• Baton Hand-Off: Economic Headwinds and Expected Resilience

    Global Economic Landscape, no dramatic rebound in sightBased on series of projections, global GDP growth is projected at between 1.5 – 2.8%in 2023. The factors influencing these forecasts are similar. They include fragileeconomic conditions, higher-than-expected inflation figures, abrupt spikes in interestrates, subdued investments, a resurgence of the COVID-19 pandemic and escalatinggeopolitical tensions. Global GDP growth …

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  • Economic Review and 2022 Outlook – Blend of Optimism and Uncertainty

    Nigeria’s economy has posted GDP expansion for four quarters since its last recession recorded in 2020. However, the current growth rate levels are unable to halt the steady decline in incomes and the rise in poverty. Our in-house estimates assume GDP at current market prices as high as pre-pandemic levels (2019). We considered increased vaccination …

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  • 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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  • Dividend yields and investment returns

    As fixed income yields tighten the dividend yields of some of the largest stocks listed on the NGX Exchange are beginning to look juicy. From our own brokerage activity, we are aware of how investors appreciate dividend yields.  So, the question is as follows. Could one construct a portfolio of high dividend-paying stocks and thereby …

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  • The role of dividends in total return

    For the past 10 weeks we have documented the flow of liquidity back into the Nigerian Treasury Bill (T-bil) and FGN bond markets, and the resulting fall in yields. Yet inflation has not fallen as quickly, and so stays well ahead of the yields available on risk-free Naira investments. Yields are now so low that …

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  • Why you need to study Total Equity Returns

    Wise investors in the Nigerian equity market count the dividend yields of the stocks they hold.  These days, and with T-bill yields and bond yields trending downwards (and far below the level of inflation), there are some stocks with yields as strong as fixed income.  As investors consider risk assets, like equities, again, they need …

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