TRANSPORTATION INDUSTRY UPDATE. Japan to invest $1bn in Lagos Monorail Project

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1 August 05, 2016 Vol.11 No.31 Editorial Team Marcel Okeke Editor Eunice Sampson Deputy Editor Joy Patrick-Akpan Kazeem Aremu Sunday Enebeli-Uzor Ugochi Chibuzor Nweke Chinemerem Okoro Research Economists Rotimi Arowobusoye Sylvester Ukut Layout/Design Japan International Cooperation Agency (JICA), has committed to invest $1bn in the construction of the Lagos State urban rail line. According to the Lagos State Government, the monorail project which is a part of the Lagos Urban Railway Development Project will link Marina to Oniru in Victoria and Ikoyi. This model is being replicated in Japan in a new transportation system called the Automated Guide Transit (AGT)... pg. 1 African Development Bank (AfDB) has approved $56 billion to expand industrialization in Nigeria and other Africa countries over the next ten years. The strategy ratified by the Board of AfDB signifies a roadmap for implementing priority programs to scale-up the industrial transformation of Africa ( ) tagged Industrialize Africa, according to the AfDB... pg. 2 Nigeria s online grocery retailing segment will present strong growth opportunities in the Mass Grocery Retail (MGR) and e-commerce sectors over the mediumto-long term according to a report by Business Monitor International (BMI). BMI s view is underpinned by a positive e-commerce outlook for Nigeria, as the industry value is expected to grow at a five-year compounded annual growth rate (CAGR) of 16.1% up to Nigeria is one of the most promising e-commerce markets in sub-saharan Africa (SSA) alongside South Africa and Tanzania accounting for 87% of SSA e-commerce sales in 2015 combined. Furthermore, online grocery retailing services offerings have grown over the previous years as Nigeria s MGR sector became more dynamic... pg. 3 Nigeria s sugar industry production capacity appreciated to 15,000 metric tonnes while importation fell by $80.2 million in The National Sugar Development Council (NSDC) has stated that production capacity of local sugar firms rose from 12,345 metric tonnes in 2014 to 15,000 metric tonnes in Conversely, the value of sugar importation into the country fell from $ million in 2014 to $ million in In addition to this, sugar consumption rose from 1,433, 471 metric tonnes in 2014 to 1,499,724 metric tonnes in Industrial consumption of sugar accounts for about 70% of sugar demand in Nigeria... pg. 5 TRANSPORTATION INDUSTRY UPDATE Japan to invest $1bn in Lagos Monorail Project Japan International Cooperation Agency (JICA), has committed to invest $1bn in the construction of the Lagos State urban rail line. According to the Lagos State Government, the monorail project which is a part of the Lagos Urban Railway Development Project will link Marina to Oniru in Victoria and Ikoyi. This model is being replicated in Japan in a new transportation system called the Automated Guide Transit (AGT). The U$1bn monorail project is an urban mass transportation project, uniquely different from the ongoing Light Rail (Blue Line) project connecting Mile 12 to CMS and the Light Rail (Red Line) project. The aim of the project is to improve transportation, mitigate traffic congestion and develop the Lagos State environment, thereby improving the standard of living of the populace. According to the Lagos State Government, the Gross Domestic Product (GDP) of Lagos State comes mainly from Marina-Lekki axis, and it constitutes a major attraction for investments in Lagos. The innovation and automation that goes with the monorail project will redefine railway transport system in Nigeria. To ensure effective implementation of this initiative, the Lagos State Government has recently conducted a survey on route planning and demand forecast. According to the JICA, this will determine the extent to which the monorail project can actually minimize obstruction, and to check for possible land acquisition that will result in good connectivity with other transport modes and Eko Atlantic City. The results from the feasibility study are positively optimistic that the Lagos Urban Railway Development Project will curb traffic congestion and improve transportation in the state. Lagos State is currently facing high traffic congestions due to poor planning of road networks, high violation of traffic rules, low enforcement of traffic laws, low investment in transport infrastructures over time and high level of corruption in the system. This has caused irreparable loss to businesses and commuters especially failed appointments and loss of lives. The monorail project is therefore expected to ease these challenges.

2 Japan to invest $1bn in Lagos Monorail Project Pros May boost economic activities around Marina- Lekki axis May attract foreign direct investment into the state Opportunity for other states to use Lagos State as a model of their respective transport system Likelihood of increase in revenue and income to businesses around the Marina-Lekki axis of the project Likely to increase the GDP of Lagos State and Nigeria at large May quicken the development of Lekki corridor especially Lekki Free Trade Zone Cons May lead to destruction of structures around the project site Will likely cause temporary traffic congestions and hardships during the project execution Private sectors funding modalities are unclear Nigeria s current economic recession may delay the swift completion of the project With the recent signing of MOUs by the Lagos State government for the construction of 4 th Mainland Bridge, the Light Rail project and the $1bn ultra-modern monorail project; Lagos State may likely concentrate a large chunk of its future investments and resources on the Lekki and Badagry Axis, as these locations present the highest returns on capital employed. BUSINESS AND INVESTMENT UPDATE AfDB Industrialization package: $56bn for Nigeria, others African Development Bank (AfDB) has approved $56 billion to expand industrialization in Nigeria and other Africa countries over the next ten years. The strategy ratified by the Board of AfDB signifies a roadmap for implementing priority programs to scale-up the industrial transformation of Africa ( ) tagged Industrialize Africa, according to the AfDB. The strategy aims to help Nigeria and other Africa countries develop their respective industrial sectors and policy frameworks, enhance trade and integrate Africa into the regional and global value chains; and boost competitiveness and value creation by expanding the supply of business services to maximize impact on the performance of industries. To achieve these objectives, the AfDB s strategy would rely on five enablers which it will factor into the flagship programs. These are: Supportive policy, legislation, and institutions Conducive economic environment and infrastructure Access to capital Access to markets Competitive talents, capabilities, and entrepreneurship According to the AfDB, these enablers could be integrated into a comprehensive Nigeria s industrial policy, enabling businesses to develop along the value chains of selected, high-potential industrial sectors. The $56 billion industrial fund will help Nigeria s industrial sector to leverage on the value chains of economic activity ranging from raw materials to finished products. Also, it will greatly enhance productivity by introducing new equipment and new techniques, increasing the capabilities of the workforce and creating multiplier effects in the process. And ultimately creates import substitution which will improve the country s balance of trade through. Opportunities African Development Bank (AfDB) will support Nigeria and other Africa countries by championing six flagship programs to create the following opportunities; 2

3 AfDB Industrialization package: $56bn for Nigeria, others Foster successful industrial policies Catalyze funding in infrastructure and industry projects Grow liquid and efficient capital markets in Stimulate and drive enterprise development Promote strategic partnerships Develop efficient industry clusters. Challenges Nigeria s poor infrastructures, rising energy cost and access to foreign exchange by manufacturers, truncated the realization of the objectives of Nigeria s Industrial Revolution Plan (NIRP) The manufacturing sector has witnessed a steady negative growth rate of percent within the last 3 years. As a share of the economy, the contribution of manufacturing to nominal GDP was 9.93 percent in Q1, 2016, down from the percent and percent recorded in the first quarter of 2015 and 2014 respectively. As a result, a new industrial plan will be needed by Federal Government to integrate the AFDB s industrial strategy. With CBN s increase in the MPR from 12 percent to 14 percent, it is expected that the hike in rate will motivate foreign investors sufficiently to participate in the new FX interbank market. This will give industrialists greater access to scarce foreign exchange needed to import raw materials and other inputs to restart production. Given positive outcomes from this development, the $56 billion industrial package could effectively play a key role in complementing Nigeria s industrial plans and goals. E-COMMERCE SECTOR UPDATE Nigeria s Online Grocery Retailing set for Growth Nigeria s online grocery retailing segment will present strong growth opportunities in the Mass Grocery Retail (MGR) and e-commerce sectors over the mediumto-long term according to a report by Business Monitor International (BMI). BMI s view is underpinned by a positive e-commerce outlook for Nigeria, as the industry value is expected to grow at a five-year compounded annual growth rate (CAGR) of 16.1% up to Nigeria is one of the most promising e-commerce markets in sub-saharan Africa (SSA) alongside South Africa and Tanzania accounting for 87% of SSA e-commerce sales in 2015 combined. Furthermore, online grocery retailing services offerings have grown over the previous years as Nigeria s MGR sector became more dynamic. According to BMI, rising consumer affluence will drive growth in the online grocery retailing sector as consumers with higher disposable incomes are able to frequently make purchases online. From 2018, consumers within the USD35,000-plus income band will increase rapidly from 90,400 in 2018 to 132,800 in approximately a 47% increase in this income band. Growing affluence will ensure a growing and sustained consumer base. In the short term, however, online grocery retailing will experience negative growth over 2016 and 2017 due to high inflation and a 0.8% real GDP contraction over Nigerian consumers are expected to reduce non-essential food and drink spending in a bid to abate rising food prices and weakening consumer purchasing power during this period. Growth Drivers Over the medium-to-long term, online grocery retailing segment is expected to experience rapid growth on the back of rising consumer affluence, increasing internet connectivity and growing demand for convenience. Increasing internet connectivity will raise consumer awareness of online grocery retailing, which will lead to mass adoption within high income consumer segments. BMI forecast the number of 3G & 4G phone subscribers to grow rapidly over the forecast period, at a five-year CAGR of 35% through to The rising demand for convenience will fuel growth in the sector, especially among time constrained women who participate in the labour force. Online grocery retailing s value propo- 3

4 Nigeria s Online Grocery Retailing set for Growth sition lies in its time saving element reducing time spent in traffic or looking for different products in different stores. Nigerian women s labour force participation has been growing, and the trend is expected to continue playing out over the coming years. Growing interest from foreign retailers will provide dynamism in Nigeria s mass grocery retail sector over the forecast period and drive formalisation. Pick n Pay has announced that it will be entering the Nigerian market through a joint venture with local conglomerate AG Leventis. Expansion by existing retailers will facilitate further formalisation as consumers are more likely to adopt However, Nigeria s raw growth potential is unmatched. South Africa s Shoprite (Africa s largest retailer by market capitalisation) is present in Nigeria but operates fewer than a dozen stores. In comparison, it runs 90 stores in Zambia (which has a population of less than 13 million). High operating costs and weak internal trade systems are two core reasons why regional retailers have looked at Nigeria rather hesitantly. Additionally, the West Africa region, in general, lacks a strong regional grocery retailer, unlike in Southern Africa where well-established South African and Kenyan retailers in particular are able to launch in neighbouring markets. well-known retail brands. With industry major Carrefour having announced plans to enter the Nigerian MGR sector, it is expected that a gradual increase in competition and growing industry dynamism will also be important growth drivers. In early 2014, Walmart-owned Massmart announced plans to open 10 pilot stores in Lagos over the following two years. By summer 2015 six Massmart stores were operating in Nigeria. With a large and growing population that is nearing 170 million, Nigeria is arguably Africa s most promising retail market. Risk Factors Nigeria carries greater risk than more modestly sized (in terms of population) regional growth stories such as Ghana, where operating costs are lower and institutions are better developed. In addition, investment into the MGR sector has been held back by high inflation rates. BMI s bullish five-year view on Nigerian retail is predicated in part on the expectation that this five-year period will mark the first time Nigeria is aggressively targeted by South African retailers, while the French retail giant Carrefour is to test the waters through its regional joint venture. Additionally, the Nigerian government has announced an expansive budget, increasing capital investment by over 200% from 2015, with the largest proportion of these funds being directed towards infrastructure. This will bode well for the sector, which faces structural inefficiencies in the form of unreliable logistics and utility networks. Some major online local retailers include: Justrite Superstores, Yem-Yem Superstore, Supermarket.ng, Tonyson, and Value4Naira.com. Lagos, Abuja, and Port Harcourt are the major centres for online shopping in Nigeria. 4

5 AGRICULTURE SECTOR UPDATE Nigeria s Sugar Import Falls by $80.2m as Production Hits 15000MT Nigeria s sugar industry production capacity appreciated to 15,000 metric tonnes while importation fell by $80.2 million in The National Sugar Development Council (NSDC) has stated that production capacity of local sugar firms rose from 12,345 metric tonnes in 2014 to 15,000 metric tonnes in Conversely, the value of sugar importation into the country fell from $ million in 2014 to $ million in In addition to this, sugar consumption rose from 1,433, 471 metric tonnes in 2014 to 1,499,724 metric tonnes in Industrial consumption of sugar accounts for about 70% of sugar demand in Nigeria. Nigeria however only produces one per cent of the 1.5 million metric tonnes of sugar consumed by its 180 million population. The country remains one of the lowest producers in the West African region. For instance, Benin Republic produces 25.6 per cent of its sugar requirement; Burkina Faso, 47 per cent; Cote d Ivoire 54 per cent; Senegal, 48 per cent and Mali, 28 per cent. This underdeveloped state of the sugar industry and the low local sugar production has deprived the country of all the benefits derivable from a vibrant sugar sector. The consequences of which include the annual drain on the nation s foreign exchange earnings, loss of hundreds of thousands of employment opportunities, and food insecurity arising from sugar import dependence. As the population continues to rise, the demand and consumption of sugar will also continue to increase. The current foreign exchange situation makes it increasingly necessary to raise local sugar production to meet demand. According to the United States Department of Agriculture (USDA) in its May 2016 report on Nigeria s sugar industry, Importers report that they can obtain only percent of their foreign exchange demand from official sources. However, for the remaining percent, they rely on the high-cost parallel market, This has attracted investments from local and international investors to expand production capacity to meet current and future consumption To revamp the sugar sector, the Federal Government has initiated incentives for an enabling environment for investors. Among the incentives are zero per cent duty on machinery and spare parts by companies, as well as 10 per cent import duty and 50 per cent levy on imported raw sugar. There is equally a 20 percent duty and 60 percent levy on imported refined sugar. These initiatives have prompted increased investment in the sector. For example, Dangote Sugar has invested over $2 billion in six states in the country, through its Savannah Sugar in Numan, Adamawa State, with a target of hitting 1.5 million metric tonnes, while expanding land 5

6 Nigeria s Sugar Import Falls by $80.2m as Production Hits 15000MT size from 6,500 hectares to 21,000 hectares. In the same vein, Honey Gold Group is investing $300 million on two sites in Adamawa state, targeting 200,000 metric tonnes of sugar annually; while Crystal Sugar Mills has invested $30 million in expanding its operations to produce 60,000 tonnes sugar/annum from its TCD plant at Hadejia, Jigawa state. Similarly, Confluence Sugar Company is investing $240million in Kogi State to produce 200,000 metric tonnes of sugar/annum on about 37,000 hectares of land at Ibaji. Flour Mills Golden Sugar Company is also investing $300 million in its 12,500 hectares project in Sunti Niger state, and is also exploring new sites in Kogi and Niger for bigger sugar projects. These increased investment in local Sugar production is expected to generate 133,300 jobs by The country has a landmass of over 500,000 hectares suitable for cane and capable of producing over five million metric tonnes of sugarcane. With a demand of 1.5 million metric tonnes, the country has no need to import sugar. In order to ensure availability of sugar cane for the sugar industry, the NSDC has unveiled plans to cite 236,000 land banks in 17 states for sugarcane production in some states in the country. These states are; Katsina, Zamafara, Jigawa, Imo, Ogun, Kwara, Kogi, Edo, Cross River, Benue, Taraba, Ogun, Plateau, Ondo, Anambra and Adamawa. The government has also begun a credit support scheme for sugarcane growers through the Central Bank of Nigeria (CBN) and commercial banks. In addition, the government has made plans for the provision of infrastructure, such as access roads, boreholes, power lines, land acquisition, and health care facilities for new sugar estates. Industrialisation of the sugar sector will not only reduce demand for forex but may also become a new source of forex inflows for the country. The sugar sector could play a big role in the diversification of the economy if, the country s capacity to produce five million metric tonnes is fully harnessed. Furthermore, local investors who have received incentives from the Federal Government should be held to account; to ensure they make commiserate investments. Industrial buyers should also be encouraged to buy from the local market to stem postharvest wastage. National Industrial Sugar Consumption Source: National Sugar Development Council 6

7 FINANCIAL SERVICES POLICY UPDATE Savings Accounts: Cheques, Dividend Warrants, Now acceptable Nigerian banks can now receive cheques into savings account. This was approved in the new guidelines clared funds floating in the system. This initiative will, of how much money is in the system owing to unde- for the banking industry recently released by the Central therefore, help the CBN track and monitor cash flows in Bank of Nigeria (CBN). With this new regulation, customers can make cheques deposits into their savings accounts etary policy. the nation s financial system for a more effective mon- with daily deposit limit of N2m per customer. However, Although, deposit money banks have expressed the CBN stipulated that customers must have the Bank concerns that the implementation of the acceptance of Verification Number, (BVN) to enjoy this benefit. Additionally, deposit money banks are expected to discon- further risks; the CBN has allayed their fears by reiterat- cheques into savings accounts, may expose the banks to tinue actual address verification as a condition for account opening for customers with BVN. Number (BVN) into the payments system. According ing the importance of embedding the Bank Verification to Cheques Operations (January June 2016) Source: Nigerian Inter-Bank Settlement System For decades, deposit money bank customers in Nigeria have been denied the benefits of paying in their cheques into their savings account, owing to fears of identity theft and the inherent risk the banks may be exposed to. Similarly, investors in the capital market who only operate savings accounts could not claim the dividends from their investments due to the inability to deposit dividend warrants into savings accounts. This limitation has contributed to the quantum growth of unclaimed dividends in Nigeria. This CBN initiative is a tripartite target aimed at tracking illegal funds flows, quantity of money in circulation and deepening the cash-less project. It is meant to strengthen the payment system and the banking sector because prior to this development; bank customers could only make cheque deposits into their current accounts. This has made it difficult for CBN to implement its monetary policy effectively since it does not have a total view the CBN, this will facilitate not just the tracking of money in the system but also the individuals that carried out the transactions. In a similar development, banks have been mandated by the Securities and Exchange Commission (SEC) to accept dividend warrants into the savings account of investors. In collaboration with the CBN, the Nigerian Inter-Bank Settlement System (NIBSS) and deposit money banks, the SEC has developed the e-dividend Mandate Management System (e-dmms) as an online portal for enrolling investors. Retail investors are expected to register onto the platform using their Bank Verification Numbers (BVN) to receive their dividends directly into their accounts. These initiatives are necessary at this point in the nation s development considering that the volume cheques processed through the Nigerian financial system dropped from 6.41m to 5.73m in the first half of 2015 compared to the same period in 2016, as recorded by NIBSS. Similarly, NIBSS revealed that the value of cheques received within this period declined from N3.2trn to N2.9trn; giving rise to concerns about compliance with CBN s efforts to build a cashless society. Value addition.. Effective implementation of the new CBN directive on acceptance of cheques into savings account is expected to: Boost the volume and value of cheque transac- 7

8 Savings Accounts: Cheques, Dividend Warrants, Now acceptable tions, as there will be no reason to reject cheque payments anymore Track money through accurate record keeping and electronic trails of such transactions Provide security for values, for both customers and the financial institution Facilitate identification and biometric-based authentication on transactions through the embedded BVN process. Enhance the financial inclusion drive as it will encourage people who have stashed values outside the system (on the excuses of not having any current account) to open savings account and bring those values into the system. With this new directive from the CBN, Nigeria is moving ever closer to an era where retail investors can have increased comfort to return to the capital market as the incidence of unclaimed dividends in Nigeria will reduce. Also, as part of several measures to put an end to the increase in fraudulent practices in the Nigerian financial system, this development raises a new hope that the long expected revolution about biometric payments system would soon be realized. If this invigorated government effort is sustained, the Automated Teller Machine (ATM) and Point of Sale (POS) transactions are expected to become biometric enabled by Source: Nigerian Inter-Bank Settlement System 8

9 Foreign Portfolio Investment sustains rebound, rises by 97% Foreign Portfolio Investment (FPI) transactions at the nation s bourse recorded a second consecutive increase in June 2016, after rebounding from four straight months of decline in May According to the monthly FPI report released by the Nigerian Stock Exchange (NSE), FPI transactions, which captures overseas investors participation in the capital market, rose by per cent to N79.77 billion (US$0.282 billion) in June, from N40.58 (US$0.143 billion) billion in the previous month. Similarly, for a third successive month, foreign inflows significantly outpaced outflows despite the substantial increase in the latter. Specifically, foreign inflows rose by per cent from N20.96 billion in May to N42.46 billion in June, while foreign outflows increased by per cent from N19.62 billion to N37.30bilion within the same period. The higher increase in inflow ensured a positive net flow. Market Highlight Thus, in the first half of 2016, total FPI transactions stood at N billion (US$0.950 billion), with total foreign inflow reaching N billion. However, the report revealed that total FPI transactions decrease by percent when compared with the N588.99billion recorded in the first half of Market Composition: Domestic vs. Foreign Foreign investors outperformed their domestic Source: Nigerian Stock Exchange (NSE) CAPITAL MARKET UPDATE counterparts for the first time since February Specifically, of the N billion transactions recorded on the Exchange in June 2016, overseas investors accounted for percent while domestic investors accounted for percent. This is in contrast to the market composition recorded in the preceding month where foreign investors accounted for percent of the total transaction while local investors dominated activities with per cent. The institutional composition of the domestic market increased by percent from N30.65b in May Source: Nigerian Stock Exchange (NSE) to N39.04b in June. The retail composition also increased by percent from N32.69b in May to N37.04b in June. Institutional investors marginally outperformed their retail counterparts in the period under review. The robust FPI flow recorded at the nation s bourse is attributable to positive investor sentiment driven by the adoption of a flexible foreign exchange regime by the Central Bank of Nigeria (CBN). FPI flow is expected to continue to increase in the short to medium term. However, macroeconomic concerns including spiraling inflation are downside risks which perhaps explains rising FPI outflow in recent times. Further participation of foreign portfolio investors in transactions on the floor of the Nigerian Stock Exchange may be affected by these macroeconomic concerns. 9

10 CAPITAL MARKET UPDATE Market Highlight The Nigerian equities market ended the outgone week in the red, with the bears dominating activities in four of the five trading days. The market performance gauge, the All-Share Index (ASI), depreciated by 2.09 per cent or to close at 27,425.86, from 28, recorded in the preceding week. Market Capitalization also dipped by 2.09 per cent, slipping to N9.419 trillion, from the N9.620 trillion recorded the previous week. Similarly, all other indices finished lower during the week, with the exception of the NSE ASeM Index which closed flat. Investors sentiment was also lower as twenty-two equities appreciated in price during the week under review higher than thirty-five of equities the previous week. At the close of the week s trading, a turnover of billion shares worth N billion in 18,548 deals were traded by investors on the floor of the Exchange, in contrast to a total of billion shares valued at N billion that exchanged hands in the previous week in 21,584 deals. Recent development McNichols Consolidated Plc released its unaudited financial statements for the period ended June 30, Gross revenue rose to N million from the 2015 figure of N million. Profit after Tax also inched up to N million, from the 2015 figure of N million. Livestock Feeds Plc released its unaudited financial statements for the period ended June 30, Gross revenue rose to N4.574 billion, from the N4.007 billion recorded in the corresponding period of Profit after Tax, however, dipped to N million, from the 2015 figure of N million. The Okomu Oil Palm Company Plc released its unaudited financial statements for the period ended June 30, Gross revenue climbed to N7.545 billion, from the 2015 figure of N4.991 billion. Profit after Tax also rose to N3.595 billion, from the 2015 position of N1.842 billion. Lasaco Assurance Plc released its unaudited financial statements for the period ended June 30, Gross Premiums rose to N4.009 billion, from the 2015 figure of N2.890 billion. Profit after Tax also climbed to N million, from the 2015 figure of N million. Nigerian Enamelware Plc released its audited financial statements for the year ended April 30, Gross Revenue rose to N2.795 billion, from the 2015 figure of N2.608 billion. Profit after Tax also rose to N million from the 2015 figure of N million. GlaxoSmithKline announced the closure of its register Source: Nigeria Stock Exchange (NSE) 10

11 Market Highlight for the year ended 31 December Proposed Special Dividend is 60 kobo per share, Closure Date is 1st September 2016, Annual General Meeting (AGM) Date and Venue will be announced, while Payment Date is 7th September Total Oil Nigeria Plc announced the closure of its register for the half-year ended 30 June Proposed Dividend is 300 Kobo share; Closure Date is 22nd 25th August 2016, AGM date and venue will be announced while Payment Date is 6th September Pharma Deko Plc announced the closure of its register for the half-year ended 30 June Proposed Interim Dividend is 15 kobo per share; Closure Date is 12th August 2016, AGM Date and venue to be announced while Payment Date is 16th of September Portland Paints & Products Nigeria Plc released its financial statements for the period ended June 30, Gross Revenue slipped to N million, from the 2015 figure of N billion. Loss after Tax stood at N million as against the 2015 profit figure of N million. Staco Insurance Plc released its unaudited financial statements for the period ended June 30, Gross Premiums dipped to N3.034 billion, from the 2015 figure of N3.395 billion. Profit after Tax also fell to N million, from the 2015 figure of N million Diamond Bank Plc released its unaudited financial statements for the period ended June 30, Interest Income slipped to N billion, from the 2015 figure of N billion. Profit after Tax also dipped to N9.054 billion, from 2015 figure of N billion. Mobil Oil Nigeria Plc released its financial statements for the period ended June 30, Turnover rose to N billion, from the 2015 figure of N billion. Profit after Tax also rose to N4.416 billion, from the 2015 figure of N2.910 billion. Africa Prudential Registrars Plc released its financial statements for the period ended June 30, Registrars Fee Income rose to N million, from the 2015 figure of N million. Profit after Tax, however, fell to N million, from the 2015 figure of N million. Morrison Industries Plc released its financial statements for the period ended June 30, Gross revenue slipped to N billion, from the 2015 figure of N billion. Loss after Tax stood at N million, from the 2015 loss position of N9.638 million. Capital Hotels Plc released its financial statements for Source: Nigeria Stock Exchange (NSE) 11

12 the period ended June 30, Gross Revenue inched up to N2.399 billion, from the 2015 figure of N2.353 billion. Profit after Tax also rose to N million, from the 2015 figure of N Custodian and Allied Plc released its unaudited financial statements for the period ended June 30, Gross Revenue rose to N billion, from the 2015 figure of N billion. Profit after Tax also inched up to N2.887 billion, from the 2015 figure of N2.618 billion. Consolidated Hallmark Insurance Plc released its unaudited financial statements for the period ended June 30, Gross Premium slipped to N3.437 billion, from the 2015 figure of N3.772 billion. Profit after Tax also dipped to N million, from the 2015 figure of N million. MRS Oil Nigeria Plc released its unaudited financial statements for the period ended June 30, Revenue rose to N billion, from the 2015 figure of N billion. Profit after Tax also rose to N million, from the 2015 figure of N million. In the outgone week, the Nigerian equities market failed to sustain the rebound witnessed in the previous trading week owing to sell-off pressure as investors reallocate portfolio mix in favour of fixed income securities. Also, investors sentiment was weakened by less than positive half-year financial statements released by many quoted companies. In trading days ahead, mixed performance is expected, although investors are expected to favour the fixed income market due to higher yield. Source: Nigeria Stock Exchange (NSE) 12

13 Crude Oil Market Highlights Oil Market Review (August 1st - 5th, 2016) At the close of trading on Friday, August 5th, crude oil prices ended little changed as short-covering returned in late trading, after some weakness earlier in the session as the U.S. dollar rose on robust U.S. jobs data. West Texas Intermediate (WTI) crude for September frontmonth contract settled down 13 cents, or 0.3 percent, at $41.80 per barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, for October delivery settled down just 2 cents at $44.27 per barrel on ICE Futures Europe. Earlier at the beginning of trading this week on Monday, August 1st, crude oil prices fell nearly 4 percent on heightened worries of a crude glut despite peak summer fuel demand. On Tuesday, August 2nd, U.S. crude oil fell to end below $40 a barrel for the first time since April as persistent worries of both a crude and refined fuel glut and a slide in U.S. equities offset an early boost from a weak dollar. During midweek trading on Wednesday, August 3rd, oil prices jumped more than 3 percent with U.S. crude futures returning to above $40 a barrel, after a larger-than-expected gasoline draw offset a surprise build in crude stockpiles in the number one oil consuming country. On Thursday, August 4th, oil prices rose nearly 3 percent with U.S. crude advancing firmly above the $40- per-barrel mark on short-covering and after a modest stockpile drop at the delivery hub for U.S. crude futures. 13