Economy Post-Election: Afrinvest Lists 7-Point Agenda for Buhari

03/03/2019

Buhari receiving Certificate of Return from INEC

Following the conclusion of the closely contested 2019 elections and the re-emergence of Muhammadu Buhari as President of the Federal Republic of Nigeria, with a fresh 4-year mandate beginning on the 29th of May 2019, it is pertinent to reiterate critical issues previously highlighted in our 2018 Banking Sector Report titled “An Economic Agenda for A New Government.”

These issues were also emphasised in our Economic and Financial Market Outlook 2019 titled “On the Precipice!”
In our view, President Buhari’s victory presents him a new opportunity to choose between setting the country on the path to prosperity or sustaining poor policy choices with economic consequences of a bleaker growth prospects.

Nigeria’s fiscal vulnerabilities as well as her economic structural faults continue to worsen poverty levels (estimated at 91.3m people according to Brookings Institution), unemployment and economic growth, which require the government to take very decisively tough decisions. But, given the socialist leaning of the current government, would Nigerians have to wait till 2023?
Post-Presidential elections, we are still unshaken in our conviction that for economic growth to return to the pre-2014 oil price crash average of 7.6% (2000-2014), strategic reforms must take place in 7 key areas, if the economy and markets will show strong positive momentum over the next four years. We further highlight these critical areas below:

Oil & Gas Sector Reform
Power Sector Reform
Boosting Competitiveness in Trade and Investment
Transportation & Infrastructure Development
Human Capital Development
Security
Boosting Agriculture Productivity

Overall, considering an aging agriculture and mostly rural labour force, high rural to urban migration and the predisposition of youths to modern services, commercial agriculture offers the best chance at restoring food security.

The cost of inaction cannot be overstated as we herald the start of new administration. The risk factors remain on the horizon and remain poised to break the bonds of this tenuous seal. The country remains vulnerable to oil price shocks as buffers remain weak.

While crude oil production levels are expected to increase, latent security risks in the Niger-delta region, amid volatile oil prices could pressure government finances. Crude oil receipts pressure would most definitely filter into FX liquidity risk, which would exert immense pressure on the economy.

The issues are rife and seemingly insurmountable, if political expediency remains the first criteria for decision making.

Zenith Bank Earnings FY 2018: Lower Income, Improved Efficiency

Business Journal

28/02/2019

Peter Amangbo Group MD/CEO Zenith Bank Plc

Lower Income but Improved Efficiency
Zenith Bank Plc recently released its FY: 2018 result with largely impressive earnings reported. Against the backdrop of the cloudy macro-environment, in which risk asset creation was expected to be weak, the bank recorded appreciable declines in interest and non-interest incomes by 7.3% and 31.6% Y-o-Y respectively.

Notwithstanding this, the bank recorded a strong growth in PAT which expanded by 11.3% Y-o-Y, as costs declined precipitously. We are encouraged by the bank’s performance and view this improved efficiency as a sustainable bedrock to build strong future performances.

Given this assessment and considering current market conditions we revise our rating on the stock from “HOLD” to “ACCUMULATE and have a 12-month TP of N30.52 on the counter.

Financial Performance Review
The bank recorded a significant decline in gross earnings of 15.4% Y-o-Y, driven by declines in both funded and non-funded income. The decline in interest income was primarily driven by reduced income from loans and advances (-13.2% Y-o-Y), although there was also a moderate decline in income from investment securities (-0.1%).

The decline in income from loans and advances may be related to the substantial decline of 13.2% Y-o-Y in total risk assets which settled at N1.8tn. The bank’s management noted that prepayments early in the year were responsible and given the risky environment, it is not surprising that the bank didn’t build its risk asset portfolio back up during 2018.

Interestingly, non-funded income also declined significantly by 31.6% Y-o-Y due to much reduced derivative income (trading gains), which had propped up the bank’s gross earnings in the previous year. In FY: 2018, the derivative book closed in the red at -N16.8bn relative to N68.7bn in FY: 2017.

As earlier indicated, given the weaker income generation, the bank’s performance became hinged on efficiency. Firstly, interest expenses declined by 33.3% Y-o-Y, as the bank’s stock of low-cost deposits increased, with interest paid on time deposits declining the most by 61.1%.

Also, cost of risk declined precipitously to 0.9% (FY: 2017: 4.3%), as loan loss expenses moderated by 81.3% Y-o-Y. Meanwhile OPEX fell by 1.0% Y-o-Y even as AMCON cost increased given the new directive to include off-balance sheet exposures in levy calculation.
Consequent on the significant improvement in cost efficiency, the bank’s cost-to-income ratio settled at 49.3% from 52.8% in the prior year. This set the stage for the significant growth in PBT and PAT of 16.2% and 11.3% Y-o-Y to N231.7bn and N193.4bn respectively. Following this, ROE and ROA expanded to 23.7% and 3.2% from 21.4% and 3.1% respectively.

Asset Quality
The bank’s non-performing loans ratio increased to 5.0% from 4.7%, even with the decline in gross loans, which is indicative of increasingly risky environment. We expect a moderation in NPL by FY: 2019, in line with management’s guidance of 4.9%. Also, given the expectation of moderate growth in loans and advances, cost of risk should remain restrained. We forecast CoR to settle at 1.0% for FY: 2019.

Liability and Funding Mix
As earlier noted, the bank’s CASA (current and savings accounts) – low cost deposits – increased during the year, settling at 87.5% from 83.3% in the preceding year as the bank drove its retail strategy. This is quite impressive and was the major driver of the bank’s impressive earnings performance.

We do not see significantly better headroom for growth here as the funding of long-term assets will need more stable funding base.

Liquidity and Capital Adequacy
The bank recorded strong capital adequacy (25.0%) and liquidity (72.0%) ratios at FY: 2018. There was a moderation in the bank’s CAR from 27.0% in the preceding year, adduced to initial IFRS9 adjustment for the new ECL model for impairment recognition.

There is expected to be a moderation in CAR as the bank expands its loan book. On the other hand, liquidity ratio increased from 69.7% in the preceding year. In line with the expectation of relatively increased risk asset creation, we expect a moderation of LR in FY: 2019.

Valuation and Outlook
We are encouraged by the bank’s much improved efficiency, which we forecast will be a platform for strong future financial performances.

Hence, we expect the bank’s position in investment securities will be extended, which should support interest income growth, given the relatively attractive yield environment.

Afrinvest Research

Fintech Platform TeamApt Closes $5.5m Series A Round

Business Journal

28/02/2019

TeamApt Product

TeamApt, a Nigerian fintech company that provides digital solutions and payment infrastructure for Africa, has closed on a $5.5million Series A round, led by Quantum Capital Partners.

The Lagos-based company is a leader in the development of Digital Banking, Digital Business solutions and running Payment Infrastructure for Africa.

Yesterday’s announcement will see the company scale more aggressively into additional markets, whilst deploying investment into further product development, talent acquisition and expansion of its internal operations.

Working with 26 African banks, and 100% of all commercial banks in Nigeria, including Zenith, ALAT, UBA and Diamond Bank, TeamApt builds white-labeled products, to ensure digital financial transactions are easier, faster, cheaper and safe.

Since its launch in 2015, TeamApt has focused on its mission to create financial happiness for Africans through technology, and so far has on-boarded 100,000 Nigerian businesses, serving 3M customers across Africa’s largest economy and is currently processing monthly transactions of $160 million. The company has recorded revenue growth of 4,500% over a three year period.

With a team of 40+ developers, TeamApt is an engineer-led company that was built to solve inefficiencies in Nigeria’s growing digital financial services market, at scale, using automation and has deployed over 55 tailored solutions to banks. The company’s flagship product is Moneytor an end-to-end omni-channel digital banking solution for financial institutions to fast track digital transformation processes with web and mobile interfaces.

Tosin Eniolorunda, Founder and CEO of TeamApt said “Banking on the continent is changing at a rate never seen before by Africa’s financial institutions. Innovation and technology are no longer nice-to-haves, but must-haves, as both businesses and customers demand convenient, quick, and easy services from their banks. Every financial provider is under pressure to provide seamless and cost-effective digital solutions. Our engineers are building platforms that promote simplicity in how banks and businesses are run – and we continue to forge ahead building products that are becoming part of the very fabric of Africa’s banking infrastructure.

“We are now several steps further to building a symbiotic and frictionless digital banking ecosystem connecting not only Nigeria but Africa and creating technology for financial happiness for Africans”.

According to the Central Bank of Nigeria (CBN), the total value of electronic e-payment transactions recorded in 2017 rose by 32.5 percent to N83.1 trillion (approximately $229 billion) in 2017 from N62.7 trillion (approximately $176 billion) recorded in 2016, demonstrating the immense potential available in the market.

The company is also set to launch its first consumer-facing product, which is currently in beta. Aptpay is a payment infrastructure product that will centralize all services currently used on banking mobile apps. This will allow for self-reconciliation for customers, unlike via current transfer gateways which require reconciliation, providing a one-stop system from which all banking transactions [bill payments, transfers, direct debits and more] – are powered through a single platform. The platform will also be tailored towards curbing financial fraud.

According to Elaine Delaney, Co-Founder of Quantum Capital Partners, “Quantum Capital Partners was an early adopter of Fintech and Instech solutions within its portfolio of financial services investments. We sought to partner with TeamApt to leverage the significant opportunities within the African financial services landscape to optimize financial inclusion across the continent. TeamApt’s ability to continuously innovate with a strong focus on customer delivery driven by an impressive management team were the key elements that supported our investment thesis.”

Bearish Run Sustained on Large Sell-Offs… ASI Down 1.6%

Business Journal

28/02/2019

The local bourse continued its bearish run as the All Share Index (ASI) declined 1.6% to close at 31,721.76 points dragged by sell offs in GUARANTY (-6.9%), NESTLE (-2.0%) and ZENITH (-4.0%).

Consequently, the market capitalisation reduced to N11.8tn as investors lost N194.8bn while YTD gain dipped to 0.9%.

However, activity level was mixed as volume traded decreased slightly by 9.7% to 411.7m units while the total value traded surged 96.6% to N5.3bn. GUARANTY (44.6m units), ACCESS (29.7m units) and UBN (27.6m units) were the top traded stock by volume while the top traded value were GUARANTY (N1.6bn), NESTLE (N946.7m) and DANGCEM (N634.7m).

Industrial Goods Index Emerges Lone Gainer
Performance across sectors was largely bearish as all indices save for the Industrial Goods index closed in the red. The Industrial Goods index inched higher, up 0.9% due to bargain hunting in DANGCEM (+1.5%) following its impressive FY: 2018 results.

The Banking index led laggards, down 4.6% based on sell-offs in GUARANTY (-6.9%) and ZENITH (-4.0%). In the same vein, the Consumer Goods index dipped 2.0% as NESTLE (-2.0%) and NIGERIAN BREWERIES (-4.5%) posted another consecutive day of losses.

Similarly, the Oil & Gas and Insurance indices declined 1.6% and 1.0% respectively due to price depreciation in OANDO (-9.7%), REGALINS (-7.4%) and AIICO (-5.2%).

Investor Sentiment Remains Weak
Investor sentiment as measured by the market breadth (advance/decline ratio) stood at 0.3x as 9 stocks advanced against 30 decliners. LIVESTOCK (+7.9%), UNIONDAC (+7.1%) and UAC-PROP (+4.9%) were the top performers while OANDO (-9.9%), FCMB (-9.8%) and DANGFLOUR (-8.8%) were the worst performers.

In our view, the current bearish sentiment in the market are based on sell-offs triggered by foreign portfolio investors. We however note that these pressures present buying opportunities in fundamentally sound stocks; nonetheless, we expect a bearish close tomorrow as investor sentiment remains weak.

MTN, Eseye Partner to Deliver Globally Connected IoT Cloud Solution

Business Journal

28/02/2019

Eseye, a global provider of IoT services has announced a partnership with MTN, the leading Africa Mobile Network Operator (MNO). MTN have joined forces with Eseye and the AnyNet Federation, a new association of MNOs established specifically to meet the complex management and enhanced resilience requirements of the rapidly expanding global M2M IoT customer base.

Global Growth for Cellular onto AWS
The AnyNet Federation will initially focus on delivering significant global growth of cellular services onto Amazon Web Services (AWS) Cloud. It aims to make the complex global landscape for IoT easier for AWS customers, by delivering a single cellular M2M solution that can be deployed seamlessly across major world markets.
Nick Earle Eseye Chairman & CEO said: ‘This is a ground-breaking global collaboration. The AnyNet Secure is already the most feature rich and integrated connectivity solution for AWS, and the AnyNet Federation as a key way of delivering simplified connectivity on a global scale, whilst allowing customers buy and manage their connectivity from within AWS.”
MTN Group Enterprise Executive, Oliver Fortuin said: “MTN is delighted to bring their networks across 12 markets to the support the objectives of the AnyNet Federation. We believe that through collaboration we can speed up the deployment of our customers’ global IoT and enhance their global business opportunities”

A Global Data Clearing House
Using Eseye’s next generation, fully eUICC compliant AnyNet Secure for AWS SIM card, AnyNet Federation member customers will experience “out of the box” connectivity that integrates onto AWS IoT Core and is globally scalable.

Cellular traffic destined for AWS is passed between different
AnyNet Federation partners based on the geographic location of IoT devices that are automatically provisioned and certified over-the-air. Regardless of which AnyNet Federation partner is delivering the data, the customer is billed through their account by AWS, and the MNO is paid for the services it delivers.

IoT Market Trends
The launch of the AnyNet Federation and its initial AWS market focus comes as Gartner forecast, the Worldwide Public Cloud Services Market will grow by 17.3% in 2019 to total $206.2B, up from $175.8B in 2018; and Statista state that 80% of enterprises are both running apps on or experimenting with AWS as their preferred cloud platform.

GE Healthcare, NSIA Partner to Fight Cancer in Nigeria

Business Journal

28/02/2019

GE Healthcare has partnered with the Nigeria Sovereign Investment Authority (NSIA) to supply latest technology in computed tomography (CT), Discovery RT, to Lagos University Teaching Hospital for its modern NSIA- LUTH Cancer Center, commissioned by President Muhammadu Buhari.
The Discovery RT, a simulation CT machine, is the first of such technology to be installed in the country. It enables physicians to study the body in detail allowing them to determine the exact location, shape, and size of the tumor to be treated.

As part of the partnership, GE Healthcare will also provide servicing of the equipment and deliver hands-on training for the hospital’s radiology staff on the new technology.
Nigeria currently has eight public and one private comprehensive cancer care centers to serve its growing population of over 180 million people. Many of the public cancer centers have radiotherapy machines that are outdated, making access to radiation therapy more difficult for cancer patients.

The new Radiotherapy Centre will increase access to quality services for the patients across Lagos state. This will help early detection and treatment of cancer, which improves chances of it being cured.
“For many years, GE Healthcare has developed tools that help improve the care of patients through advanced technologies that facilitate the diagnosis as well as help the fight against diseases such as cancer. We are happy to collaborate with NSIA in this landmark achievement for Nigeria in progressing the availability of world-class radiotherapy for cancer patients in the region. This will help improve the overall results in the fight against cancer, as well as in improving the quality of life”, said Eyong Ebai, General Manager for West Central and French Sub-Sahara Africa at GE Healthcare.
The World Health Organisation (WHO) projects that by 2030, between 10 and 11 million cancers will be diagnosed in low and middle-income countries.

ALSF Trains African Lawyers on Negotiating Economic Deals

Business Journal

28/02/2019

The African Legal Support Facility has completed a two-day workshop for African lawyers and government negotiators, aimed at strengthening their capacity to negotiate complex deals involving investments in key economic sectors.
The workshop, co-organised with the African Business Law Firms Association (ABFLA) under the African Legal Support Facility Academy, was held in Accra, Ghana, from 14-15 February, 2019. Forty government negotiators and 30 lawyers in private practice representing public and private organizations across Africa attended the workshop.
In his opening remarks, Stephen Karangizi, Director and Chief Executive Officer of the African Legal Support Facility said the topics covered were “carefully chosen to fill identified knowledge gaps between lawyers’ academic training and legal practice.”
Participants benefited from a wide array of rich legal contributions and content on the techniques needed to successfully negotiate sustainable and equitable investment agreements for projects in the energy, mining, oil and gas sectors.

The negotiation and legal intricacies of infrastructure projects and public-private partnerships were also covered. Participants and government officials attending the workshop commended the initiative, stating that the skills acquired were relevant and vital for the effective and efficient discharge of their professional duties and official responsibilities.
Karangizi observed that the academy’s curriculum was co-developed by the African Legal Support Facility, national and regional bar associations, including the Southern African Development Community Lawyers Association (SADCLA), the East African Law Society (EALS) and the International Training Centre in Africa for Francophone Lawyers (CIFAF) based in Cotonou, Benin.

The academy’s capacity building initiative is also accessible virtually via a portal with learning tools and documentation sourced from the ALSF library.
The Accra workshop was also an opportunity for the ALSF to call on Regional Member Countries to contribute to the financial resources of the ALSF – all in a bid to strengthen its capacity to support African countries with their creditor litigation and negotiations for complex commercial transactions.
Similar ALSF Academy sessions were held in Kigali, Rwanda, and Cotonou, Benin, in October and November 2018.

‘Linkage Assurance Financially Strong to Deliver Quality Services’

Business Journal

27/02/2019

Linkage Assurance Financially Strong to Deliver Quality Services — L-R: Bola Onigbogi, Deputy President, Nigerian Council of Registered Insurance Brokers (NCRIB); Sola Tinubu, President, NCRIB; Daniel Braie, Managing Director/CEO, Linkage Assurance Plc; Joyce Ojemudia, General Manager, Marketing, Linkage Assurance Plc; and Okanlawon Adelagun, Executive Director, Technical, Linkage Assurance Plc during the February Edition of the Members Evening of the NCRIB held in Lagos.

Underwriting firm, Linkage Assurance Plc is financially strong and able to deliver qualitative insurance services that will meet the expectation of customers, Mr. Daniel Braie, Managing Director/CEO of the company said in Lagos.

Mr. Braie who addressed the insurance brokerage fraternity at their February 2019 Members Evening said the Board and Management of Linkage Assurance Plc is excited to present to the group a competitive brand to partner with.

Linkage Assurance Plc played host to the Members Evening held at the Nigerian Council of Registered Insurance Brokers (NCRIB) Secretariat in Alagomeji Yaba, Lagos.

Braie told the brokers led by its President Mr. Sola Tinubu that Linkage Assurance Plc has strengthened its internal structures to deliver quality and efficient services.

“We have strengthened our internal structures to ensure that claims are handled with speed, because we realise that this is the main reason we are in business, and we will ensure it is sustained”

According to Braie, the human capital structure of the company has also been beefed up with the recent appointment of the Executive Director, Technical, among others who are already adding value to our operations and systems, for the benefit of our esteemed customers, he said.

“We have also increased our capacity to do more volume businesses as evidenced by the increase in our reinsurance treaty across all classes of insurance”.

The company total assets stood at N23.31 billion at the end of 2017, moving up by 15 percent from N20.33 billion in the previous year.

Linkage has developed array of retail products targeted at deepening penetration and increase revenue. These include the Linkage Third Party Plus, which is a budget friendly motor insurance that provides not only the compulsory Third party protection but an additional Own damage protection to the tune of N250, 000, and is only available in the company”.

Other products launched by the Company are the Linkage SME Comprehensive, Citadel Shield (which provides compensation as a result of injuries from accident for pupils and students in recognized academic establishments); Linkage Events Xclusive Insurance, Linkage Shop Insurance, Purple Motor Plan (comprehensive motor cover exclusively for women), and the Linkage Estate Insurance.

Linkage has also deployed its online portal to make its products and services available to customers especially the digital savvy customers and enterprises.

Linkage Assurance Plc was incorporated on 26th March, 1991 and was licensed to cover and transact non-life insurance businesses on 7th October, 1993.

Emirates Skywards Feted at Loyalty Awards 2019

Business Journal

27/02/2019

For the second consecutive year, Emirates Skywards, the loyalty programme of Emirates and flydubai, was presented with the accolade for ‘Excellence in Management’ at the Loyalty Awards 2019 dinner held in Paris on 19 February, 2019.

The award was collected by Dr. Nejib Ben Khedher, Senior Vice President, Emirates Skywards.

The awards ceremony was organised during the 15th edition of the Loyalty & Awards Conference by Global Flight, a leading independent management company focusing on customer loyalty and loyalty programmes in the travel industry.

In 2018, Emirates Skywards was recognised for its use of data science to optimise member engagement through relevant and timely offers.

This year Emirates Skywards earned top honours for continuing to take personalisation to the next stage by introducing its industry-first, dynamic flight upgrade and Cash+Miles promotions for members who log in and book their flights via Emirates.com.

The targeted offers which are easy to access and positioned visibly during the booking experience, are driven by over 150 parameters linked to the member’s loyalty status and flight selection. The system will be further enhanced in the coming months with the use of advanced predictive modelling and artificial intelligence as well as by making this functionality available on Emirates’ mobile channels.

“A core principle that drives the Emirates Skywards loyalty programme is to constantly enhance the value that our members can derive from their Miles by evolving our propositions. To this end, our ‘in-path’ offers available when booking on Emirates.com provide an attractive opportunity for members to realise tangible savings when using their Miles to access upgrade rewards and purchase Cash+Miles tickets. Since launch in 2018, we’ve witnessed considerable growth in engagement with members redeeming nearly 1.5 billion miles on these offers,” said Dr Nejib Ben Khedher.

Emirates Skywards currently has a global base of over 23 million members. Over the last 12 months, the programme has significantly broadened its value proposition to members by offering not only more opportunities to earn Miles but also combining them with more avenues to utilise Miles.

In addition to expanding the programme, Emirates Skywards is also enriching its content on digital channels by leveraging the Emirates app to better communicate opportunities to earn and spend Miles to members.

Last month, Emirates Skywards inaugurated its new one stop customer touch point in Terminal 3 at Dubai International Airport (DXB).

The Emirates Skywards Centre is open to both new and existing members of the loyalty programme and will provide assistance across a wide range of services including programme enrolment, profile creation, partnership awareness and consultation on all Skywards Miles related enquiries.

About Emirates Skywards

Emirates Skywards, the award-winning loyalty programme of Emirates and flydubai, offers four tiers of membership – Blue, Silver, Gold and Platinum – with each membership tier providing exclusive privileges. Emirates Skywards members earn Skywards Miles when they fly on Emirates, flydubai or partner airlines, or when they use the programme’s designated hotels, car rentals, financial, leisure and lifestyle partners. Skywards Miles can be redeemed for an extensive range of rewards, including tickets on Emirates or flydubai plus Emirates Skywards partner airlines, hotel accommodation, excursions and exclusive shopping.

MainOne, Facebook Unveil Open-access Fiber Network in Nigeria

Business Journal

27/02/2019

MainOne has announced a metro fiber infrastructure project in two states of Nigeria, with support from Facebook. The infrastructure collaboration is part of Facebook’s efforts to connect more people to Broadband Internet.

As part of this project, MainOne is building and operating approximately 750 km terrestrial fiber infrastructure in Edo and Ogun States, two of Nigeria’s fastest growing states.
These open-access transport networks will provide metro fiber connectivity to reach more than 1,000,000 people in Benin City, Abeokuta, Sagamu and 10 other towns by connecting mobile operators’ base stations, Internet Service providers, Points of presence (POPs), and public locations including schools and hospitals.

This partnership will leverage MainOne’s strength as a wholesale Telecoms Infrastructure service provider with investment from Facebook and support from local regulatory and state authorities to further deepen broadband penetration in Nigeria.
Speaking on the partnership, Ibrahima Ba, Network Investments Lead for Emerging Markets at Facebook, said: “We are working closely with MainOne and other partners to accelerate broadband deployment. In Nigeria, we are bringing together Facebook’s learnings from scaling our global infrastructure with MainOne’s knowledge of the local environment to develop and test new working models for multiple operators to access common infrastructure.”
Funke Opeke, MainOne’s Chief Executive Officer, lauded the collaboration and the commitment of Facebook and authorities in Nigeria to improving broadband penetration across the country. Commenting on the partnership, she added:

“MainOne has always been committed to broadband innovation, job creation, as well as growing the digital economy of West Africa. We believe that this partnership and the open-access network we have developed will be beneficial to improving the quality of access and accelerating the digital transformation in Ogun and Edo States.”

“Our future lies in regional integration. We need resources to move forward,” say Central Africa Governors

Business Journal

27/02/2019

Akinwumi Adesina President African Development Bank

Bank Group Governors for Central Africa came to attend a consultative meeting during which they had fruitful discussions with the senior management

ABIDJAN, Ivory Coast, February 27, 2019/ — “Your presence at the Bank’s headquarters matters. So is your voice. It is encouraging hearing you,” says Akinwumi Adesina, President of the African Development Bank (www.AfDB.org), addressing the institution’s Governors for Central Africa, on 26 February in Abidjan.

Like their West Africa counterparts on Monday, Bank Group Governors for Central Africa came to attend a consultative meeting during which they had fruitful discussions with the senior management. They came from all parts of the central African region: Cameroon, Congo, Gabon, the Democratic Republic of the Congo (DRC), the Central African Republic (CAR), Chad and Equatorial Guinea, to review national and regional projects and, with the Bank’s leaders, to lay the foundations for further development of their region.

African Development Bank Vice-President and Chief Economist, Célestin Monga gave an economic overview of the continent and more specifically of Central Africa, highlighting the main challenges to inclusive growth, peace and security, sound macroeconomic management and stability, the development and strengthening of basic infrastructure, and effective regional integration. He also emphasised the need for the States of the region to diversify their economies through agribusiness, fisheries and livestock. Gabon’s Governor, Hilaire Machima echoed this view: “This policy is already bearing fruit, since the government of my country has been working for several years on processing wood within the country. There are currently some 80 wood-processing companies in Gabon.”

The Bank’s Director General for Central Africa, Ousmane Doré, spoke of the significant impact Bank-financed projects have on people’s lives. “The Bank’s commitments in the region totalled $13 billion in 2018, through 531 operations in all,” he said, adding that 2019 would be a year of even deeper cooperation with the region and citing several major projects financed by the Bank. Thanks to the African Development Fund, four of the seven countries of the region – Cameroon, the CAR, Republic of Congo, and Chad – have been connected by a road corridor in under ten years. These links have enabled a fivefold reduction in transport costs between production and consumption areas. Another example is the programme to facilitate transport between Douala (Cameroon), Bangui (CAR) and Ndjamena (Chad), allowing trade to develop in the area and outside the CEMAC zone, and further improving the efficiency of the transport logistics chain.

In the energy sector, two projects have come to fruition, one in Kribi in Cameroon and the other, the interconnection of power grids between the CAR and the DRC. The ‘Central African Backbone’ fibre optic project in Cameroon, DRC and CAR aims to improve connectivity, e-banking and the information provision on markets and the business climate. The Bank has also financed a project to improve the drinking water supply in the city of Libreville, Gabon. During the Africa Investment Forum last year, the African Development Bank, Africa50 and other partners concluded a $500 million funding agreement for the construction of the first road-rail bridge to connect two Congolese neighbours, Republic of Congo, and the DRC.

To highlight the importance to the Bank of a general capital increase, Vice-President for Finance, Swazi Tshabalala cast her mind back to the strategic focus of the first Governors’ meeting held in Rome last year. “The Bank’s ‘High 5’ priorities are at the very heart of Africa’s development programme,” she reiterated.

The Governors unanimously gave the African Development Bank their support. “We have a Bank that innovates. We need significant resources to take Africa and our region forward,” said the Bank Governor for Cameroun, Alamine Ousmane Mey. Bank Governor for Equatorial Guinea, Lucas Abaga Nchama stressed the continent’s enormous development needs, saying that “the [Bank’s] capital increase is important. Our future lies in regional integration”. The Bank Governor for Chad, Issa Doubragne [MOU1] added, “We have every reason to be hopeful.” Concluding, President Adesina said: «We will continue to work hard for the Africa you want. »

Access Bank Issues N15bn 5-Year Green Bond at 15%

Business Journal

25/02/2019

Herbert Wigwe Group MD/CEO Access Bank Plc — Herbert Wigwe, Group MD/CEO, Access Bank Plc

Access Bank Plc is issuing a 5-year Fixed Rate Senior Unsecured Green Bond Issuance of up to N15.0billion which is the first ever Climate Bonds Standard Certified Corporate Green Bond issued in Africa.
According to Afrinvest Research, the net proceeds from the Issue will be applied towards financing/ re-financing identified eligible green assets and projects, duly verified and certified by Climate Bonds initiative (CBi), in line with the global Climate Bonds Standard.

Issuer	Access Bank Plc
Issue Size	Up to ₦15.0bn
Bond Description	5 Year [•] % Fixed Rate Senior Unsecured Green Bonds due 2024
Status of the Notes	Fixed Rate Unsecured Green Bonds
Pricing Guidance	14.90% to 15.10% per annum
Tenor	Five (5) Years
Issuer Rating	‘Aa-’, Agusto & Co Limited
Bond Rating	‘Aa-’, Agusto & Co. Limited
	’B2’, Moody’s
Book Build Opens	Thursday, February 21, 2019
Book Build Closes	Thursday, February 28, 2019
Allocation	Thursday, February 28, 2019
Funding of Commitment	Friday, March 01, 2019
Subscription	Minimum of ₦5,000,000 (i.e. 5,000 units at ₦1,000/unit) and multiples of ₦1,000,000 thereafter
Use of Proceeds	Water – Flood Defense – 84.80%
	Solar – Generation facilities – 11.73%
	Agriculture – 1.27%
	Offer cost – 2.19%
Listing	FMDQ OTC Plc and/or The Nigeria Stock Exchange (NSE)

Post-Election Trading Begins on a Positive Note… ASI up 57bps

Business Journal

25/02/2019

As investors await the results of the 2019 presidential elections, the domestic bourse experienced mild bargain hunting in bellwethers –NIGERIAN BREWERIES (+4.0%), ZENITH (+1.0%) and DANGCEM (+0.1%).

This drove the All Share Index (ASI) 57bps higher to 32,700.12 points, YTD gain inched to 4.0% while market capitalisation improved slightly by N68.8bn to settle at N12.2tn. Activity level was however mixed as volume traded decreased 0.4% to 219.7m units while value traded increased 147.7% to N5.5bn.

NIGERIAN BREWERIES (42.7m units), DIAMOND (30.8m units) and ACCESS (20.7m units) led the top trades by volume while by value NIGERIAN BREWERIES (N3.6bn), GUARANTY (N733.9m) and ZENITH (N337.0m) led.

Bullish Sector Performance
Across sectors, performance was bullish as all indices under our coverage trended northward. The Consumer Goods index led gainers, up 1.3% on the back of buying interests in NIGERIAN BREWERIES (+4.0%) and DANGFLOUR (+10.0%).

The Insurance and Banking indices trailed appreciating 1.1% and 0.8% due to gains in NEM (+3.4%), SOVRENINS (+8.7%), ZENITH (+1.0%) and UBA (+2.5%). In the same vein, the Oil & Gas index advanced 0.1% as MOBIL (+1.1%) and OANDO (+1.5%) closed in the green.

Lastly, the Industrial Goods index closed flat with a bullish bias as investors took advantage of bargain opportunities in DANGCEM (+0.1%) towards the end of yesterday’s session.

Investor Sentiment Strengthens
Investor sentiment as measured by the market breadth (advance/decline ratio) strengthened to 3.1x from 1.2x recorded the prior Friday as 25 stocks advanced against 8 decliners.

The top performers today were DANGFLOUR (+10.0%), ABCTRANS (+9.6%) and VERITASKAP (+9.5%) while UNIONDAC (-6.5%), TOTAL (-2.6%) and CUTIX (-1.6%) led laggards.

We observed cautious trading in yesterday’s trading session as investors await the results of the 2019 presidential elections. We expect market direction this week to be largely determined by the outcome of the election.

Ecobank Empowers Businesses with Omni Lite Solution

Business Journal

25/02/2019

The Managing Director of Ecobank Nigeria, Mr. Patrick Akinwuntan, has reaffirmed that the bank’s recently upgraded online banking platform for businesses, Omni Lite, is versatile, secure and user friendly.

He urged business owners to take advantage of the services available on the platform which has been specifically optimised for them. Those in the commercial sector such as small and medium enterprises (SMEs), faith-based organisations, educational institutions, Non-governmental Organisations and government institutions etc can manage their transactions effectively and access an array of tailor-made solutions designed to empower their businesses.

According to Akinwuntan, Omni Lite is primarily designed with business owners in mind. It comes with features to enhance businesses such as efficient and seamless cash flow management, easy view of all accounts and expenses in one place, convenient salary payment with bulk payments upload, management of loan payments, exchange rates calculation and other interesting features.

Further, Akinwuntan noted that with Omni Lite, customers have access to real-time transaction details, domestic and interbank funds transfers and online loan requests. The platform comes with best in its class security tools to ensure that users are protected.

He enjoined business owners to register for Ecobank Omni Lite and discover how the platform can help grow and manage their businesses.

Maersk Accelerates Transformation, Earns $39bn in 2018

Business Journal

25/02/2019

Progress on the transformation of A. P. Moller – Maersk continued in 2018. Customers benefitted from integrated offerings, digital solutions and robust network improvements. Since 2016, the top-line has grown by 43%, to $39bn in 2018, an additional $12bn in turnover.

“In 2018, we made significant progress in implementing our strategy. With the expected demerger and listing of Maersk Drilling in April, the separation of our Energy-related businesses will be almost complete. We have successfully integrated Hamburg Süd, accelerated our digital transformation and come together across sales, customer service, delivery and products as one company with customers at the centre of our attention. We are starting to see growth both in Ocean and non-Ocean segments,” said Søren Skou, CEO of A.P. Moller – Maersk.

Profitability was in line with the latest guidance for 2018, with earnings before interests, tax, depreciation and amortization (EBITDA) of USD 3.8 billion, up 8% over 2017. The improvement in operating earnings was driven by higher freight rates, efficiencies gained from the integration of continuing operations, and synergies from the acquisition of Hamburg Süd.

However, margins in continuing operations were challenged and EBITDA was lower than initially expected at the beginning of the year, primarily due to an increase in bunker fuel prices not fully recovered by higher freight rates.

“Although we had a challenging start to 2018, looking at our financial performance, we increased earnings despite significantly higher bunker fuel prices and lower than expected container volume growth in the second half of 2018. However, profitability needs to improve,” said Søren Skou. During 2018, net interest-bearing debt was significantly reduced from USD 14.8 billion to USD 8.7 billion and the company remains investment grade rated.

Following the listing of Maersk Drilling through a demerger and subject to maintaining investment grade rating, details on future dividend policy, capital structure and the distribution of a significant part of the proceeds from the sale of Maersk Oil will be announced no later than August 2019.

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