Nigeria | NGX

In the Telecommunication Sector report 2020 (“A Transformative Past, Resilient Future”), we opined that the sector would remain resilient as the digital economy would boom during the lockdown. In line with our expectation, this sector powered the economy during the pandemic in 2020 as it grew the fastest by 15.9% y/y and accounted for 12.2% of the GDP. However, the sector is not at full power yet given weak broad-band penetration at 45.0% (although an improvement from previous year), and the huge prospects for mobile money under the right regulatory framework...

The Afrinvest weekly sentiments indicator weakened to 1.4x (from 1.9x). We anticipate a possible rebound in market performance this week, as investors position ahead of H1:2021 corporate releases and take advantage of cheap attractive stocks.

Trading in Guaranty Trust Bank shares was suspended on Friday in preparation for the delisting of the bank and subsequent listing of the new Holding Company (Holdco). According to the bank's management, GTBank is adjusting its operating model and service offerings to remain relevant in the financial services sector and position the bank for sustainable long-term growth given the increasing evolution of businesses across the globe.

The Afrinvest weekly sentiments indicator strengthened to 1.9x from 1.8x in the previous week. This week, We expect to see some bargain hunting in early trades as investors seek to take position in bellwethers that have fallen to attractive entry prices. However, we believe the negative performance will be sustained in the absence of a positive catalyst.

In our Insurance Sector report 2020 (“Recapitalisation – Launching into the Deep”), we highlighted the global insurance sector performance in 2019. The sector premiums reached $6.3tn in 2019 after scaling the $5.0tn mark in 2018 as the non-life segment surpassed forecast and reported a 3.5% growth in premiums to $3.4tn while the life segment premiums also increased 2.2% to $2.9bn mainly due to a recovery in China. Sigma research had expected both non-life and life premiums to contract by 1.0% and 1.5% respectively in 2020 similar to that of the Global Financial Crisis (GFC) in 2008 due to the effects of the pandemic on the insurance business.

Save for ACCESS and ETI, our coverage banks experienced contractions in interest income in Q1’21, mostly in line with the 161bps moderation in average T-bill rates to 1.3%. In addition, 66.7% of the banks recorded pullbacks in the P&L line item even though the balance of their interest- earning investment securities was notably higher in the quarter...