solutions to address the economic condition in
which the market is operating and not the solution.
The long drawn out delay in executing the AMCON does not suggest to some that
the regulators and managers of the economy get it.
It may lead to another asset buddle at the nations capital market, owing to hugeinterest of foreign investors to invest in the country.
Threat of inflation from the budget deficit and the operations of the proposed
AMCON.
Transparent pricing of toxic assets.
Ensuring the political/election campaign does not affect its workability.
Conditions for issuing the proposed $5 billion 7-year government guaranteed
bonds
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technical and legal issues
Establishing a fair market price for the impaired assets
Establishment of sinking fund provision is has been proposed to deal with this
issue, but it is not clear whether this sinking fund will be established and with
what money
The upcoming 2011 election may also create a turbulent atmosphere inimical to
the proper sober functioning of the AMCON
Commencement date chosen for AMCON to begin operation is not yet disclosed.
Negative Net Worth of troubled banks will attract most of the AMCON funds
Market Concerns: There are serious concerns with the regulatory bodies as the recent
extension of the deadline given to Wema Bank Plc and Unity Bank Plc on the last day of
deadline showed that the CBN did not have a clear programme for its reform. SEC on the
extension of the deadline given to the Nigerian Stock Exchange to appoint a new
Director-General. Removal of some of the restrictions by CBN it imposed on the credit
operations of banks by amending relevant portions of the Prudential Guidelines that
became effective May 1, this year. AMC was supposed to ensure the smooth take-off on
July 26, 2010 but still no details have been found.
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The NSE All-Share Index Movement
The Nigerian equities started the month with a negative note amid lingering
uncertainties especially from the financial sector as S&P has said the Central Bank of
Nigeria (CBN) may need to guarantee the acquisition of the rescued banks to be able to
win the confidence of investors and rated Nigerian banks as high investment risk and
Postponement of Asset Management Company by the Central Bank of Nigeria also
attributed to the ongoing downturn.
Trends in the month showed that, for the first thirteen trading days into the month(between 1st and 19th July, 2010), bulls and bears were striving for the control of themarket.
The Nigerian Stock market has remained positive for continues last 9 trading days of themonth as buying pressure continued to dominate trading activities after a lacklusterperformance that trailed the passage of the Asset Management Company of Nigeria
(AMCON) Bill and the positive earnings declared by most of the banks for period endingQ2, 2010.
The NSE index in July 2010 ended on a positive note drawing from the upbeat recorded
at the end of the last trading days of the month ( barring last trading day) ensuring thatJuly 2010 ended with a +2.82%appreciation to close at 25,844.18 compared with -7.09%
depreciations recorded in the preceding year comparable period to close at 25,286.61.
The appreciation in the month was far below the +12.97% and +8.43% recorded in the
month of March and January 2010.
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Meanwhile, at the end of the last trading day of the month under review, All-Share Indexclosed above the figure recorded at the close of 31 July 2009 by +2.21%.
At the end of the last trading day of the month, All-Share Index closed above the figure
recorded at the close of 4th January 2010 by 24.02% which was -19.36% away from
January 2nd 2009 to 31st July, 2009. This shows by how much the market has recovered
in the year.
Source: NSE, Proshare Research
At the close of the last trading day of the month, All-Share Index traded above its 20days, 50 days and 200 days moving average which closed at 25,123.97, 25,462.09 and
23,928.08 respectively. This trend is technically suggesting a bullish trend.
Source: NSE, Proshare Research
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July 2010 Market Dynamics
The market dynamics as graphically illustrated below showed the appreciation and
depreciations on the daily basis.
Assurances of improved regulatory environment, passage of AMC Bill, declaration ofCorporate results, Uncertainty regarding the ownership of the ailing institutions and its
recapitalization plans, profit taking , low investor confidence were responsible for the
dynamics recorded.
Source: NSE, Proshare Research
MARKET DYNAMICS IN THE PRECEDING YEAR COMPARABLE PERIOD (JULY,2009)
Source: NSE, Proshare Research
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Comparison of 2009 and 2010 Market Performance
The market performance in July 2010, when compared with the 2009 comparableperiod; showed a upward trend. In the period under review, ASI recorded 2.82%
appreciation compared with -7.09% depreciations recorded in 2009 July. The scenario
revealed that the appreciations in the current years comparable period were above the
previous year trend but the market closed at approximately in the range of 25,000.
Source: NSE, Proshare Research
Dates NSE ASIMarket Capitalisation
(trillion)Market Capitalisation ($
billions)
Jan-02-09 31,357.24 6.93 43.31
Jul-01-09 27,217.59 6.2 38.75
Jul-31-09 25,286.61 5.79 36.19
Yearly Return -19.36% -16.45% -16.45%
Monthly Return -7.09% -6.61% -6.61%
Jan-04-10 20,838.90 4.99 33.27
Jul-01-10 25,134.63 6.12 40.53
Jul-30-10 25,844.18 6.32 41.85
Yearly Return 24.02% 26.65% 25.81%
Monthly Return 2.82% 3.27% 3.27%
Source: NSE, Proshare Research
From the table above, the year to date performance of the year 2009 as at 31 st July,
2009 closing at-19.36%
indicated a depressing outlook when compared with the positive
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year to date performance for the year 2010 as at 30th July, 2010 standing in the positiveperformance growth of+24.02% for the period under review.
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Sectoral Index Movements
Date
NSE-30%Change
Food andBeverages %change
Banking %Change
Insurance %Change
Oil and Gas% Change
01/07/2010 -1.02 -0.954 -1.63 -0.84 -0.25102/07/2010 0.41 1.528 0.04 -1.77 -0.051
06/07/2010 -0.32 -0.226 -0.16 1.98 -0.511
07/07/2010 -0.32 -0.248 -0.52 1.84 0.000
08/07/2010 -1.24 -2.239 -1.88 -0.50 0.000
09/07/2010 -2.34 -4.525 -3.60 0.62 -0.907
12/07/2010 0.32 -0.020 0.28 -0.08 -0.876
13/07/2010 0.91 -0.122 1.57 -1.69 -0.032
14/07/2010 -0.51 -0.679 -0.75 -1.24 -0.505
15/07/2010 -0.06 -0.413 -0.67 1.28 -0.528
16/07/2010 0.32 0.695 0.80 1.90 -1.414
19/07/2010 -0.16 0.157 -0.74 -1.36 0.000
20/07/2010 0.01 0.401 -1.00 0.09 -0.515
21/07/2010 0.60 1.612 0.97 0.39 0.000
22/07/2010 0.19 -0.214 0.43 -0.65 -0.895
23/07/2010 0.74 0.244 2.55 0.49 -0.049
26/07/2010 0.89 0.508 1.93 0.17 -0.645
27/07/2010 1.38 0.910 1.17 0.62 -0.420
28/07/2010 0.22 -0.666 0.47 -0.25 -0.005
29/07/1930 0.22 2.288 -1.44 3.25 -1.25130/07/2010 -0.01 -0.442 -0.37 0.04 -0.747
Monthly %
Change 0.24 -2.41 -2.54 4.27 -9.60
In the month under review, NSE-30 and Insurance index emerged the best performing
sector with +3.13% and +1.68% appreciation respectively, followed by Banking index
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which appreciated by +1.48% and NSE-Food index followed with +1.10% appreciation.
However, the declining trend recorded in Oil and Petroleum sectors stood at -8.47%.
June and July Sectoral Indexes Compared
Source: NSE, Proshare Research
When compared with June trend of sectoral indexes, the performance in the month of
July was above the preceding months trend in all other sectoral indexes with the
exception of Oil & Gas index which underperformed the preceding month very
considerably.
NSE-30INDEX
Source: NSE, Proshare Research
By the committees action, the shares of Cadbury Nigeria Plc and Ecobank Nigeria Plc,
were replaced with the shares of Julius Berger Nigeria Plc and Mobil Oil Nigeria Plc.
The trend recorded in the blue chips stocks is reflected in the index movement. There
were interruptions at the many points in the index performance in the month due to the
volatility that pervaded the entire market in the period, mainly in the early part of the
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month before the positive development in AMC. The sector would most probably have
repeated the negative performance of the preceding month but for the positive
developments in the market. The index recorded appreciation by +3.13% as against -
2.97% depreciations recorded in the month of June.
NSE-FOOD INDEX
Source: NSE, Proshare Research
Shares of Tantalizers Plc were admitted while that of Northern Nigeria Flour Mills Plc was
removed to rebalance the sub-sectors index.
The stocks in the sector still closed on a positive note in the month to record +1.10%
compared with -2.54% recorded in the month of June. This is against appreciations by
+39.09% recorded in the first three months of the year. Trend in the sector towards
the close of the month suggested positive trend in the days ahead as stocks in the sector
have potentials for impressive returns .Performance trail of the sector showed that the
sector recorded +18.43% appreciation in the month of March alone compared with
+13.20% and +3.75% appreciation recorded in January and February respectively.
NSE-BANKING INDEX
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Source: NSE, Proshare Research
Under NSE Banking Index shares of Fidelity Bank Plc and Skye Bank Plc were replaced
tby hat of Union Bank of Nigeria Plc, and Ecobank Nigeria Plc.
NSE-Banking index closed the month of July with +1.48% appreciations compared with -
3.48% depreciations recorded in June. The performance growth was against +10.30%,
+1.76% and +18.34% appreciations recorded in the months of January, February and
March respectively. The trend recorded could be attributed to atmosphere of uncertainty
that pervaded the sector before AMC bills eventually became a reality. Enthusiasm about
the impact of the AMC plan for the banks might have also raised the investorsenthusiasm about the stocks in the sector in the latter parts of the month.
We don't see any of the rescued banks delivering good between now and the third
quarter as the results have failed to lift market sentiment and the share capital is stillnegative as we do not see growth in lending and increase in deposits but non-performingloans that were provisioned for earlier by the banks later re-paid to the banks werewritten back into the books as profit, interest rates at inter-bank market have dropped,while yield on bonds where the banks fled to as safe haven is not promising either.
NSE-INSURANCE INDEX
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Source: NSE, Proshare Research
The shares of International Energy Insurance Plc, Mutual Benefits Assurance Plc,
Standard Alliance Insurance Plc, AIICO Insurance Plc, Cornerstone Insurance Plc, Equity
Assurance Plc, and Goldlink Insurance Plc were admitted, while that of Unity Kapital
Assurance Plc, Prestige Assurance Plc, Staco Insurance Plc, African Alliance Insurance
Plc, Investment and Allied Insurance Plc, Oasis Insurance Plc, and Universal Insurance
Plc were removed from the NSE Insurance.
Insurance sector posted +1.68% appreciations in the month of July as against -6.15%
decline recorded in the previous month. This could be attributed to the fact that stocks in
the sector are subject to high rate of volatility as dearth of impressive returns remains
the main discouragement to investors. The pattern may not change in the coming days.
NSE-OIL INDEX
Source: NSE, Proshare Research
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The sector recorded -8.47% performance declines in the months of July compared with
-2.13% decline recorded in June. Trend in the sector posted the highest decline in the
month among the NSE sectoral indexes, as there was a massive bear run in the sector
during the period under review. Considering the massive rate of decline recorded so far,
there may be reverse in the coming days as investors may want to cash in on the low
prices.
LAST TRADING DAY -SNAPSHOT
http://www.proshareng.com/investors/theAnalyst.php
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SECTORAL ANALYSIS
SECTOR PREFORMANCE
Sector YTD%Change
HOTEL & TOURISM 54.22%
FOOD/BEVERAGES & TOBACCO 40.94%
BREWERIES 35.54%
BUILDING MATERIALS 26.50%
CONSTRUCTION 24.14%
HEALTHCARE 23.04%
MARITIME 22.88%
AIRLINE SERVICES 18.35%
PETROLEUM(MARKETING) 18.21%CONGLOMERATES 11.95%
ENGINEERING TECHNOLOGY 10.17%
CHEMICAL & PAINTS 9.16%
BANKING 8.69%
PRINTING & PUBLISHING 7.86%
THE FOREIGN LISTINGS 6.67%
COMMERCIAL/SERVICES 4.14%
LEASING 3.02%
REAL ESTATE 2.97%
PACKAGING 0.68%
AVIATION 0.00%
AGRICULTURE -0.89%
INFORMATION & COMMUNICATION
TECHNOLOGY-3.85%
SECOND-TIER SECURITIES -7.15%
ROAD TRANSPORTATION -8.22%
INSURANCE -9.25%
COMPUTER & OFFICE EQUIPMENT -9.76%
OTHER FINANCIAL INSTITUTIONS -11.72%
MEDIA -13.28%
MORTGAGE COMPANIES -13.74%
FOOTWEAR -14.08%
INDUSTRIAL/DOMESTIC PRODUCTS -18.50%
AUTOMOBILE & TYRE -30.57%
TEXTILES -43.68%
Source: NSE, Proshare Research
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Transactions Volume and Value Trend
Market July '09' July '10' % Change
Average Daily Volume of Stocks Traded (in millions) 431.34 347.18 -19.51%
Average Daily Value of Stocks Traded (in N'millions) 3,147.13 2,672.13 -15.09%
Average Daily Value of Stocks Traded (in USD$ millions) 19.67 17.70 -10.03%
Total Volume of Stocks Traded (in millions) 9921.02 7638.05 -23.01%
Total Value of Stocks Traded (in N'millions) 72,384.09 58,786.94 -18.78%
Total Value of Stocks Traded (in USD$ billion) 452.40 389.32 -13.94%
New Listing and Delisting July '09' July '10'
Number of Equities Delisted 1 0
Number of New Listings 3 0
Source: NSE, Proshare Research
The transaction volume in the month of July when compared with the preceding year
comparable period closed lower by -23.01% to close at 7.63 billion units compared
with 9.92 billion units traded in July 2009. This could be an indication that the
investors patronage of the market in the month under review was significantly different.
Also, the transaction value in the month under review closed lower by -18.78% at
N58.78 billion ($389.32 million) compared with N72.38 billion ($452.40 million)
of July 2009.
July 2010 vs. 2009 Daily Volume Chart
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Source: NSE, Proshare Research
Top Ten Trades for the Month of July 2010
Zenith Bank Plc topped the transaction volume for the month. Banking stocks generally
dominated the charts with eight of the stocks in the sector emerging in the top ten
trades chart for the month.
Company Total Trades Total Volume Total Value
ZENITHBANK8437 456,503,373.00 5,970,956,270.81
TRANSCORP 790 454,735,532.00 227,374,538.00
SKYEBANK 3019 434,291,159.00 3,072,342,488.24
FIRSTBANK 16476 424,521,645.00 5,624,195,394.88
GUARANTY 11012 370,934,545.00 6,273,365,008.92
DIAMONDBNK 1772 355,824,863.00 2,626,332,625.91
UBA 6015 299,892,893.00 3,109,690,590.35
NIGERINS 233 292,486,329.00 316,262,591.82
FIRSTINLND 1562 255,676,965.00 136,211,718.29
UBN 3648 251,286,123.00 1,288,008,423.10
Grand Total 134213 7,637,990,081.00 58,784,142,060.02
Recall Top Ten Trades for the Month of July 2009
Company Total Trades Total Volume Total Value
ZENITHBANK 7,878.00 737,929,184.00 9,418,426,706.14
FIRSTBANK 31,611.00 664,594,875.00 12,451,567,446.25
GOLDINSURE 467.00 512,217,330.00 258,570,094.24
GUARANTY 11,190.00 473,984,638.00 6,612,120,027.79
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ACCESS 5,759.00 455,194,932.00 3,096,514,040.41
UBA 8,218.00 421,240,035.00 5,297,029,099.83
FIRSTINLND 1,619.00 336,174,653.00 703,161,667.52
DIAMONDBNK 3,014.00 320,426,681.00 2,296,133,534.11
AIICO 10,809.00 316,979,260.00 325,525,643.80
SKYEBANK 5,252.00 301,914,411.00 1,875,212,154.59
Top Ten Traded Sectors for the Month of July
SectorTotal
TradesTotal Volume Total Value
%Contribution
BANKING 72,858.00
4,220,352,269.0
0 32,882,327,122.20
55.25%
INSURANCE 6,165.00
1,004,118,449.0
0 1,050,804,494.65
13.15%
CONGLOMERATES 5,732.00 570,929,355.00 3,787,327,018.917.47%
FOOD/BEVERAGES &
TOBACCO 13,859.00 267,717,514.00 6,773,125,613.313.51%
HOTEL & TOURISM 346.00 242,390,283.00 1,088,549,363.033.17%
SECOND-TIER
SECURITIES 57.00 212,702,951.00 106,660,185.502.78%
INFORMATION &
COMMUNICATIONTECHNOLOGY 1,243.00 211,142,141.00 228,103,889.82
2.76%
CONSTRUCTION 1,260.00 132,457,777.00 349,267,317.281.73%
MORTGAGE
COMPANIES 797.00 110,821,195.00 61,351,178.831.45%
PETROLEUM(MARKETI
NG) 6,400.00 77,026,997.00 4,166,178,266.24
1.01%
Grand Total 134,213.00
7,637,990,081.0
0 58,784,142,060.02
Source: NSE, Proshare Research
Top Ten Gainers in the Month
COMPANY1-Jul-
1030-Jul-
10Change
%Change
INTERCONT 1.53 2.25 0.72 47.06%
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NIGERINS 0.83 1.15 0.32 38.55%
OCEANIC 1.61 1.97 0.36 22.36%
NBC 30 35.87 5.87 19.57%
UNHOMES 0.62 0.74 0.12 19.35%
CONTINSURE 1.1 1.3 0.2 18.18%
FTNCOCOA 0.67 0.79 0.12 17.91%
FIRSTINLND 0.5 0.58 0.08 16.00%
UBN 4.9 5.63 0.73 14.90%
UPL 6.72 7.65 0.93 13.84%
Source: NSE, Proshare Research
Top Ten Year to Date Appreciation
COMPANY4-Jan-
10
30-Jul-
10Change
%Change
INTBREW 2.27 6.99 4.72 207.93%CADBURY 10.49 29 18.51 176.45%JBERGER 25.79 55.01 29.22 113.30%CAPHOTEL 1.38 2.92 1.54 111.59%FLOURMILL 36.2 75 38.8 107.18%BERGER 3.2 6.52 3.32 103.75%DANGFLOUR 10.42 20.7 10.28 98.66%STERLNBANK 1.26 2.16 0.9 71.43%CONOIL 27.63 47.03 19.4 70.21%BAGCO 1.52 2.58 1.06 69.74%
Source: NSE, Proshare Research
Top Ten Decliners in the month
COMPANY
1-Jul-10
30-Jul-10 Change
%Change
AP 36.58 27.08 -9.5 -25.97%WAPIC 0.82 0.61 -0.21 -25.61%DAARCOMM 0.79 0.6 -0.19 -24.05%OKOMUOIL 14.28 11.2 -3.08 -21.57%
UTC 1.32 1.04 -0.28 -21.21%ABCTRANS 0.85 0.67 -0.18 -21.18%CORNERST 0.63 0.5 -0.13 -20.63%REDSTAREX 3.93 3.17 -0.76 -19.34%LIVESTOCK 0.73 0.6 -0.13 -17.81%UNTL 1.29 1.07 -0.22 -17.05%
Top Ten Year to Date Depreciation
COMPANY
4-Jan- 30-Jul- Change %
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10 10 Change
UNITYKAP 2.38
0.5-1.88
-
78.99%ALUMACO
27.71 8.15 -19.56
-
70.59%
BECOPETRO 2.530.8 -1.73
-68.38%
OASISINS
1.49 0.51 -0.98
-
65.77%CRUSADER 1.5
0.53 -0.97
-
64.67%STACO 1.19
0.5 -0.69
-
57.98%ECOBANK 10.1
4.6 -5.5
-
54.46%INCAR 4.12
1.97 -2.15
-
52.18%
UNIC 1.150.56 -0.59
-51.30%
OKOMUOIL 22.75
11.2 -11.55
-
50.77%
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Corporate Declarations in the Month
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Forecast Results in the Month
DECLARED FORECASTS FOR JULY
Company Year End PeriodGross Earnings in
N' billionPAT in N'
billion
Beco Petroleum Plc December Q3 2010 1.020 0.75
Presco Plc December Q3 2010 4.3 0.703
Alumaco Plc December Q3 2010 0.32 0.13
RT Briscoe Plc December Q3 2010 0.9 0.107
Seven-Up Bottling Company Plc December Q3 2010 9.469 0.351
FCMB December Q3 2010 17.557 3.011
Afromedia Plc September Q4 2010 3.593 0.82
John Holt Plc December Q3 2010 0.187 -0.8
John Holt Plc December Year End 3.2 -0.25
Japaul Oil & Maritime Services Plc December Q3 2010 5.265 1.204Access Bank Plc December Q3 2010 22.569 2.318
Juli Plc December Q3 2010 0.71 -0.3
Fidson Healthcare Plc December Q3 2010 1.081 0.88
Dividends Declared
DIVIDENDS DECLARED FOR JULY
Company DividendDeclared BonusDeclared AGM Date
Price
AdjustmentDate
Red Star Express Plc30k
24th Aug,2010
10th - 13thAug, 2010
Flour Mills Nigeria PlcN2.00 1 for 10
20th Oct,2010
13th - 17thSept, 2010
Nigerian BagManufacturing CompanyPlc
13k19th Oct,2010
13th - 17thSept, 2010
Law Union & RockInsurance Plc
3k Nil Nil
Resort Savings & Loans Plc0.01k
5th August,2010
Unity Kapital Assurance Plc1 for 19 23rd Aug,
20109th - 10thAug, 2010
NAHCO Aviance Plc 25k (interim) Nil Nil
PZ Cussons Nig Plc
86KSeptember9th, 2010
23rd - 27thAugust,2010
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Sectoral Analysis
SECTOR ANALYSIS
Symbol30-Jul
Symbol4-Jan YTD
YTD%
Price Price Change Change
AGRICULTURE
AFPRINT 0.86 AFPRINT 0.86 0 0.0%
ELLAHLAKES 4.26 ELLAHLAKES 4.26 0 0.0%
FTNCOCOA 0.79 FTNCOCOA 0.54 0.25 46.3%
LIVESTOCK 0.6 LIVESTOCK 0.59 0.01 1.7%
OKITIPUPA 6.21 OKITIPUPA 6.53 -0.32 -4.9%
OKOMUOIL 11.2 OKOMUOIL 22.75 -11.55 -50.8%
Presco 5.68 Presco 5.6 0.08 1.4%
Average -0.9%AIRLINE SERVICES
AIRSERVICE 2.46 AIRSERVICE 2.65 -0.19 -7%
NAHCO 10.33 NAHCO 7.18 3.15 44%
Average 18.4%
AUTOMOBILE & TYRE
DUNLOP 0.5 DUNLOP 0.5 0 0%
INCAR 1.97 INCAR 4.12 -2.15 -52%
RTBRISCOE 3.72 RTBRISCOE 6.15 -2.43 -40%
Average -30.6%
AVIATIONALBARKAIR 0.58 ALBARKAIR 0.58 0 0%
Average 0.0%
BANKING
ACCESS 9.09 ACCESS 7.55 1.54 20%
AFRIBANK 2.08 AFRIBANK 2.43 -0.35 -14%
DIAMONDBNK 7.51 DIAMONDBNK 7.19 0.32 4%
ECOBANK 4.6 ECOBANK 10.1 -5.5 -54%
FIDELITYBK 2.53 FIDELITYBK 2.52 0.01 0%
FIRSTBANK 13.4 FIRSTBANK 14 -0.6 -4%
FCMB 7.89 FCMB 7.01 0.88 13%
FIRSTINLND 0.58 FIRSTINLND 0.55 0.03 5%
GUARANTY 16.8 GUARANTY 15.78 1.02 6%
INTERCONT 2.25 INTERCONT 1.69 0.56 33%
OCEANIC 1.97 OCEANIC 1.77 0.2 11%
PLATINUM 1.49 PLATINUM 1.38 0.11 8%
SKYEBANK 7.3 SKYEBANK 5.48 1.82 33%
SPRINGBANK 0.66 SPRINGBANK 0.73 -0.07 -10%
IBTC 9.1 IBTC 7.16 1.94 27%
STERLNBANK 2.16 STERLNBANK 1.26 0.9 71%
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UBA 10.5 UBA 10.81 -0.31 -3%
UBN 5.63 UBN 6.25 -0.62 -10%
UNITYBNK 1.11 UNITYBNK 0.87 0.24 28%
WEMABANK 1.08 WEMABANK 0.97 0.11 11%
ZENITHBANK14.21
ZENITHBANK 13.50.71 5%
Average 8.7%
BREWERIES
CHAMPION 2.58 CHAMPION 3.15 -0.57 -18%
GOLDBREW 0.54 GOLDBREW 0.54 0 0%
GUINNESS 169 GUINNESS 127.5 41.5 33%
INTBREW 6.99 INTBREW 2.27 4.72 208%
JOSBREW 3.36 JOSBREW 3.58 -0.22 -6%
NB 70.24 NB 53 17.24 33%
PREMBREW 0.93 PREMBREW 0.93 0 0%
Average 35.5%BUILDING MATERIALS
ASHAKACEM 19.1 ASHAKACEM 11.39 7.71 68%
BCC 64.5 BCC 43.01 21.49 50%
CCNN 17.05 CCNN 13 4.05 31%
WAPCO 41 WAPCO 30 11 37%
NIGERCEM 5 NIGERCEM 5 0 0%
NIGROPES 9.14 NIGROPES 9.14 0 0%
NIGWIRE 2.58 NIGWIRE 2.58 0 0%
Average 26.5%
CHEMICAL & PAINTS
AFRPAINTS 3.32 AFRPAINTS 3.49 -0.17 -5%
BERGER 6.52 BERGER 3.2 3.32 104%
CAP 31.92 CAP 28 3.92 14%
DNMEYER 4.74 DNMEYER 5.39 -0.65 -12%
IPWA 0.99 IPWA 1.45 -0.46 -32%
NIG-GERMAN 14.29 NIG-GERMAN 15.04 -0.75 -5%
PREMPAINTS 13.4 PREMPAINTS 13.4 0 0%
PORTPAINT 5.67 PORTPAINT 5.67 0 0%
Average 9.2%COMMERCIAL/SERVICES
COURTVILLE 0.51 COURTVILLE 0.5 0.01 2%
NSLTECH 2.92 NSLTECH 4.35 -1.43 -33%
REDSTAREX 3.17 REDSTAREX 2.15 1.02 47%
TRANSEXPR 6.45 TRANSEXPR 6.45 0 0%
Average 4.1%
COMPUTER & OFFICE EQUIPMENT
HALLMARK 3.22 HALLMARK 3.22 0 0%
NCR 7.35 NCR 8.51 -1.16 -14%
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OMATEK 0.54 OMATEK 0.5 0.04 8%
THOMASWY 1.38 THOMASWY 1.84 -0.46 -25%
TRIPPLEG 3.96 TRIPPLEG 4.84 -0.88 -18%
WTN 2.92 WTN 2.92 0 0%
Average -9.8%CONGLOMERATES
AGLEVENT 3.61 AGLEVENT 2.47 1.14 46%
CHELLARAM 8.5 CHELLARAM 14.13 -5.63 -40%
JOHNHOLT 9.28 JOHNHOLT 9.28 0 0%
PZ 34 PZ 25 9 36%
SCOA 8.71 SCOA 8.81 -0.1 -1%
TRANSCORP 0.5 TRANSCORP 0.52 -0.02 -4%
UACN 45 UACN 36.75 8.25 22%
UNILEVER 25.8 UNILEVER 19 6.8 36%
Average 11.9%CONSTRUCTION
ARBICO 26 ARBICO 26 0 0%
CAPALBETO 95.49 CAPALBETO 95.49 0 0%
COSTAIN 6.25 COSTAIN 3.8 2.45 64%
GCAPPA 14.46 GCAPPA 14.46 0 0%
JBERGER 55.01 JBERGER 25.79 29.22 113%
MULTIVERSE 0.5 MULTIVERSE 0.5 0 0%
ROADS 3.01 ROADS 3.3 -0.29 -9%
Average 24.1%
ENGINEERING TECHNOLOGY
CUTIX 3.61 CUTIX 3 0.61 20%
INTERLINK 5.15 INTERLINK 5.15 0 0%
NIWICABLE 0.64 NIWICABLE 0.97 -0.33 -34%
Average 10.2%
FOOD/BEVERAGES & TOBACCO
7UP 49.35 7UP 29.4 19.95 68%
BIGTREAT 0.64 BIGTREAT 0.66 -0.02 -3%
CADBURY 29 CADBURY 10.49 18.51 176%
DANGFLOUR 20.7 DANGFLOUR 10.42 10.28 99%DANGSUGAR 19 DANGSUGAR 14.9 4.1 28%
FLOURMILL 75 FLOURMILL 36.2 38.8 107%
HONYFLOUR 6.41 HONYFLOUR 8.5 -2.09 -25%
FOREMOST 0.51 FOREMOST 0.51 0 0%
MANDRID 5.66 MANDRID 5.95 -0.29 -5%
NNFM 33.58 NNFM 22.94 10.64 46%
NASCON 7.03 NASCON 4.56 2.47 54%
NESTLE 364 NESTLE 239.5 124.5 52%
NBC 35.87 NBC 22.49 13.38 59%
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TANTALIZER 0.8 TANTALIZER 0.75 0.05 7%
UTC 1.04 UTC 0.86 0.18 21%
UNIONDICON 4.22 UNIONDICON 6.01 -1.79 -30%
Average 40.9%
FOOTWEAR
LENNARDS 3.66 LENNARDS 4.26 -0.6 -14%
Average -14.1%
HEALTHCARE
ABOSELAB 4.92 ABOSELAB 4.92 0 0%
EKOCORP 5.58 EKOCORP 5.58 0 0%
EVANSMED 1.39 EVANSMED 1.02 0.37 36%
FIDSON 3 FIDSON 1.86 1.14 61%
GLAXOSMITH 29.93 GLAXOSMITH 22.4 7.53 34%
MAYBAKER 5.6 MAYBAKER 3.86 1.74 45%
MORISON 11.67 MORISON 12.28 -0.61 -5%NEIMETH 2.53 NEIMETH 1.5 1.03 69%
PHARMDEKO 4.73 PHARMDEKO 4.97 -0.24 -5%
UNIONDAC 0.61 UNIONDAC 0.64 -0.03 -5%
Average 23.0%
HOTEL & TOURISM
CAPHOTEL 2.92 CAPHOTEL 1.38 1.54 112%
IKEJAHOTEL 1.4 IKEJAHOTEL 0.87 0.53 61%
TOURIST 4.76 TOURIST 5.28 -0.52 -10%
Average 54%
INDUSTRIAL/DOMESTIC PRODUCTS
ALUMACO8.15
ALUMACO27.71 -19.56
-
70.59%
ALEX 12.39 ALEX 13.04 -0.65 -4.98%
BOCGAS10.18
BOCGAS13.48 -3.3
-
24.48%
ENAMELWA43.06
ENAMELWA55.63 -12.57
-
22.60%
FIRSTALUM 0.5 FIRSTALUM 0.5 0 0.00%
VITAFOAM 6.48 VITAFOAM 5.37 1.11 20.67%
VONO 0.5 VONO 0.69 -0.19 -27.54%
Average-
18.50%
INFORMATION & COMMUNICATION TECHNOLOGY
CHAMS 0.59 CHAMS 0.59 0 0.00%
ETRANZACT4.97
ETRANZACT6.4 -1.43
-
22.34%
IHS 4.02 IHS 4.24 -0.22 -5.19%
MTECH 0.91 MTECH 0.91 0 0.00%
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MTI 0.5 MTI 0.5 0 0.00%
STARCOMMS 1.88 STARCOMMS 1.8 0.08 4.44%
Average -3.85%
INSURANCE
AFRINSURE 0.5 AFRINSURE 0.87 -0.37
-
42.53%
AIICO 1.38 AIICO 0.82 0.56 68.29%
CONFDINS 0.64 CONFDINS 0.64 0 0.00%
CONTINSURE 1.3 CONTINSURE 1.15 0.15 13.04%
CORNERST 0.5 CORNERST 0.52 -0.02 -3.85%
CUSTODYINS 3.5 CUSTODYINS 2.86 0.64 22.38%
EQUITYASUR 0.5 EQUITYASUR 0.5 0 0.00%
GOLDINSURE0.68
GOLDINSURE0.91 -0.23
-
25.27%
GNI 0.5 GNI 0.5 0 0.00%
GUINEAINS 0.5 GUINEAINS 0.5 0 0.00%
HMARKINS 0.5 HMARKINS 0.5 0 0.00%
WAPIC0.61
WAPIC1.15 -0.54
-
46.96%
INTENEGINS0.5
INTENEGINS0.6 -0.1
-
16.67%
IAINSURE 0.5 IAINSURE 0.5 0 0.00%
LASACO0.5
LASACO0.57 -0.07
-
12.28%
LAWUNION 0.51 LAWUNION 0.51 0 0.00%
LINKASSURE 0.5 LINKASSURE 0.5 0 0.00%MBENEFIT
0.5MBENEFIT
0.64 -0.14
-
21.88%
NEM 0.5 NEM 0.54 -0.04 -7.41%
NIGERINS 1.15 NIGERINS 0.97 0.18 18.56%
OASISINS0.51
OASISINS1.49 -0.98
-
65.77%
PRESTIGE3.32
PRESTIGE4 -0.68
-
17.00%
REGALINS 0.5 REGALINS 0.5 0 0.00%
SOVRENINS 0.5 SOVRENINS 0.5 0 0.00%
STACO0.5
STACO1.19 -0.69
-57.98%
STDINSURE0.5
STDINSURE0.57 -0.07
-
12.28%
UNIC0.56
UNIC1.15 -0.59
-
51.30%
UNIVINSURE 0.5 UNIVINSURE 0.5 0 0.00%
Average -9.25%
LEASING
CILEASING 2.73 CILEASING 2.65 0.08 3.02%
Average 3.02%
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MARITIME
JAPAULOIL 1.45 JAPAULOIL 1.18 0.27 22.88%
Average 22.88%
MEDIA
AFROMEDIA 0.56 AFROMEDIA 0.8 -0.24
-
30.00%
DAARCOMM 0.6 DAARCOMM 0.58 0.02 3.45%
Average-
13.28%
MORTGAGE COMPANIES
ABBEYBDS1.39
ABBEYBDS1.61 -0.22
-
13.66%
ASOSAVINGS0.5
ASOSAVINGS0.56 -0.06
-
10.71%
UNHOMES0.74
UNHOMES0.89 -0.15
-
16.85%
Average-
13.74%OTHER FINANCIAL
INSTITUTIONS
CRUSADER0.53
CRUSADER1.5 -0.97
-
64.67%
DEAPCAP 2.02 DEAPCAP 2.02 0 0.00%
FIRSTCAP 0.45 FIRSTCAP 0.45 0 0.00%
NESF 552.2 NESF 552.2 0 0.00%
ROYALEX 0.7 ROYALEX 0.66 0.04 6.06%
Average-
11.72%
PACKAGING
ABPLAST 3.98 ABPLAST 3.98 0 0.00%
AVONCROWN 7.65 AVONCROWN 7.65 0 0.00%
BETAGLAS 15.58 BETAGLAS 14.26 1.32 9.26%
NAMPAK4.44
NAMPAK6.99 -2.55
-
36.48%
POLYPROD2.83
POLYPROD4.45 -1.62
-
36.40%
BAGCO 2.58 BAGCO 1.52 1.06 69.74%
STUDPRESS 2.92 STUDPRESS 2.92 0 0.00%VANLEER 15.03 VANLEER 15.03 0 0.00%
WAGLASS 0.63 WAGLASS 0.63 0 0.00%
Average 0.68%
PETROLEUM(MARKETING)
AP27.08
AP33.51 -6.43
-
19.19%
AFROIL 20.71 AFROIL 20.71 0 0.00%
BECOPETRO0.8
BECOPETRO2.53 -1.73
-
68.38%
CHEVRON 90.1 CHEVRON 69.79 20.31 29.10%
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CONOIL 47.03 CONOIL 27.63 19.4 70.21%
ETERNAOIL 7.11 ETERNAOIL 4.74 2.37 50.00%
MOBIL 158 MOBIL 98.8 59.2 59.92%
OANDO69.95
OANDO93.99 -24.04
-
25.58%
TOTAL 250 TOTAL 149 101 67.79%
Average 18.21%
PRINTING & PUBLISHING
ACADEMY 5.89 ACADEMY 5.4 0.49 9.07%
DTIMES 0.69 DTIMES 0.69 0 0.00%
LONGMAN6.18
LONGMAN9.03 -2.85
-
31.56%
UPL 7.65 UPL 4.97 2.68 53.92%
Average 7.86%
REAL ESTATE
UAC-PROP 20.45 UAC-PROP 19.86 0.59 2.97%
Average 2.97%
ROAD TRANSPORTATION
ABCTRANS 0.67 ABCTRANS 0.73 -0.06 -8.22%
Average -8.22%
TEXTILES
UNTL1.07
UNTL1.9 -0.83
-
43.68%
Average-
43.68%
THE FOREIGN LISTINGS
ETI 17 ETI 15 2 13.33%
PNG 7.28 PNG 7.28 0 0.00%
Average 6.67%
SECOND-TIER SECURITIES
ADSWITCH1.9
ADSWITCH2.3 -0.4
-
17.39%
AFRIK 0.5 AFRIK 0.5 0 0.00%
CAPOIL0.5
CAPOIL0.59 -0.09
-
15.25%
FLEXIBLE 0.5 FLEXIBLE 0.5 0 0.00%
JULI3.05
JULI3.54 -0.49
-
13.84%
KRABO 0.13 KRABO 0.13 0 0.00%
NEWPAK 1.1 NEWPAK 1.1 0 0.00%
RAKUNITY 0.31 RAKUNITY 0.31 0 0.00%
ROKANA 0.6 ROKANA 0.6 0 0.00%
SMURFIT 1.52 SMURFIT 1.52 0 0.00%
TROPICPET 0.44 TROPICPET 0.44 0 0.00%
UDEOFSON 0.5 UDEOFSON 0.5 0 0.00%
UNIONVENT 0.63 UNIONVENT 0.63 0 0.00%
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WAAP 0.5 WAAP 0.5 0 0.00%
MCNICHOLS 1.02 MCNICHOLS 1.02 0 0.00%
UNITYKAP
0.5
UNITYKAP
2.38 -1.88
-
78.99%GTASSURE 2.11 GTASSURE 2.18 -0.07 -3.21%
RESORTSAL 0.5 RESORTSAL 0.5 0 0.00%
Average -7.15%
Source: NSE, Proshare Research
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Outlook /Analyst Opinion
Apparently, equity market in the month of July presented the two sides of the market
dynamism going by the trend of price movements recorded in the month. As noted in
the report, the scourge of bearish run that held sway for the first thirteen trading days of
the month (from 1st to 19th July) was halted by the recovery recorded in the latter part ofthe month, the rebound that resumed on Tuesday 20th July has since remained.
The rebound which cut across all the sectors in the market was on the back of success
story recorded on the Asset Management Company which was assented to by the
President. Banking sector has been the most beneficial of the positive development as
investors enthusiasm seems to have eventually returned to the sector.
The fact that many stocks have shed considerable price weight accounted for the trend
as discerning investors and speculators took advantages of low prices across the market
to take positions for capital appreciations, and possibly holding on to some stocks with
prospects of good returns.
With the ongoing stability in the system- both political and economic, we expect that the
business environment will continue to post more attractive outlook for both local and
foreign investors; and this is expected to rob much more positively on the equity market
in particular and the whole economy in general.
While we hold our view that Asset Management Company is not the total cure for the
market challenges and ailments (http://proshareng.com/blog/?p=383) , we expect that
all things being equal, the expected positive impact on the back of AMC should rob much
more in the market. This is expected to be much more pronounced in the banking sector
which stands as the most beneficiary of the company.
The second quarter results released so far in the banking sector (with others still being
awaited as at the time of filling this report), and with quarterly results in some other
sectors as well, the results in many of these entities seem to be projecting better days
ahead for investors. It may be safe then to conclude that market outlook should be more
robust as against bearish run recorded in the preceding year comparable period.
We are of the view that lending is likely pick up in 2010, as the economy continues to
grow and commercial activity resumes after the slowdown in 2009 but Harmonization of
the fiscal and monetary policies Nigerian economy is a key and important aspect.
Moreover, as the economic recovery continues and scourge of job losses continues to
subside, with improved access to credit since banks should be able to resume lending
properly, improvement in liquidity situations seems inevitable (ceteris paribus.)
We are hopeful that the approaching transition period which tempo is expected to be
more intense as the year closes by will not create any hitch on the market recovery. We
hope the transition through election should be managed with transparency to forestall
any possibility of crisis that may send wrong signals to foreign investors.
In the same vein, leadership issues of the Nigerian Stock Exchange should be managed
properly even as the incumbents tenure expires before the year runs out. The smooth
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transitions both in the nations political sphere as well as in the capital market will surely
bring nothing but pluses to the market.
Market direction will be clear when the results of the bids would be released by
September or October (as expected by CBN) clarifying the ownership of the ailing
institutions as banks really had nothing to offer in terms of net worth as the equity isnegative but There are rooms for building and maintaining wealth as against depletion of
fortunes that had been before now.
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Time Lines - (News/Information in the month and Reaction of Mar
Date Timelines Gain
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July 1
S&P: CBN Requires Guarantee to Sell Banks Says govts propensity to
support uncertain-Standard & Poors, one of the worlds most reputable rating
agencies, has said the Central Bank of Nigeria (CBN) may need to guarantee the
acquisition of the rescued banks to be able to win the confidence of investors.S&P,
which some days ago rated Nigerian banks as high investment risk, in a report ,
titled Banking Industry Country Risk Assessment: Nigeria, identified a number of
hurdles in the way of the recapitalisation of the rescued banks, the execution of the
banking reforms and the return of the financial institutions to profitability.
Insurance industry premium hits N200bn-The nations insurance industry has
recorded a premium income of N200.6 billion for the financial year ended December
31, 2009, as against N150.3 billion it posted the same period in 2008, indicating a
33.5 percent growth. The growth, according to analysts, may have been as a result
of market expansion and increased business resulting from the industrys increased
capacity since after its recapitalisation in 2007.
CBN releases guidelines for granting liquid asset status to state govt.
Bonds- Three months after the Central Bank of Nigeria (CBN) decided to confer
liquid asset status on eligible state government bonds, it has finally issued
guidelines to operationalise the decision. With the guidelines, the Securities and
Exchange Commission (SEC) is expected to monitor the execution of projects
carried out with proceeds from state government bonds. The apex bank decided to
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revive lending and boost growth. He also said that it would cost roughly N750bn to
purchase the bad debts hanging around the rescued banks. Sanusi, in an interview
with Bloomberg News in London on Thursday, said the debt purchases would cost
the bank roughly $5bn as commercial banks did not have collateral to cover the
bad loans.
Foreign reserves fall to $37bn-Nigerias foreign reserves declined to $37.17bn
on Tuesday from $38.79bn at the end of May.The reserves have fallen steadily
since January because of a surge in dollar demand at the local forex market.
Demand for funds from the Central Bank of Nigeria has averaged $600m weekly in
the last two months, while the regulator has sold an average of $500m during the
same period.
Hope rises for sick banks Get CBNs N1.5trn lifeline-Succour may have
finally come the way of weak banks in the country, as the Central Bank of Nigeria
(CBN) plans to clear about N1.5 trillion ($10 billion) of toxic debts from the banking
system by the end of the year. The move by the apex bank, which is aimed at
reviving lending and boosting growth in the banking sector, will indicate a debt
purchase, valued roughly at about N750 billion as commercial banks dont have
collateral to cover their bad loans.
CBN governor sees no rate rise, warns of bubble-Four international banks to bid for
rescued banks Bid starts end of July-The Central Bank of Nigeria governor
said on Thursday he saw no reason to raise interest rates, days before a
monetary policy committee meeting, but said he was concerned about the
risk of another asset bubble forming. Governor Lamido Sanusi also said
four international banks were among the likely bidders for Nigerian banks
rescued last year in a $4 billion bailout and that he expected bids to be in
by the end of the month.
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CBN comfortable with naira-dollar exchange rates Sanusi-The Governor of
the Central Bank of Nigeria, Mr. Lamido Sanusi, has said that the country is
comfortable with current naira levels. According to him, the currency is unlikely to
come under pressure, with foreign reserves capable of funding 17 months of
imports. The naira has appreciated to the strongest level in more than three
months versus the dollar, strengthening by 0.1 per cent to N149.7 as at Thursday.
Union Bank, Ecobank removed from NSE Banking 10 Index-The Nigerian
Stock Exchange has removed Union Bank of Nigeria Plc and Ecobank Nigeria Plc
from the NSE Banking -10 Index. The index committee, after reviewing the banking
index in its quarterly meeting, replaced the two banks with Fidelity Bank Plc and
Skye Bank Plc. The committee also reviewed the NSE-30 and other sectoral indices,
such as the NSE Food, Beverages and Tobacco-10 Index, the NSE Insurance-10
Index and the NSE Oil and Gas-5 Index. Two companies were also removed from
the NSE-30. The companies Cadbury Nigeria Plc and Ecobank Nigeria Plcwere
replaced by Julius Berger Plc and Mobil Oil Nigeria Plc.
Banks crisis: Mergers and acquisitions to be concluded in Q3 CBN-The
Central Bank of Nigeria and financial experts agree that the planned
commencement of operations of the Asset Management Corporation of Nigeria to
coincide with the conclusion of mergers and acquisitions will make the nations
banks bounce back, YEMI KOLAPO reports. Mergers and acquisitions in the Nigerian
banking sector will be concluded in the third quarter of 2010, the Central Bank of
Nigeria has said.
Inter-bank rates climb on big cash outflow-Inter-bank lending rates rose to two
per cent on average last week from 1.1 per cent the previous week after
large chunks of cash flowed out to treasury bills and foreign exchange
purchases drained liquidity from the system. The secured Open Buy Back
climbed to 1.50 per cent, from 1.05 per cent, 50 basis points above the
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packaged late last year for power and other baseline infrastructure revival. The
credit carries a 15-year tenure with an interest of seven per cent.The CBN
Governor, Malam Sanusi Lamido Sanusi, who announced the good news in Abuja
yesterday said plans had been concluded for the signing of agreement with banks
that would be used for the disbursement of the funds next week
NSE council approves N93.6b issues-The Council of the Nigerian Stock
Exchange (NSE) has approved is isues worth N93.6bn through its quotation
committee. Mr Sola Oni, the Assistant General Manager and Head, Corporate
Communications, said in a statement given to the News Agency of Nigeria (NAN) in
Lagos that the approval was in respect of four companies, a state government and
two financial instruments.The statement said the approval was a sign of rising
investors confidence in the stock market. Bayelsa State Government got the
councils approval for its offer for subscription of N50bn Fixed Rate Development
Bond 2016 of N1,000 each at par.
FGs spending on fuel subsidy hits N120bn-The Federal Governments spendingon fuel subsidy has hit N120bn, our correspondent has gathered. It was learnt that
the amount was the total expenditure on subsidy between the first and second
quarters of the year.A top official in one of the government agencies managing the
disbursement of the subsidy to importers told our correspondent on Monday, I can
tell you that the Federal Government has spent not less than N120bn so far,
between January and June, on fuel subsidy.
CBN to maintain interest rates at 6%-The Central Bank of Nigeria will keep its
benchmark interest rate unchanged at 6 percent on today, as the need to
stimulate growth seems to outweigh inflation risks in the nations
economy. The CBN had earlier said it would review whether to start
tightening its monetary policy at its meeting in July because of increased
inflationary risks from government spending and the soaking up of bad
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the CBN did not have a clear programme for its reform. They also faulted the SEC
on the extension of the deadline given to the Nigerian Stock Exchange to appoint a
new Director-General.
July 12Govt begins tracking of foreign loans management-The Federal Government has
flagged-off the tracking of all foreign loans secured by it. The move is to
ensure that the credit facilities are channelled to purposes they were
meant for, to achieve value for money. Currently, an estimated $4.23
billion has been secured by the Federal Government, which recently
expressed concern on the poor implementation and administration
bottlenecks that have negatively impacted on projects across the country.
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July 13CBN begins process of bailout to airlines, manufacturers-Respite has come the
way of the hitherto domestic airlines enmeshed in financial mess as the
process has reached an advanced stage for the Central Bank of Nigeria
(CBN) to release the N1 billion bailout loans to each of the airlines
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apex bank had in a memo to the respective banks last Friday invited all the
managing directors as well as the executive and non- executive directors of the
affected banks to a town hall meeting in Abuja with top officials of the CBN.
SEC suspends 34 stockbrokers for alleged default in reporting
requirements-The Securities and Exchange Commission (SEC) has suspended the
operating licences of 34 stockbrokers for allegedly defaulting in the commissions
statutory reporting requirements. Director-General of SEC, Arunma Oteh, explained
yesterday that the suspension would not be lifted until the affected stockbrokers
comply with all the necessary statutory mandates. The suspension is coming barely
three months after SEC dispatched letters of queries to some stockbroking firms for
allegedly indulging in unethical practices.
CBN makes U-turn on new guidelines-The Central Bank of Nigeria, CBN, has
backpedalled on its directive that banks should disclose executive
compensation and bonuses in their annual accounts. The apex bank, last
week, issued a new prudential guidelines which replaced the one issued in
May which mandated banks to disclose in their annual accounts monies
paid to executives and staff as compensation, profit sharing and bonuses.
Also deleted from the new prudential guidelines is the limit on credit to
directors and significant shareholders and the general provisioning of one
per cent for all loans.
July 16 Nigeria denies state oil firm NNPC bankrupt-The Nigerian government has
strongly denied claims that the state oil company is bankrupt, shortly after a junior
minister said it was insolvent.On Tuesday, Junior Finance Minister Remi Babalola
said the Nigerian National Petroleum Corporation was unable to pay debts of $5bn
(3.3bn).However, two senior cabinet ministers flatly contradicted him.Nigeria is a
major producer and exporter of crude oil but depends almost entirely on imported
fuel.Finance Minister Segun Aganga told journalists the NNPC was a going concern
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and an important arm of government.
CBN: Shareholders Now to Recapitalise Rescued Banks-The Central Bank of
Nigeria (CBN) has enhanced the participation of shareholders in the recapitalisation
of rescued banks by bestowing on them the power to midwife the process. They
would also take the final decision on who invests in the financial institutions. Withthis development, the apex bank has heeded to the wishes of the shareholders,
who have been clamouring that they be allowed to recapitalise the banks.
Money Laundering Bill Runs into Hitch-The clause-by-clause consideration of
the Senate Committee on Drugs, Narcotics, Financial Crimes and Anti-Corruption on
the Money Laundering Act 2004 (Repeal and Re-enactment) Bill 2010 was stalled
on the floor of the Senate yesterday following disagreements over some of its
provisions. Since deliberations on the draft Bill began about four weeks ago, many
senators have expressed misgivings over some of its provisions, which they believe
to be too draconian and unrealistic.
Bank lending to real estate drops 60% as credit squeeze lingers-The real
estate sector of the economy has seen a substantial drop in bank lending that
hovers between 60 and 70 percent following the credit squeeze in the banking
sector. Due more to the on-going banking reform than the global economic
recession, the Nigerian banking sector is having serious liquidity challenges. The
situation is such that most of the banks appear to have outlawed lending. The few
that lend are very selective, lending only to individuals and institutions that they
like most, especially those that pose minimal risk.
Asset management company takes off July 26- Barring any unforeseen
circumstance, the Asset Management Company (AMC), an establishment that will
soak up bad debts in the banking sector, is set to take off in the next two weeks.
This follows the receipt of the harmonised Asset Management Company (AMCON)
bill by President Goodluck Jonathan last weekend. AMCON, when signed into law,
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sell the bailed out banks, may have been designed to send positive signals to the
Nigerian financial markets to ease what has been described as a year-long tension
that kept them in slow motion. At a meeting last week with the shareholders and
management of the troubled banks, CBN had agreed to leave their recapitalisation
in the hands of the shareholders, effectively jettisoning the plan to sell the banks to
new investors.
Inflation dips to lowest for two years- Consumer inflation eases to 10.3%
in June Growth in food prices declines to 12%-Inflation year-on-year eased
to 10.3 percent in June, a drop from 11 percent recorded in May and the lowest
since June 2008 when impact of global food crisis pushed it to a double digit.
Growth in food prices also eased to 12.0 percent year-on-year from 12.3 percent in
May.The growth in consumer prices is the lowest monthly year-on-year increase
since May 2008, when it rose to 9.7 percent, according to figures from National
Bureau of Statistics (NBS) weekend. Once again, despite ample domestic liquidity,
Nigerian inflation surprises with a year-on-year fall, said Razia Khan, head ofAfrica research at Standard Chartered.
Nigeria earns N33 trillion from oil, gas in six years -Production activities from
the nations oil and gas sector raked-in about $220 billion (N33 trillion) into the
Federal Governments coffers between 2003 and 2009. Statistics obtained from the
International Oil Companies (IOCs) also revealed that the cumulative capital
investment in the sector (excluding exploration) reached about $81 billion (N12.150
trillion) during the period under review.The Chairman of the Oil Producing Trade
Section (OPTS) of the Lagos Chamber of Commerce and Industry, Mr. Andrew
Fawthorpe, disclosed this at the South West Road Show of the Nigeria Extractive
Industries Transparency Initiative (NEITI) in Lagos recently.
Rescued banks: Shareholders warn local banks to stay clear-Shareholders
have warned local banks in the country planing to buy into the eight rescued banks
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whose executive man agement the Central Bank of Nigeria (CBN) sacked in
August last year to stay away until the legal issues beclouding the intervention of
the apex bank are sorted out.The Chairman of Independent Shareholders
Association of Nigeria (ISAN), Sir Sunny Nwosu, who spoke the minds of his
members during an interview with Vanguard said,We shareholders are warning the
local banks that are planning to buy into the rescued banks to stay away because
they would be buying litigation cases. We will not allow our investment to go down
the drain. We are in court and we will see to the end of it.
New Prudential Guidelines :A major CBN policy summersault-The Central
Bank of Nigeria, CBN, made a major and unprecedented policy summersault when
it released a new prudential guidelines less than two months after the previous one
was released. The new guidelines, released July 9th and effective from July 1st,
was in every ramification a watered down version of the one released in May,
lacking most of the restrictions and regulations which would have curtailed the
excesses and malpractices that have bedevilled the industry for long.
Bauchi NSE woos investors-Bauchi State branch of the Nigerian Stock Exchange
(NSE) is wooing civil servants in the state to invest in the stock market.The branch
manager of the NSE in Bauchi, Ahmed Maigari Misau, stated this at the weekend
during a sensitisation lecture for the senior staff of the Ministry of Information in
Bauchi, organised by the Nigerian Stock Exchange.
World recovery continues but risks increase, says IMF-Balancing the strong
growth numbers for the first half of 2010 and the adverse impact of increased
financial turbulence, the International Monetary Fund (IMF) forecasts world growth
to rise to 4 per cent this year, before falling somewhat to 4 per cent in 2011 - with
the world average masking large differences around the globe.But despite the
stronger than expected first half recovery, the IMF warned that uncertainties
surrounding sovereign and financial sector risks in parts of the euro area could
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spread more widely, posing difficulties for both financial stability and the economic
outlook.
Bailout: N130bn approved for disbursement BOI-A total of N130bn has been
approved by the Bank of Industry for disbursement to manufacturers and operators
of Small and Medium Scale Enterprises. This amount forms part of the N200bnearmarked by the Central Bank of Nigeria for the refinancing and restructuring of
the manufacturing sector.This was disclosed by the Managing Director/Chief
Executive Officer, BOI, Ms. Evelyn Oputu, during the Quarterly Business Luncheon
organised by the Lagos Chamber of Commerce and Industry on Friday.
Foreign exchange reserves climb to $38.5bn-Nigerias foreign exchange
reserves climbed by 2.95 per cent to $38.53bn by mid-July from $37.42bn at the
end of June. Reuters quoted forex traders as saying that demand for foreign
exchange at the bi-weekly forex auctions supervised by the Central Bank of Nigeria
had slowed. The forex reserves stood at $43.12bn on June 7, last year. The CBN
has consistently said it is comfortable with Nigerias reserves, which are sufficient
to finance more than 17 months of the countrys imports. Meanwhile, consumer
inflation eased to 10.3 per cent, year-on-year, in June from 11 per cent the
previous month, its lowest level for more than two years, the National Bureau of
Statistics said on Friday.
Budget inflow crashes inter-bank rates-Inter-bank lending rates retreated to
1.41 per cent on the average last week, from 8.25 per cent the previous
week, following large injection of funds from government allocations to
public sector agencies, traders said on Friday. The Federal Government on
Tuesday distributed N413.28bn from the Federation Account to the three
tiers of government for June. Some of the funds entered the system by
Thursday, forcing down inter-bank lending rates, traders said.
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Banks, capital market set for recovery on back of AMCON-A new vista may
have been opened in the banking industry and a return of the bull run in the capital
market imminent, following the signing into law of the Asset Management Bill by
President Goodluck Jonathan on Monday. The new law provides for the purchase of
non performing loans from bailed-out banks and clears the hurdles on the path of
their return to granting credit to the real s
FG to raise additional N315bn bonds in Q3-A week after the Federal
Government announced plans to raise N105 billion and about $700 million in
different tenor of bonds this month, the Debt Management Office (DMO) yesterday
said it plans to raise another N315 billion ($2.10 billion) in the third quarter of this
year. The bonds which experts say had become necessary following the huge
financing gap in the 2010 budget will come in three, five and 20-year sovereign
bonds. The DMO said in its offer calendar that it would issue N105 billion,
comprising N35 billion each in three, five and 20-year bonds, every month in the
third quarter
Regulators review margin lending guidelines- Reviewed guidelines on margin
lending in the stock market will be released by next month. Arunmah
Otteh, the director general of the Securities and Exchange Commission
(SEC) said the organisation and the Central Bank of Nigeria (CBN) will
jointly issue the guidelines in a bid to correct the negative impact of
margin lending on the capital market.Speaking in Lagos at a press briefing
at the weekend, Ms. Oteh said the Financial Services Regulation
Coordination Committee (FSRCC), which comprises SEC, CBN, National
Pension Commission, Nigerian Stock Exchange, National Insurance
Commission, Corporate Affairs Commission, and the Ministry of Finance,
have been deliberating on the margin guidelines.
July 21 CBN: Federally-collected Revenue Drops 20% in April-Nigerias total 42 20 At th
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N100 million.
CBN bureaucracy delays disbursement of N500bn real sector fund-Like
similar schemes before it, the N500 billion real sector fund has fallen victim of
internal bureaucracy of the Central Bank of Nigeria (CBN). Investigation revealed
that two months after the release of the operational guidelines, banks are yet todisburse money or grant any loan to the real sector under the Fund as the CBN is
yet to release money to the Bank of Industry (BOI), which is the managing agent of
the Fund.
We dont have succession crisis NSE-The management of the Nigerian Stock
Exchange said on Monday that there was no succession crisis at the Exchange as
published by a newspaper (not The Punch), on Monday. According to a statement
signed by the management of the NSE, the succession process of the NSE is in
progress, in line with the directives of the Securities and Exchange Commission and
Accenture, a consulting firm, handling the recruitment exercise.
July 28 CBN seeks five laws to drive financial sector reforms Wants re-enactment
of BOFIA: The Central Bank of Nigeria (CBN) has sought five legislations which
should strengthen the ongoing reforms in the financial systems and create a
clement environment for the banking sector to thrive. The laws are expected to
come alongside the issuance of new regulations by the apex bank abolishing
universal banking.One of the laws is a re-enactment of the Banks and Other
Financial Institutions Act (BOFIA). Others are Office of the Nigerian Financial
Ombudsman Bill; the Nigerian Financial International Centre (Establishment) Act;
National Alternative Dispute Resolution Regulation Commission, and the Electronic
Transaction Bill.
People Cant Buy Banks-Central Bank of Nigeria (CBN) said yesterday in Lagos
that while it ensures that all parties are carried along in the recapitalisation of the
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stocks in that order.
Nigeria crude Sept output to top 2m bpd Trade- Nigeria will export an
average of 2.10 million bpd of crude oil in September, up slightly from a revised
2.08 million bpd in August, according to data from oil companies and traders.
Nigerias crude oil exports are set to top 2 million barrels per day (bpd) for the third
month running in September, trade sources said on Wednesday, as Africas largest
energy producer improves output reliability.
World Banks package for acquisition of distressed banks excites analysts -
Its tacit support for our reforms, says CBN Disbursement of N45 billion to GTBank
and First Bank by the World Bank to aid in the acquisition of distressed banks has
been described as a good omen that will hasten resolution of the crisis in the
industry.
Sanusi Wants Electricity Tariff Raised by 200% - Governor of the Central Bank
of Nigeria (CBN) Mallam Sanusi Lamido Sanusi yesterday called for an immediate
increase of 200 per cent on the current N7 per a unit of electricity. Sanusi argued
that this is a sure way of reviving the power sector, saying the present rate is not
competitive enough to bring the country out of its energy demand shortfall.
Sanusi: No Cause for Alarm on National Economy - Sanusi declared that the
economy is, as expected has, steadily growing in Gross Domestic Product, pointing
out that there been moderation in inflation. Governor of the Central Bank of Nigeria
(CBN), Malam Sanusi Lamido Sanusi, yesterday did a critical review of the national
economy at the meeting of the Federal Executive Council (FEC) and concluded that
there was no cause for alarm.
No Rush to Raise Interest Rates, Says Bank of England Governor- Mervyn
King today signalled the Bank of England is in no hurry to raise interest rates as he
warned several risks remained to the recovery and that there was no talk of"applying the brakes" yet.
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July 30 Citigroup agrees $75m fraud fine - Banking giant Citigroup has agreed to pay
$75m (48m) to settle civil charges that it misled investors over potential losses
from high-risk mortgages.It agreed the settlement with US financial watchdog the
Securities and Exchange Commission (SEC).
CBN partner Security Commission on single registrar - The Central Bank of
Nigeria (CBN) has said it is working with the Securities and Exchange Commission
(SEC) towards creating a single registrar for all securities in the capital market.
CBN: 10 Banks Have N1.5tr Negative Capital - Ten banks that failed a joint
examination conducted last year for 24 of them by the Central Bank of Nigeria
(CBN) and the Nigeria Deposit Insurance Corporation (NDIC) currently have a
negative capital of N1.5 trillion, the apex bank Governor Sanusi Lamido Sanusi has
said.
SEC may step into Stock Exchange crisis - An opportunity appears to have
been opened for the Arunma Otteh-led Securities and Exchange Commission (SEC)
to push its agenda of full regulatory oversight following a fresh allegation of
financial impropriety against the management of the Nigerian Stock Exchange
(NSE) which grossed a hefty N42.2 billion income in four years.
SECsays Afribank, executives manipulated 2007 public offer- The Securities
and Exchange Commission (SEC) yesterday accused Afribank and its senior
executives of manipulating the banks December 2007 public offer in an elaborate
scheme that was deliberately designed to buy back its shares deceive the market.
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