Vetiva Capital Management

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Coverage

Export
Ticker Underlying First Report Latest Report
10CM ZAE000042164 MTN Group Ltd. 2018/03/26 2018/03/26
A1C8BZ NGDANGCEM008 Dangote Cement PLC 2016/04/26 2018/07/11
ACCESS NGACCESS0005 Access Bank 2016/03/18 2018/04/26
AP NGAP00000004 Forte Oil 2017/10/16 2018/09/11
CCNN NGCCNN000003 Cement Company of Northern Nigeria PLC 2016/03/30 2018/09/20
CILEASING NGCILEASING2 C&I Leasing PLC 2018/07/06 2018/07/06
DANGSUGAR NGDANSUGAR02 Dangote Sugar Refinery Plc 2016/03/18 2018/05/04
DIAMONDBNK NGDIAMONDBK6 Diamond Bank Nigeria Plc 2016/04/28 2018/09/04
ETERNAOIL NGETERNAOIL1 ETERNA OIL AND GAS PLC 2018/08/24 2018/08/27
FCMB NGFCMB000005 First City Monument Bank Plc 2016/08/01 2018/07/27
FIDELITYBK NGFIDELITYB5 Fidelity Bank Plc 2018/08/24 2018/08/24
FIRSTBANK NGFBNH000009 FBN Holdings PLC 2016/04/26 2018/09/13
FLOURMILL NGFLOURMILL0 Flour Mills Nigeria PLC 2016/07/25 2018/09/17
GUARANTY NGGUARANTY06 Guaranty Trust Bank PLC 2016/03/14 2018/09/12
GUINNESS NGGUINNESS07 Guinness Nigeria PLC 2016/03/14 2018/08/31
IBTC NGSTANBIC003 Stanbic IBTC Holding Co 2016/12/23 2018/04/16
JBERGER NGJBERGER009 Julius Berger 2016/03/16 2018/08/01
MOBIL NGMOBIL00007 11 PLC 2016/03/31 2018/04/10
NB NGNB00000005 Nigerian Breweries 2016/04/21 2018/09/05
NESTLE PK0025101012 Nestle Milk Pak Ltd. 2016/03/16 2018/08/01
NIGERINS NGNIGERINS04 Niger Insurance PLC 2018/08/10 2018/08/10
OANDO NGOANDO00002 Oando PLC 2016/08/05 2016/11/07
OKOMUOIL NGOKOMUOIL00 Okomu Oil Palm Co Plc 2016/07/28 2018/05/17
PRESCO NGPRESCO0005 Presco PLC 2018/04/24 2018/05/15
PRESTIGE NGPRESTIGE00 Prestige Assurance Co PLC 2018/07/06 2018/07/09
PZ NGPZ00000005 PZ Cussons Nigeria PLC 2018/09/03 2018/09/07
PZC GB00B19Z1432 PZ Cussons PLC 2018/04/04 2018/04/04
PZCUY US74734H1005 PZ Cussons PLC ADS 2017/10/05 2017/10/05
SEPL NGSEPLAT0008 Seplat Petroleum Development Company 2016/03/30 2018/09/06
SOVRENINS NGSOVRENINS5 Sovereign Trust Insurance Plc 2018/07/13 2018/07/13
TOTAL NGTOTAL00001 Total Nigeria Plc 2016/04/06 2016/10/27
TRANSCORP NGTRANSCORP7 Transnational Corp of Nigeria PLC 2018/07/13 2018/07/16
UACN NGUACN000006 UAC of Nigeria PLC 2016/04/27 2018/05/04
UBA NGUBA0000001 United Bank for Africa Plc 2016/03/15 2018/08/31
UNILEVER NGUNILEVER07 Unilever Nigeria PLC 2016/04/15 2018/07/20
WAPCO NGWAPCO00002 Lafarge Africa PLC 2016/03/18 2018/09/14
WEMABANK NGWEMABANK07 Wema Bank PLC 2018/07/18 2018/07/25
XOM US30231G1022 Exxon Mobil Corp. 2018/05/11 2018/05/11
ZENITHBANK NGZENITHBNK9 Zenith Bank Plc 2017/08/11 2018/08/23

Analysts

  • Pabina Yinkere

    Head, Vetiva Research
  • Olalekan Olabode

    Financial Reasearch Analyst Years of Experience: 6
  • Tominiyi Ramon

    Industrial Goods Analyst Years of Experience: 4
  • Michael Famoroti

    Chief Economist Years of Experience: 2
  • Ifedayo Olowoporoku

    Consumer Goods Analyst Years of Experience: 2
  • Onyeka Ijeoma

    Industrial Goods, Agriculture Analyst
  • Vetiva Securities

    N/A

The Market Today - 20 September 2018

Coca-Cola planning to increase stake in Chi Ltd                                                 According to Peter Njonjo, President of Coca-Cola’s West African business, the soda giant plans to increase its stake in Chi Limited, makers of Chivita and Hollandia, by Q1’19. We recall that the company acquired a 40% stake in Chi Ltd a couple of years ago, with the intent to increase its holding further down the line. The move is in line with the Group’s strategic plan to expand its portfolio beyond traditional carbonated soda. The group is also looking beyond the ready-to-drink space, recently a...

The Market Today - 19 September 2018

Risk of flooding in Middle Belt raises inflation concerns                                                Nigeria’s food supply could be at risk due to flooding in the nation’s food basket. The National Emergency Management Agency (NEMA) declared a national emergency in four states as water levels rise in the Niger and Benue rivers. The four states are Benue, Anambra, Kogi and Delta, some of which are key producers of Nigeria’s food, and any disruption in the region would affect domestic food supply. This could increase food inflation, which remained high in August as the effects of disruptio...

The Market Today - 18 September 2018

New Finance Minister reiterates revenue challenges                                                   In her inaugural address as Acting Minister of Finance, Mrs. Zainab Ahmed highlighted the revenue challenges that continue to hold Nigeria back. The country remains too reliant on oil prices which, though currently high, are volatile and outside the government’s control. The minster also stated that the Ministry of Finance has tried to boost internally generated revenues, particularly by improving Nigeria’s tax generation. The country has one of the lowest tax-GDP ratios in the world (6%) and ...

Breakfast Report - 17 September, 2018

The Week Ahead                                                                             Brent crude prices dipped early on Monday, falling to $77.39/bbl (Friday close: $78.26/bbl) as fears of a shortage abated after data at the end of the previous week showed an increase in oil supplies. Furthermore, additional U.S. tariffs of $200 billion on Chinese imports expected this week have cast a cloud over oil demand in the latter part of the year. However, these factors are being upset by persistent concerns over sanctions on Iranian exports, with India, Iran’s second largest buyer, announcing a...

Weekly Market Wrap - 14 September 2018

Bourse snaps seven day losing streak at week close                                                       Bargain hunters supported a 95bps recovery on the equity market at week close. However, this was unable to offset much stronger earlier losses that saw the All-Share Index shed 502bps w/w. Gains on the bourse were supported by the Banking sector (d/d: +279bps; w/w: -435bps) as last minute buying interest in ZENITHBANK (d/d: +230bps; w/w: -407bps) and GUARANTY (d/d: +546bps; w/w: -71bps) helped trim losses. Also, the Consumer Goods sector (d/d:+56bps; w/w:-537bps) recovered modestly today a...

Michael Famoroti

Nigeria Gross Domestic Product - Q2'18: Economic Growth Slows Amid Agriculture Concerns

Economic growth slows amid agriculture concerns                                                                          Compared to Vetiva and Consensus estimates of 1.6% and 2.0% respectively, Nigeria’s reported Q2’18 real GDP growth of 1.5% is disappointing. Although our estimate was close to the reported figure, the composition of GDP growth in the period is somewhat surprising. There was a more marked slowdown in agriculture and oil production than we had anticipated, growth in the services sector was robust and the pace of industrial activity slowed, even though we had expected Manufact...

The Market Today - 26 July 2018

CBN plans more private sector credit despite hawkish tune                                                        Having corroborated the argument that a reduction in policy rate would not necessarily translate to increased credit to private sector, owing to structural impediments, the MPC highlighted key steps the CBN should take in a bid to stimulate credit expansion to the economy. Particularly, the Committee hinted that the CBN would provide direct credit intermediation by purchasing commercial papers issued by large corporations – on a need basis – and also implemented a differentiated dy...

Nigeria_Fixed Income Daily: Buoyant liquidity drives investor demand

§In line with recent liquidity mop up stance, CBN conducted OMO auctions in today’s session, offering N100 billion and N50 billion on the 191DTM and 282DTM bills. The CBN eventually sold N198 billion and N7 billion on the 191DTM (effective yield: 19.87%) and 282DTM (effective yield: 20.91%) bills amidst strong subscription numbers. Despite this, Interbank Call rate moderated significantly to 8.21% (previous: 26.67%) on the back of liquidity inflows from today’s bond maturity (c. N581 billion). At the FX interbank market, the naira appreciated N3.69 to close at N313.65. §In today’s session, fix...

The Market Today - 20 September 2018

Coca-Cola planning to increase stake in Chi Ltd                                                 According to Peter Njonjo, President of Coca-Cola’s West African business, the soda giant plans to increase its stake in Chi Limited, makers of Chivita and Hollandia, by Q1’19. We recall that the company acquired a 40% stake in Chi Ltd a couple of years ago, with the intent to increase its holding further down the line. The move is in line with the Group’s strategic plan to expand its portfolio beyond traditional carbonated soda. The group is also looking beyond the ready-to-drink space, recently a...

The Market Today - 19 September 2018

Risk of flooding in Middle Belt raises inflation concerns                                                Nigeria’s food supply could be at risk due to flooding in the nation’s food basket. The National Emergency Management Agency (NEMA) declared a national emergency in four states as water levels rise in the Niger and Benue rivers. The four states are Benue, Anambra, Kogi and Delta, some of which are key producers of Nigeria’s food, and any disruption in the region would affect domestic food supply. This could increase food inflation, which remained high in August as the effects of disruptio...

The Market Today - 18 September 2018

New Finance Minister reiterates revenue challenges                                                   In her inaugural address as Acting Minister of Finance, Mrs. Zainab Ahmed highlighted the revenue challenges that continue to hold Nigeria back. The country remains too reliant on oil prices which, though currently high, are volatile and outside the government’s control. The minster also stated that the Ministry of Finance has tried to boost internally generated revenues, particularly by improving Nigeria’s tax generation. The country has one of the lowest tax-GDP ratios in the world (6%) and ...

Breakfast Report - 17 September, 2018

The Week Ahead                                                                             Brent crude prices dipped early on Monday, falling to $77.39/bbl (Friday close: $78.26/bbl) as fears of a shortage abated after data at the end of the previous week showed an increase in oil supplies. Furthermore, additional U.S. tariffs of $200 billion on Chinese imports expected this week have cast a cloud over oil demand in the latter part of the year. However, these factors are being upset by persistent concerns over sanctions on Iranian exports, with India, Iran’s second largest buyer, announcing a...

The Market Today - 14 September 2018

August inflation expected to reverse direction                                                 Nigeria’s inflation data for August is scheduled to be released by the National Bureau of Statistics (NBS) at 12pm today and we anticipate a slight uptick in inflation from 11.1% to 11.2% (Consensus: 11.1%). This increase is despite an expected drop in month-on-month inflation from 1.1% to 1.0% and comes amid weakening base effects as we move further into H2’18. We reiterate our view that inflation is likely to rise in the second half of the year as weaker base effects are met with resurgent food pr...

Weekly Market Wrap - 14 September 2018

Bourse snaps seven day losing streak at week close                                                       Bargain hunters supported a 95bps recovery on the equity market at week close. However, this was unable to offset much stronger earlier losses that saw the All-Share Index shed 502bps w/w. Gains on the bourse were supported by the Banking sector (d/d: +279bps; w/w: -435bps) as last minute buying interest in ZENITHBANK (d/d: +230bps; w/w: -407bps) and GUARANTY (d/d: +546bps; w/w: -71bps) helped trim losses. Also, the Consumer Goods sector (d/d:+56bps; w/w:-537bps) recovered modestly today a...

Michael Famoroti

Inflation Notes (Post-Release) August Inflation Review - Inflation Matches Expectation, Further Rises Ahead

Inflation rose from 11.1% y/y in July to 11.2% y/y in August, in line with Vetiva estimate but ahead of Conesus expectation of 11.1% y/y. Meanwhile, month-on-month (m/m) inflation moderated slightly—from 1.1% to 1.0%, indicating that the rise in headline inflation was as a result of a lower August 2017 base. Across the sub-indices, Core inflation registered at 10.0% y/y (July: 10.2% y/y) and 0.8% m/m (July: 0.8% m/m) whilst Food inflation remained flat at 1.4% m/m but rose from 12.8% y/y in July to 13.2% y/y in August, the first increase since November 2017, showing the effect of persistent fo...

Michael Famoroti

NIGERIA AUGUST ECONOMIC REPORT - Little To Cheer As Election Season Looms

Little to cheer as election season looms                                                                               Data released in August showed the frail state of the economy. Nigeria’s economy grew by just 1.5% y/y in Q2’18, below Vetiva and Consensus estimates of 1.6% and 2.0% respectively, dragged by a slump in agriculture output. The sector grew at just 1.2% y/y in the quarter, the slowest in 25 years, hinting at the economic repercussions of the violence in the Middle Belt which worsened at the turn of the year. The inflation picture was likewise underwhelming as consumer prices ro...

Michael Famoroti

NIGERIA JULY ECONOMIC REPORT - H2 Kicks Off With Notable Political Changes

H2 kicks off with notable political changes                                                                          Despite Purchasing Managers’ Index numbers indicating steady economic momentum at the start of the quarter, July brought early warning signs of the challenges the Nigerian economy could face in the rest of the year. Annual inflation moderated once again in June, but the m/m pace accelerated further (from 1.1% to 1.2%) as food price pressure intensified. This triggered a more hawkish Monetary Policy Committee (MPC) stance than expected as 3 of 10 members actually voted to hike i...

Michael Famoroti

NIGERIA PMI - Steady economic growth as PMI reaches 37 states

Steady economic growth as PMI reaches 37 states                                                                           The Central Bank of Nigeria (CBN) released July Purchasing Managers’ Index data, showing that economic momentum in the country is little changed month-on-month. Whilst the manufacturing sector expanded at a slower pace (from 57.0 to 56.8), the non-manufacturing sector accelerated mildly (from 57.5 to 57.7).                                                                   The manufacturing sector expanded more slowly as all sub-indices save for Supplier Delivery Times de...

Michael Famoroti

NIGERIA Q2'18 Capital Importation - Easy Come, Easy Go: Hot Money To Cool Before Polls

Easy come, easy go: Hot money to cool before polls                                                                       Second quarter figures from the National Bureau of Statistics (NBS) show a 13% dip in capital imports into Nigeria during the period, although at $5.5 billion, capital imports for the second quarter were still 3x higher y/y and larger than total capital imports in FY’17 ($5.1 billion). Looking at the half-year period underscores the year-on-year improvement: H1’18 capital imports ($11.8 billion) were 4x larger than H1’17 ($2.7 billion). This improvement has been driven by a...

Michael Famoroti

June Inflation Review - Inflation falls in June, but warning signs are apparent

Inflation falls in June, but warning signs are apparent Nigeria’s annual inflation moderated once again, declining from 11.6% in May to 11.2% in June, slightly ahead of Vetiva estimate of 11.1%, and well ahead of Consensus projection of 10.9%. Despite this fall, month-on-month (m/m) inflation rose for a consecutive month, from 1.1% in May to 1.2% in June, the highest figure since June 2017. This trend was replicated across the Food and Core sub-indices, as they declined from 13.4% and 10.7% to 13.0% and 10.4% respectively in y/y terms, but advanced from 1.3% and 1.0% to 1.6% and 1.0% in m/m t...

Breakfast Report - 16 July, 2018

Two months after the Shell Petroleum Development Company of Nigeria Limited (SPDC) declared Force Majeure on the Bonny Light exports, the company announced that it has now been lifted, indicating resumption of normal loading activities from the Bonny terminal. The Force Majeure was initially placed after the shutdown of the Nembe Creek Trunk Line after a leak was found on the pipeline which feeds the Bonny terminal. Given this development, Nigeria’s recent oil lifting challenges are nearly behind and we expect to see an uptick in oil production in the coming months, a boon for Nigeria’s export...

Weekly Market Wrap - 13 July 2018

Bulls emerge at week closeBulls emerged on the bourse today, helping all key sectors to green closes, as the ASI inched 45bps higher. Despite this, prior losses led the ASI to a 62bps w/w loss. The Industrial Goods sector (+329bps d/d; -129bps w/w) was today’s best performer, spurred by an 870bps advance in WAPCO. Also, the Oil & Gas sector posted a 71bps uptick for the day and on the week after SEPLAT (+236bps) lifted the sector, and despite declines in ETERNA (-588bps) and FO (-430bps). The Consumer Goods (+54bps d/d; -43bps w/w) and Banking (+40bps d/d; -210bps w/w) sectors also closed up, ...

The Market Today - 13 July 2018

  Oil prices drop 6% in only a few days Oil prices plummeted this week, dropping 6% from $78.86/bbl on Tuesday to $74.45/bbl on Thursday on the back of an escalating U.S.-China trade dispute and following reports that Libya’s oil export terminals were back online, bringing an end to export struggles in the North African country. Furthermore, early estimates suggest that Saudi Arabia and Russia combined for an additional 500,000 barrels of oil in June, though this was likely offset by production shocks in Canada and the North Sea, as well as ongoing challenges with Venezuelan crude supply. Ne...

Olalekan Olabode

GUARANTY TRUST BANK PLC H1'18 - Impressive run rate maintained as PAT trumps estimates

Impressive run rate maintained as PAT trumps estimates                                                                            GUARANTY released its H1’18 results, beating already impressive Q1’18 earnings and on track to set another record high profit performance. Particularly, whilst top line grew by a modest 6% y/y to ₦226 billion (Vetiva: ₦219 billion), growth in bottom line was even more impressive, up 14% to ₦95.6 billion – 10% ahead of our ₦86.7 billion estimate. As against the trend observed across a few other banks, performance in the second quarter of the year came in stronger. ...

The Market Today - 24 August 2017

Non-oil income drags August revenue lowerRevenue accruing to the Federation Account Allocation Committee (FAAC) came in at ₦468 billion in August, indicating a decline in revenue from the ₦652 billion shared in July. Notably, oil export sales for the Federation increased by $62 million following a rise in export volumes by 1.20 million barrels. However, non-oil revenue came in lower, driven by weaker Companies Income Tax collection during the period following the expiration of the deadline for filing tax returns. Overall, the Federal Government received ₦193 billion, states received ₦130 billi...

The Market Today - 23 August 2017

Foreign Investments surge in second quarter                                     According to the data from the National Bureau of Statistics (NBS), Nigeria recorded capital imports of $1,792 million in Q2’17, a significant increase from $908 million and $1,042 million recorded in Q1’17 and Q2’16 respectively. We believe the figures do not account for $1.8 billion raised in Eurobonds and Diaspora bonds so far in 2017. Rather, the surge in foreign inflows was driven by strong growth in Foreign Portfolio Inflows (FPI) into equity instruments – rising from $102 million in Q1’17 to $614 million i...

The Market Today - 22 August 2017

Primary market activity surges in the equity market                                    After years of tepid primary issues in the Nigerian capital market, activities have gradually seeped back into the Primary market on the Nigerian stock exchange as companies revisit plans to raise equity. These activities have come in the form of a flurry of rights issues across various key sectors on the exchange. With currency devaluation inflating finance costs on dollar-denominated loans in 2016 coupled with the need to boost capital buffers, companies now look to the primary equity market to provide r...

Breakfast Report - 21 August, 2017

The Week Ahead                                                     In his first public address to the nation since his return to the country, President Buhari underlined that Nigeria’s unity is non-negotiable, charging the national security agencies to build on successes attained in the last two years to ensure peace and safety for all Nigerians. He further reiterated his commitment to tackling prevalent security concerns in the country from factions of Boko Haram, farmer-herdsmen clashes, kidnappings, and ethnic tensions. The President concluded his speech by assuring Nigerians that he was ...

Weekly Market Wrap - 18 August 2017

Market rebounds at week close, ASI still down w/w                                      The NSE ASI recorded a second successive session gain on today, closing 166bps higher, but still shed 335bps over the course of the week on the back of losses recorded at week open. With buying momentum strengthening at week close, particularly on notable banking names, we foresee a positive start to trading next week.                               Stock Watch: After rallying to a five-year high of ₦193.00 at the beginning of the week, NB has lost 6% over the last four sessions to settle at ₦181.02 - sti...

Nigeria Q2'18 Trade Report - Trade Surplus Widens Amid Dip In Petrol Imports

Trade surplus widens amid dip in petrol imports                                                                              Nigeria’s current account surplus improved 8% q/q to ₦2.4 trillion in Q2’18 amid a decline in both exports (5%) and imports (16%). Following this, H1’18 current account surplus came in at ₦4.5 trillion, higher than FY’17 surplus (₦4.0 trillion) and the highest since 2014—pointing to the turnaround in Nigeria’s current account since the 2014 oil price crash.                                                                At ₦2.1 trillion, Q2’18 imports were down 16% q/q,...

The Market Today Report The Market Today - 20 August 2018

GENCOs call for increased support from the FG                                                The Association of Power Generation Companies (APGC) has called for increased support from FG and its agencies to enable the Generating Companies (GENCOs) stay operational. Specifically, the GENCOs called on the FG to settle outstanding invoices for power supplied to the grid, and requested a follow-up financing plan to the existing ₦701 billion Power Assurance Facility (PAF) when it runs out. We note that liquidity has been a persistent challenge to the power generation sector despite last year’s rol...

Breakfast Report - 20 August, 2018

The Week Ahead                                                                             Speaking over the weekend, Dr. Yemi Kale, the Statistician-General of the Federation hinted at a flat GDP growth for Nigeria in Q2’18, citing the challenges in the agriculture sector as a potential impediment to near-term growth. The National Bureau of Statistics is scheduled to release Q2’18 GDP figures at the start of next week and we forecast year-on-year growth of 1.6% during the period, down from 2.0% in Q1’18. One driver of this material decline is the moderation in oil production observed in the ...

Weekly Market Wrap - 17 August 2018

Market rallies at week close as Industrials recover                                               After posting ten straight negative closes, the ASI recorded a 187bps rebound at week close following a strong recovery in Indsutrial Goods. This gain was however unable to offset earlier losses with the index recording a 51bps w/w loss. The rebound in the Industrial Goods sector (d/d:+351; +129bps) was solely buoyed by sizable gains in DANGCEM (+680bps). The Consumer Goods sector (d/d:+26bps; w/w -112bps)  also recorded a positive session at week close thanks to DANGFLOUR (+132bps) and UNILEVER ...

Olalekan Olabode

STANBIC IBTC HOLDINGS PLC H1'18 - Another Earnings Beat Sees A Rating Revision To "HOLD"

Another earnings beat sees a rating revision to “HOLD”                                                                               STANBIC released its H1’18 results, posting strong y/y performance following another impressive quarter. Although the run rate recorded in Q2’18 marginally lagged performance from the earlier quarter, H1’18 earnings still came in largely ahead of our estimate as PAT rose 79% y/y to ₦43.1 billion – better than our ₦36.9 billion estimate. Notably, Gross Earnings came in flat q/q at ₦57 billion as a modest 3% q/q rise in Interest Income offset a 6% moderation in No...

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