• Nigerian Stocks: Worth a second look

    Now that we are almost three-quarters through the year, Nigeria stock market investors might want to take a look at what factors and sectors have driven the market’s performance and why. See details below. FX Last week, the exchange rate at the Investors and Exporters Window (I&E Window) weakened by 0.49% to a record low …

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  • Taking stock of the LDR policy

    In 2019, the Central Bank of Nigeria decided to introduce a policy that, in its view, would stimulate the economy while keeping monetary policy tight. A little over two years after its implementation, we examine the impact of the LDR policy on the banks and the overall economy. See page details below. FX Last week, …

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  • Nigerian Banks: H1 2021 Scorecard

    The scorecard for the listed banks that have reported their H1 results is mixed.  We believe that it is a matter of timing changes in interest rates and that Q3 is likely to be a better story than Q2 and H1. See details below. FX Last week, the exchange rate at the Investors and Exporters …

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  • Interest rates and banks’ margins

    At the end of the second quarter of the year we wrote about how Nigerian banks were moving lending rates in order to accommodate rising market interest rates (see Coronation Research: Nigerian Banks, Resilience Built In, 25 June). Since then market interest rates, and interbank lending rates, have been falling. This suggests margin expansion for …

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  • Why equities have been so bad

    Over the past three weeks, the Nigeria Weekly Update has examined how total cumulative equity returns (returns with dividends reinvested) have outperformed equities this year and examined the best dividend-paying stocks. Yet, over a long study period (six years) the returns have been poor.  The reason, we believe, is the de-rating of the market, with …

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  • The World Bank Blueprint

    The World Bank does not leave a stone unturned when it comes to examining Nigeria. Many of its recommendations come as no surprise: full harmonisation of foreign exchange markets; removal of all tariffs; and trade liberalisation, for example. But who would read the entirety of this authoritative report and summarise it?  We would.  See details …

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  • Bitcoin and Nigeria

    Bitcoin has taken the world by storm over the past year, but Nigerians were alert to the opportunities early on, and data suggests that they are among the most active Bitcoin traders in the world. At the same time, numerous central banks take a dim view of cryptocurrencies and would like to control them. What …

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  • Oil prices and FX reserves

    One can almost hear the sigh of relief coming from Abuja.  Oil prices are up and the immediate threat to the nation’s foreign exchange reserves has receded. Markets (long-dated bonds and equities) have responded positively. However, inflation is still far above risk-free rates and the unofficial exchange rate is slipping. The game is not yet …

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  • The CBN’s box of tools

    Economic growth; inflation; foreign exchange.  These are three of the Central Bank of Nigeria’s key responsibilities, yet prioritising one at the expense of the others can prove costly.  Yet how – with what tools – does the CBN manage them? We provide answers below. FX Last week, the exchange rate in the Investors and Exporters …

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  • Slow GDP points to MPR rate hold

    Q1 2021 GDP was reported on Sunday evening and showed the growth rate at 0.51% year-on-year (y/y). This was better than the 0.11% y/y growth of Q4 but Q1 2021’s non-oil growth was actually slower than Q4 (+0.79% y/y against +1.69% y/y).  Although the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) …

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