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Re: Nigerian Stock Exchange Market Pick Alerts by Nobody: 11:28pm On May 19, 2015 |
I think this bulletin will help most of our BNSITL to understand today's MPC decision... MPC Plays It Safe The MPC made a tacit move towards the easing of interest rates and an accommodative posture, by allowing for the harmonization of the cash reserves ratios to 31%, from 75% and 20% on the public and private sectors respectively. System-wide deposits are in a 60:40 ratio between the public and private sector. Based on this, the harmonization will lead to a net inflow of approximately 28% of total deposits. This is an equivalent of 8 times the average monthly FAAC allocation. In May, the FAAC allocation was N388bn. In the past 6 months the statutory inflows have led to a sharp decline in interbank rates towards 10.5%p.a. The major beneficiaries of this new dispensation are the tier 1 banks mainly: FBN, Zenith and UBA. The private sector dependent institutions like Stanbic IBTC, Standard Chartered and Citi Bank will face challenges. The Nigerian economy has just reported a sharp decline in real GDP growth from 5.96% in Q4’14 to 3.96% in Q1’15. This slow growth coincides with an increase in consumer prices from 8.5% in March to 8.7% in April. Hence, the economy is threatened with early stages of stagflation. This has created a policy dilemma of either stimulating growth or targeting price stability. Since the rate of decline in economic growth (1.98%) outweighs the uptick (0.2%) in inflation, the CBN has made a tactical and strategic move towards monetary policy easing. The CBN seems to be aligning itself with a possible fiscal stance of the Buhari-team. The new administration is likely to embark on a fiscal stimulus meant to jumpstart economic activity and help the economy out of its stagflation state. The CBN stayed away from the thorny issue of the value of the naira and made no move towards devaluation. This helps to keep the door-wide open for the new government to deal with the hydra-headed problem of fuel subsidies . Implications Money Market The increase in money supply aggregates could stoke inflationary pressures and we could see the inflation figures move towards 11%. The positive fallout of an increase in money supply is a shift in the aggregate demand curve followed by an increase in aggregate output . Interest Rates Interest rates usually move in tandem with market liquidity conditions. We anticipate a decline in average NIBOR to a range of 8% p.a.- 10% p.a. from the current level of 26% p.a.- 30% p.a. Forex Market The forex market has stabilized at N198/$ at the interbank market and at N221/$ at the parallel market since the last MPC meeting in March. The anticipated increase in money market liquidity will heighten the speculative pressure on the currency. The current spread of N23 between the two segments of the foreign exchange market will diverge further. Capital Market Fixed Income There is an inverse relationship between the price of assets and interest rates. A decline in rates will lead to an increase in the prices of bonds and stocks, great news for the institutional investors and fund managers. The stock market is expected to rally as a result. Policy comparison Major SSA countries recently maintained their monetary policy stance except for Ghana that increased its MPR by 100bps to 22%p.a. This is due to the increased inflationary pressures and depreciating currencies. Specifically in Ghana, the currency has depreciated by 20.32% YTD against the dollar and inflation increased from 16.6% to 16.8%. Meanwhile, the lower cost of imported oil has reduced the incentive to increase interest rates across SSA countries. However, Nigeria and Angola, the major oil producers are battling currency pressures, low foreign reserves and inflation. Table 1: Policy Comparison Exchange Rate (% change YTD) April Inflation (%) Benchmark Interest Rate (% p.a) External Reserves ($’bn) Money supply Growth (%) Nigeria 0.19 8.70↑ 13.00 « 29.81 15.56↑ Angola 2.56 8.23↑ 9.25 « 2 5 1.51↑ Ghana 8.22 16.80↑ 22.00 ↑ 5.4 Kenya 4.41 7.08↑ 8.50 « 9 0.81↑ South Africa 0.29↑ 4.00↑ 5.75 « 39.7 2.26↑ Source : NBS, FDC Research , BOG, TradingEconomics.com What Next? The immediate effect of the harmonization of the CRR increases system liquidity which ultimately heightens the demand pressure on the currency. Although the CBN has addressed the immediate problem of slowing growth, the apex bank will still have to contend with exchange rate pressures in the medium term and this may coincide with the subsidy issue. In the end, the CBN will have to determine an efficient exchange rate determining mechanism. http://www.proshareng.com/reports/8250/FDC-Economic-Bulletin---May-19,--2015-Proshare 7 Likes 1 Share |
Re: Nigerian Stock Exchange Market Pick Alerts by lancee(m): 12:52am On May 20, 2015 |
Thanks 08mrjoy |
Re: Nigerian Stock Exchange Market Pick Alerts by freeman67: 2:25am On May 20, 2015 |
Toluway:Not explicit enough. How do we take advantage as required if we intend to. |
Re: Nigerian Stock Exchange Market Pick Alerts by Agbalowomeri: 3:41am On May 20, 2015 |
Men in black! Sai Buhari 1 Like |
Re: Nigerian Stock Exchange Market Pick Alerts by Nobody: 4:06am On May 20, 2015 |
Re: Nigerian Stock Exchange Market Pick Alerts by ihedioramma: 5:01am On May 20, 2015 |
myjoy08:Is that what he ask you to do?. myjoy08 for example if you have uba can you sell it this week? if yes tell me why and if know let me know?. |
Re: Nigerian Stock Exchange Market Pick Alerts by ihedioramma: 5:02am On May 20, 2015 |
myjoy08:Is that what he ask you to do?. chibuking81 for example if you have uba can you sell it this week? if yes tell me why and if know let me know?. |
Re: Nigerian Stock Exchange Market Pick Alerts by Toluway: 5:41am On May 20, 2015 |
Not explicit enough. How do we take advantage as required if we intend to. (Quote ) ( Report) (Like ) (Share ) These are are being traded like the normal stocks, but not listed in the stock exchange market. They are called secondary markets. You will simply buy them the way you buy the normal stocks and sell when you meet your profit target. One of the dealers of this type of transaction is a brokerage firm, namely, Fortright Securities and investment limited. 1 Like |
Re: Nigerian Stock Exchange Market Pick Alerts by Chibuking81(m): 5:42am On May 20, 2015 |
ihedioramma:UBA is a good bank, but considering the camp of their CEO, I doubt whether the new government will favour them, for now I prefer first bank ahead of UBA, for now I don't have UBA in my portfolio. |
Re: Nigerian Stock Exchange Market Pick Alerts by Agbalowomeri: 5:43am On May 20, 2015 |
Toluway: Bros u sure say those securities dey change price? I never see anyone wey don change price o 1 Like |
Re: Nigerian Stock Exchange Market Pick Alerts by Agbalowomeri: 5:44am On May 20, 2015 |
Chibuking81: Bros no policy can favour one bank and leave the others out 2 Likes |
Re: Nigerian Stock Exchange Market Pick Alerts by Agbalowomeri: 5:46am On May 20, 2015 |
All hail the roaring bull! Abeg who see Aks? 42,000 here we come |
Re: Nigerian Stock Exchange Market Pick Alerts by megainvest: 6:14am On May 20, 2015 |
Toluway: Thanks. Pls a few questions sir: 1. Does any of the brokers have an online trading platform? 2.Do these companies give dividends and bonuses? 3. What advantages does one stand to gain? 4. What are the key risks investors are exposed to? 1 Like |
Re: Nigerian Stock Exchange Market Pick Alerts by carpenter(m): 7:32am On May 20, 2015 |
It is dividends season and I came across this. http://groupssa.com/understandingdividenddates.html Cheers |
Re: Nigerian Stock Exchange Market Pick Alerts by Nobody: 9:01am On May 20, 2015 |
ihedioramma: Sell it this week? Absolutely No! UBA still has many upsides potential likewise some other banks when anti-banks policy is being ease or remove along their way...And on the other hand, it depends on when u enter and whether u have achieved your target? In the voice of my friend, Sir Agba: why sell within one month for 12% when u can make more than 80% in the next 5 months...(The term applies to the smart traders)! 1 Like 1 Share |
Re: Nigerian Stock Exchange Market Pick Alerts by paulcube: 9:13am On May 20, 2015 |
myjoy08: Wise words! More like 2-4 months! |
Re: Nigerian Stock Exchange Market Pick Alerts by Kagame: 9:37am On May 20, 2015 |
Kagame: I have confirmed that the TSA has not been implemented so my analysis on that basis is entirely wrong. Instead the new policy rates would have the opposite effect than I postulated above. I was wrong. 3 Likes |
Re: Nigerian Stock Exchange Market Pick Alerts by feelamong(m): 9:41am On May 20, 2015 |
Re: Nigerian Stock Exchange Market Pick Alerts by feelamong(m): 9:42am On May 20, 2015 |
Kagame: ![]() |
Re: Nigerian Stock Exchange Market Pick Alerts by Nobody: 9:52am On May 20, 2015 |
Kagame: Single treasury has been implemented for federal govt accounts. However, banks that hold state and lg accounts will have money to swim in. 1 Like |
Re: Nigerian Stock Exchange Market Pick Alerts by Nobody: 10:01am On May 20, 2015 |
Pre-market bids order are really looking good for banking stocks as at this minutes...lol ![]() |
Re: Nigerian Stock Exchange Market Pick Alerts by paulcube: 10:02am On May 20, 2015 |
mercylicious:Hence why Skye is a lucky bank! |
Re: Nigerian Stock Exchange Market Pick Alerts by paulcube: 10:03am On May 20, 2015 |
paulcube:Skye at N5.... 2 months time frame... 1 Like |
Re: Nigerian Stock Exchange Market Pick Alerts by Born2berich: 10:03am On May 20, 2015 |
Agbalowomeri: Which of the Sai buhari? the General/president elect or NSEMPA? 1 Like |
Re: Nigerian Stock Exchange Market Pick Alerts by Born2berich: 10:04am On May 20, 2015 |
Chibuking81: UBA is a good stock that still have an upside potential. |
Re: Nigerian Stock Exchange Market Pick Alerts by Kagame: 10:07am On May 20, 2015 |
mercylicious: Yea Mercy I read that somewhere too ,but other news outlets like businessday are giving the impression that the incoming Buhari administration would be the one to implement it . I have also noticed a divergence in the analysis of the outcome of the MPC meeting. Analysts at standard chartered bank are of the opinion that the resultant effect would be a liquidity tightening ,while other analysts who happen to be in the majority think otherwise. For clarity, it would be nice if we can decipher how much would be sterilized or injected into the market. |
Re: Nigerian Stock Exchange Market Pick Alerts by Nobody: 10:26am On May 20, 2015 |
AIRLINE SERVICE & LOGISTICS Proposed Bonus: Nil Proposed Dividend: 15Kobo Qualification Date: June 12, 2015 Closure Date: June 15, 2015 to June 19, 2015 (both days inclusive) Annual General Meeting: July 2, 2015 Payment Date: July 3, 2015 |
Re: Nigerian Stock Exchange Market Pick Alerts by feelamong(m): 10:28am On May 20, 2015 |
Kagame: How can any analyst say it will lead to liquidity tightening? anyway pls do post the link for that StanChart analyst make we look am well! maybe they are seeing something I cannot see from the bar beach where I am now.. |
Re: Nigerian Stock Exchange Market Pick Alerts by Nobody: 10:31am On May 20, 2015 |
I don enter Skye oooo. Pure gambling on mpc news. Dem carry Lagos state funds . 3 Likes |
Re: Nigerian Stock Exchange Market Pick Alerts by abs4uall2000(m): 10:32am On May 20, 2015 |
House, what's happening on Lasaco.... ![]() |
Re: Nigerian Stock Exchange Market Pick Alerts by paulcube: 10:35am On May 20, 2015 |
mercylicious:wise move! |
Re: Nigerian Stock Exchange Market Pick Alerts by feelamong(m): 10:45am On May 20, 2015 |
paulcube: HMMMM! ONLY TIME WILL TELL! |
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