Tag: Art

Her children, her everything

Mama Divine was a lanky, very dark and young mother of two kids. She owns a moderate foodstuff business which every family in our estate depends on for their mini mid-week shopping.

Her story was as unbelievable as it is pitiable. Having left her home in Delta state at the age of 14 after several issues with her stepmother, she arrived Lagos seeking a way forward in life.

From sleeping in churches, to working and sleeping at a restaurant, and finally to accepting shelter under a man’s roof, Mama Divine has had her own share of life’s unfair treatment.

A few short years later, she has two sons for the man who sheltered and eventually left her – and alone, she has struggled to make a living in order to give her children the best she could. She wasn’t prepared to let her children suffer like she had even if it meant working double time.

Life for her was all about her two children.

One day, she walked up to me and said.

“Aunty abeg no vex, I wan ask you something.” I urged her to go ahead. “I wan start to dey save money for bank but I no sabi answer the question wey dey the paper.”

“Okay, show me” I said. She motioned for me to wait as she rushed into her one-room apartment to fetch the forms.

I took the forms and moved closer to a bench by the pavement to sit and put her through. While we filled the form, she told me stories that brought tears to my eyes. I couldn’t believe that this young girl had so much to worry about. While her mates went about bothered only by the latest clothes to wear and choicest hair-do to make, she was here at 21 thinking about how to eke a living and give her two boys the best.

When I saw how much she desired the best for her children, it was only right that I mentioned the education plan to her.

I explained that if she put as little as N5k in that account every month, in five years, she would have a lump sum along with accrued interest to fund her sons’ education. I went on to explain that even in the case of uncertainty, the plan could translate to insurance for her children ensuring that her dreams for them never gets altered along the way. No more does she have to constantly worry if she can afford to send her children to the university.

She looked me in the eye and said “Aunty, God go bless you well well.” I nodded as I held back a tear threatening to spill. I advised her to henceforth, try to put some money in the new account she was opening every month in case of emergency or have her customers pay into the account.

I also made sure to get the education plan form for her the following week and helped her fill it out. To ensure she keeps it funded, Mama Divine opted for a direct debit (after I explained what it was to her) – that way she would be able to stay consistent with putting money in the education account and wouldn’t use the money for something else.

As long as I stayed in that vicinity, I would do my best to help this strong woman in the best way I could because her willingness to secure a future for her children is nothing short of admirable.

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#ILoveMyFamilySeries: A Gift For Everyone

I felt my phone vibrate in my pocket as I showed a new customer an array of complete sitting room sets in my workshop display room. I gestured to the workshop manager to continue with the customer so that I could take the call. The caller identity showed an unrecognized international line.

“Hello”, I said in my most professional and engaging voice.

” Hello, son!”

“Dad?” I was puzzled. “How are you calling with an international line?”

He laughed and I could hear the excitement in his voice as well as some giggles in the background. Who was that? If it’s mum, it was strange to hear her giggling like a child, so I proceeded to ask for clarity purposes.

“Dad is that mum I am hearing her voice in the background?”

“Your mother and I are holidaying at Kenya! You need to see this place!”

I began to stutter. How? When? It would be rude to ask him how they both could afford a holiday trip to another country now that they are retired.

Then he explained.

They had cashed in on the ARM Annuity Plan that I introduced to dad 10 years ago! He said he told mother too to get on board and together they have been able to save for their retirement. In fact, they  planned to visit Egypt next to see the pyramids and the Nile.

I had a huge lump in my throat. I stood there stunned and emotional even after the call had ended. It is just so beautiful that my parents can live out their retirement having fun instead of getting constantly worried about monthly pension or working themselves to the grave.

At that moment, a delivery guy arrived with a specially packaged lunch from Chicken and Spices restaurant. I smiled automatically as my stomach growled in anticipation. Chicken and Spices is my wife’s restaurant that has been opened for four years now with the lump sum payment she got from ARM Savings plus . I opened my dream carpentry workshop last year too and took an early retirement from my stressful banking job after I got my own lump sum from the same plan.

“Good afternoon sir!”

“How are you Jeff?” I asked him cheerfully.

“Doing well sir. Madam made a special dish today and asked me not to hint you.” He looked excited and was almost bursting with the secret.

His smile was infectious when he added, “I asked about Chinedu and Nifemi, madam says they have returned to college.”

“Yeah! They went back last week.”

My mood improved even more when he mentioned my kids.

Please include how many years ago the son introduced his dad to the annuity plan to give people a sense of how long the process of cashing in could take. [CO1]

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Monetary Policy: MPC Springs a dovish surprise

MPC Springs a dovish surprise

The CBN Monetary Policy Committee (MPC) voted to cut the key benchmark interest rate by 50bps to 13.5%, taking the Standing Lending Facility and standing deposit facility to 15.5% and 8.5% respectively. The decision was surprising in that ARM Research and most analysts surveyed by Bloomberg anticipated no change in policy parameters. The MPC also switched its policy stance to ‘easing’ from ‘neutral’, which was a majority decision. What’s more amazing though is the sharp swing in the policy perception within the MPC members. Until yesterday’s meeting, majority of the members expressed caution on exchange rate stability and inflation and advocated for a neutral stance in the last four (4) meetings noting the risk to price and currency stability. Yesterday, 9 out 11 members voted for a rate cut, though only 6 members voted for a 50bps rate cut.

In the justification for a rate cut, the committee expressed satisfaction with the relative stability in the price level and exchange rate, and thus sought to support growth. Particularly, following the calm outcome of the general election together with the recent resurgence of foreign portfolio investment[1] into the country and continued deceleration in inflation reading, the CBN thought it imperative to signal a new direction.

Contact [email protected] for the full report

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#ILoveMyFamilySeries: What Miracle Can Save Dad’s Retirement?

After demolishing a mountain of pounded yam and vegetable soup with bush meat and assorted fishes prepared by my wonderful wife, my mind took a stroll to how she proffered a solution to my dream career pursuit with ARM Savings Plus. I smiled across the dining table at her and counted my numerous blessings. Thanks to her ingenuity, I started  ARM Savings Plus and it was easier than we thought.

“Daddy, I will like to buy new jeans and a white dress to take along for my trip to grandma and grandpa’s place for Easter.”

I gave a non-committal grunt.

The end of the school term drew near and Nifemi has used every opportunity to remind me of my promise that she’d spend the Easter holiday with my parents.

I joined my wife to clear the dishes and she told me about some cabinet designs she saw online knowing I’d be interested in looking at new designs for my weekend clients. She promised to show them to me when we were done in the kitchen.

After placing the last plate neatly in the rack, my wife poured us a cup of grape juice each and we went to the living room to relax.

As soon as my bottom touched the settee, Nifemi sat at my feet and started all over again to chatter non-stop about how she wanted to spend the holiday with her grand parents. I was almost beginning to regret making that promise. I and my wife exchanged glances above her head and my wife giggled as I rolled my eyes in frustration.

“You know she’s never going to stop talking about this until you call mum and dad to inform them, right?” my wife said.

“I better get right down to it then before my ears begin to ring in protest”, I responded.

I asked Nifemi to get me my phone from the room and in a split second, she was gone and back with it.

Predictably mother didn’t pick the call the first time. Probably she’d kept her phone deep inside her purse as usual. I redialed and she picked on the second ring.

After the initial pleasantries, she asked about Nifemi and Chinedu.

“Oh! The kids are doing great, in fact, Nifemi has been hounding me about spending the Easter holidays with you.”

My mum was elated and I heard her passing the message happily to my dad close by. She handed the phone over to him after and left to attend to other issues.

I and father had a brief chat about the visit and other stuff. When I asked dad about his work, I noticed he wasn’t really excited. His response was a flat ‘fine’ which in itself was unsettling.

“Is anything the matter?” I pressed.

He sighed deeply, “Honestly, son I am not looking forward to retirement. My surgery last year took away a chunk of my savings and I can’t help but worry.”

I was silent for a moment.

“I see…”

My dad was 52 and close to retirement. He had been saving over the years but a serious health challenge and operation had eaten really deep into that money last year.

“I don’t mean to bother you with this though. I will find a solution soon I suppose.”

We moved on to other topics but I couldn’t remove my mind from the talk about his retirement. My parents have been hard working all their lives and they deserve a comfortable retirement.

With this thought, I vowed to seek for a solution.

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Guaranty Trust Bank Plc Slower but persistent earnings growth in near term

At its full year 2018 analysts conference call and our follow up engagement, management guided to a 10% growth in loans over 2019, with focus on oil & gas sector, retail clients and manufacturing sector. Further, they guided that submissions have been made to unlock funds from the differentiated cash reserve ratio introduced by the MPC and awaiting approvals by the apex bank. Leveraging its retail presence, management expects 12% growth in deposit, 40% cost to income ratio, 9% net interest margin (NIM), and cost of risk and NPL ratio (coverage ratio above 100%) of below 1% and 5% respectively. Overall, management guided to PBT growth of 2% to N220 billion (8% YoY in FY 18).

We maintain our STRONG BUY rating on GUARANTY with a revised FVE of N49.66/share. GUARANTY trades at a FY 19E P/B of 2.1x, at a premium to ZENITH of 1.4x, which is justified given its strong and sustainable ROE. At current price, our expected dividend of N2.82 over FY 19E translates to a dividend yield of 8% (Zenith: 13.6%).

For the full report, please contact [email protected]

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ARM Research – Stock Recommendation for the Week , March 18

The equities market closed the week negative, with the NSE ASI shedding 2.45% WoW to close at 31,142.72 points while market capitalization lost N291.5 billion to N11.6 trillion. The downturn was driven by bearish sentiments in the Banking (-4.81%), Brewers (-1.80%), Cement (-2.42%), Personal Care (-1.22%), and Insurance (-0.23%) indices which offset gains in Food (+1.34%) and Oil and Gas (+0.11%) indices. Dissecting the sectoral performance, we saw sell pressure across bellwether stocks (GUARANTY: -5.09%, ZENITH: -11.82%, IB: -10.93%, GUINNESS: -4.69%, DANCEM: -2.56%, LAFARGE: -0.77%).

Zenith Bank Plc – STRONG BUY (FVE: N38.17): Following a mark down in its stock price, Zenith offers a more attractive entry point. The stock trades at a FY 19E P/B of 0.9x, at a discount to GTB of 1.3x. Our FVE of N38.17 translates to a STRONG BUY rating based on current pricing. Strong valuation for Zenith is hinged on i) expansion in assets yield from increase in loan book which would more than outweigh funding cost to support moderate expansion in NIM ii) increase in NIR due to resilience in fee income and ii) improvement in asset quality with non-performing loan (NPL) ratio of 4.5% and slower expansion in cost of risk (CoR) to 1.0%. At current price, expected dividend of N2.92 over FY 19E translates to a dividend yield of 13.3%.

Fidelity Bank Plc – BUY (FVE: N2.92): Fidelity is set to publish its FY 18 result next week. We expect higher net interest income and revaluation gains to support earnings over the last quarter. Over FY 18, we are optimistic on its earnings growth with EPS expected to expand 26% YoY to N0.82. Beyond our modelled expansion in Net Interest Margin over 2019, we expect further support from NIR (+19% YoY) during the year which will be central to earnings over 2019. Our estimates put PBT at N30 billion (+16% YoY) with EPS printing at `0.95 (+17% YoY).

Guinness Nigeria Plc – STRONG BUY (FVE: N77.31). Despite stiff competition across the brewery sector, we expect the wider portfolio mix of Guinness and gains from the Spirit segment to support a slower moderation in margins. Coupled with lower finance cost for after recent deleveraging of its FCY debt using proceeds from rights issue, we see improved profitability for the brewer.

Unilever Plc – STRONG BUY (FVE: N49.19): We have a STRONG BUY rating on UNILEVER with our FVE of N49.19 (+13.1% upside), supported by our expectation of strong growth from the food business over 2019, given its resilience over the last two years – having maintained a double-digit growth. In addition, given Unilever’s strong cash balance and our anticipation of slight uptick in yields, we expect the company to report a higher net finance income over the year.

Okomu Oil Palm Plc – STRONG BUY (FVE: N97.75): Over our forecast period, we anticipate volumes growth emanating from the harvest of fresh fruit bunches from its extension 2 plantation. Based on our expectation for volumes growth, accompanied by margin expansion, we raise our FVE to N97.75.

Kindly, visit ARM Research Portal for full stock reports. Or send a mail to [email protected]

 

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Access Bank Plc (ACCESS.NL): Impressive performance across income lines in Q4 18

Access Bank Plc (Access) full-year 2018 earnings released this morning showed EPS expansion of 53.2% YoY to N3.28 following material decline in loan-loss provision (-57% YoY to N14.7 billion) and increase in net interest income (+6.2% YoY to N173.6 billion). On the latter, we reckon that despite 19.1% YoY growth in interest income (with assets yield expanding 4bps YoY to 12.5%), the single-digit growth in net interest income was due to a faster increase in interest expense by 32% YoY (with related cost of fund expanding 46bps YoY) which pressured moderation in Net Interest Margin (NIMs) to 5.7% (-47bps YoY).

On asset quality, Access recorded 230bps YoY contraction in Non-Performing Loans (NPL) ratio to 2.5% (compared to GTB and Zenith of 7.3% and 5% respectively). Accordingly, the impact reflected in the lower provisioning during the year, with cost of risk contracting 100bps YoY to 0.7%. Elsewhere, we reckon that the bank Non-Interest Revenue (NIR) remained resilient during the year declining by 0.7% YoY (relative to our estimate 15% YoY decline) to N138.2 billion due to strong performance in net trading income over Q4 18, which more than outweighed declines in fee income (-49% YoY) and foreign exchange loss of N39.5 billion on the Other Income line.

The bank declared a final dividend of N0.25 which in addition to interim of N0.25 brings total payout to N0.50. The final dividend translates to a dividend yield of 4.2% on current pricing.

Impressive performance across income lines in Q4 18. Access Q4 standalone numbers was impressive with sturdy performance across income lines resulting in 38% QoQ growth in EPS to N1.11. The strong performance stemmed from double-digit growth in net interest income by 34% and NIR growth of 10% QoQ, both of which more than outweighed the surprise additional N6.3 billion loan loss provision during the period and higher operating expense (+6% QoQ). On NIM, the gains stemmed largely from growth in interest income of 21% QoQ following recovery in interest on investment securities (+94% QoQ) and strong outing on interest on cash and interbank lending (+255% QoQ) both of which offset decline on interest on loans (-11.3% QoQ) to support 226bps QoQ expansion in assets yield. On the other hand, funding cost over the quarter expanded +18bps QoQ to 5.3% with interest expense rising 11.2% QoQ. Accordingly, the stronger expansion in assets yield necessitated expansion in NIM by 252bps QoQ to 6.9%. For Interest expense, the QoQ increase emanated from growth in interest on interbank placements (+76% QoQ to N16.5 billion) and customers deposit (+2% QoQ to N30.4 billion).

The stock currently trades at a current P/B of 0.34x which is at a discount to peers of 0.76x. Our last communicated FVE on ACCESS is N11.80, however, we have a HOLD rating on the stock. We will revisit our numbers after further analysis and discussion with management.

The bank will be holding a teleconference call on Today, March 15, 2019 at 2pm Lagos Time (1pm London/ 3pm Johannesburg/ 9am New York) with its senior management. Click here for the presentation and here for registration link.

For the full report, send a mail to [email protected]

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Dangote Cement Plc – Competition caps earnings growth

DANGCEM posted an impressive growth in EPS by 91% YoY to N22.9 (missing our estimate of N13.52) over 2018. The deviation from our estimate stemmed largely from the long-awaited tax credit (N89.52 billion) which included reversal of tax provisions (N134 billion) made on the Obajana 4 and Ibese 3 & 4 lines for 2015 – 2017, as well as a tax charge of N44 billion based on a 15% effective tax rate for 2018 (inclusive of an extension of the additional two-year pioneer tax credit which is pending approval). However, we reckon that core earnings dragged over 2018 with PBT increasing modestly by 4% YoY to N300.81 billion, which was in line with our estimate of N303.21 billion.

Going into 2019, we maintain our optimism on DANGCEM and expect the company to sustain earnings growth, albeit at a still slower pace. Specifically, we expect PBT to expand modestly by 6% YoY and a steep decline in EPS by 32% YoY to N15.6 (reflecting the high base of 2018 due to the reversal of prior year tax benefits); excluding the impact of the tax reversals in 2018, forecasted 2019 EPS will grow 3% YoY. The slower growth in our forecast PBT stemmed from i) downward revision of our 2019 and 2020 volume growth to 10% and 6% to 25.96mt and 27.55mt respectively; ii) downward adjustment to revenue per ton, with average price for the group estimated at N35,790 per ton (lower by 3.1% YoY) largely driven by price erosion in Nigeria and the rest of Africa as competition intensifies; and (iii) reduction in our gross margin estimates to 57.8% from 58.3%. The impact of our adjustments culminated in a cut of our FVE on DANGCEM to N248.14 (Previous: N253.03). DANGCEM trades at 2019 EV/EBITDA of 9.8x which is at a discount to MEA peers of 12.74x. Accordingly, we maintain our STRONG BUY recommendation on the stock.

 

For the full report, please send a mail to [email protected]

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#ILoveMyFamily: My Wife Is A Genius

I laid against the bed headrest in our bedroom. I was scrolling through my social media news feeds but could hear my wife’s sonorous voice from the shower as she sang a familiar song.

It was Friday night but instead of going to watch a match at a viewing center, I decided to spend the evening with my wife. After a nice meal, I went to put finishing touches to the bookshelf I had been working on. My wife came to join me at the workshop. We were chatting as I sprayed the shelf and left it to dry.

She admired my craftmanship, took several photos of the masterpiece with my phone and posted them online while tagging her own social handles.

There were many good comments on the posts already. A couple of friends wanted to know how they can get the same piece or something similar. One wanted to know where my workshop was.

I also got a couple of hits in the inbox. I felt really elated at the positive reviews and my mind went back to the discussion I had with my wife in the previous week about leaving my present job and my resolve not to give up on the pursuit of my dream of owning a carpentry business outfit.

My wife joined me in the bedroom ready to turn in for the night.

“What are you smiling at?” She asked because of the wide grin I had splattered across my face.

“Look at this.” I proudly passed the phone to her so she could see the wonderful reviews too.

She smiled broadly too, “Well, they just discovered what I have always known sweetheart. You are very talented with your hands and tools!”

I could almost feel my heart expand some more.

“Sure you are not going to let all this praise go to waste now, would you?” She wiggled her eyebrows at me smiling and tucking us both into bed. I turned out the bedroom light.

I sighed with a bit of regret in the brief silence.

“I only have a little bit of time to pursue personal interests on the weekends, I don’t have the time to take up these offers now on a full scale. I will send them my regrets in the morning.” I responded finally.

My wife was quiet for a little while as if in deep thought.

“Darling, I know how much carpentry gives you joy and that you haven’t given up on looking for a way to break into the industry. Why don’t you take up an insurance plan at ARM just like the one we took for my restaurant?”

I turned towards her and tried to peer at her in the darkness as she spoke.

“In fact, we can save towards your carpentry business gradually using  ARM Savings Plus the same way we are saving for my food business.”

“Thank you, honey, this means a lot to me but like you pointed out last week, we can’t afford any more strain on our income at least for now.”

“Yes, that true but you save for the carpentry workshop from the proceeds you get from helping our neighbors fix their stuff or making simple furniture like your cabinet for those who want them. Of course, you work only on weekends and no heavy duty stuff,” She concluded. I could see her smile in the dark.

“Ain’t you a genius woman!”

She laughed out loud and we hugged tightly as I decided to work out the modalities of her ideas by morning.

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ARM Securities Partners with BMCE Capital on Global Research

Casablanca/Lagos, March 11^th, 2019

BMCE Capital and ARM announce the signature of a partnership in terms of Global Research aiming at providing their clients with a broader access to African markets with a coverage including Morocco, Tunisia Cote d’Ivoire, Nigeria, Ghana and Kenya.

This agreement reinforces the Pan African offer of the two partners that pool their resources and publications for a local and international release within the framework of African Securities Network – ASN®.

This partnership completes the already established cooperation in terms of brokerage activity allowing our global clients – local and international – to benefit from trading and high level execution services through all the covered Stock Exchanges.

About BMCE Capital:

BMCE Capital is the Investment Banking division of BMCE Bank Of Africa, and operates in all of the capital market activities, Brokerage, Asset Management, Advisory, Equity Research and Global Custody, covering Morocco, Tunisia and West Africa.

About ARM Securities:

ARM Securities is the brokerage and Investment Banking division of Asset & Resource Management (ARM) Group – Nigeria’s largest and most reputable non-bank financial services provider.

ARM securities provide unrivalled access, knowledge and execution in equity and fixed-income markets in Nigeria.

The company is positioned as a recognized brokerage and financial advisory firm in Nigeria.

ARM Securities’ in-depth research reports has gained widespread recognition and highly ranked across a broad range of asset classes and securities in Nigeria.

About ASN®:

African Securities Network (ASN®) is a registered trademark used for commercial purposes for the dissemination of BMCE Capital and its subsidiaries’ own publications in Casablanca, Tunis and Abidjan as well as in co-branding with its partners in Africa.

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