Economy
Investors Snub Equity Mutual Funds Despite Stellar Performance
By Quantitative Financial Analytics
The year 2017 will go down the annals of financial history in Nigeria as the year that mutual funds visited investors with all manner of blessedness.
On average, equity-based funds returned 29.03 percent with the likes of ARM Aggressive fund retuning 58.06 percent, Legacy Equity Fund, 53.74 percent, Coral Growth Fund, 52.79 percent and ACAP Canary Growth Fund recording the lowest performance among equity funds with a whopping 16.57 percent.
In the same likeness, ETFs which are predominantly equity based, returned 38.78 percent on average, with Vetiva Banking ETF recording 50.25 percent, New Gold ETF, 47.87 percent and Vetiva Griffin 30 ETF, 45.98 percent.
All the Equity based funds and ETFs made gains of not less than 16 percent in 2017.
Surprisingly, a flow analysis carried out by Quantitative Financial Analytics’ analysts indicate that investors did not take advantage of the equity market performance. Cash flow analysis is a way of measuring investors’ attraction or appetite for mutual funds.
While every category of mutual funds recorded net inflows in 2017, only the equity fund and ethical fund categories recorded net out flow.
In 2017, the total estimated inflow to the industry stood at approximately N249 billion while outflows amounted to N63 billion leaving a net inflow of N186 billion.
As usual, money market funds attracted the greatest inflow in the amount of N221 billion but suffered outflows amounting to N40 billion, resulting in a net inflow of N181 billion.
Bond or fixed income funds attracted inflows of N18 billion while suffering outflows of N11 billion, leaving it with net inflow of N7 billion. The other categories of Real estate funds, ETFs, and Balanced funds, all ended the year with net inflows but the story is different for equity and ethical funds.
In the year under consideration, equity funds received N4 billion of inflows but suffered outflows in the sum of N8 billion, amounting to a net outflow of N4 billion.
As at March 2, 2018, the total asset of mutual funds in Nigeria was N512 billion out of which only 6.5 percent (N33 billion) is in equity funds.
Though the trend does not seem to be reversing so far in 2018, there appears to be some attraction to equity funds.
Within the first two months of 2018, the industry attracted a total of N98 billion inflows with N14 billion outflows. While N89 billion of those went to money market funds which suffered N10 billion of outflows (net-flow N79 billion), equity funds attracted N2 billion inflows and suffered N0.9 billion in outflows leaving that category of funds with positive net flow.
The reason for the lack of appetite or likeness for equity mutual funds could be because investors are still reeling from the losses made from the market crash of 2009, but for how long, one may ask.
Another reason could be the risk disposition of investors. While money market funds may not be yielding as much in bull markets, they tend to be less risky than equity funds and as such attractive to risk averse investors.
Yet another reason could be lack of data and information. In the Nigerian mutual fund industry, it is easy to get information on money market yields but not so easy to get such information on other categories of mutual funds.
This issue is even exacerbated by some blogs or articles on fund performance being thrown out there. Some of those blog/articles tend to overstate the performance of money market funds while understating that of other categories of funds because such blogs/articles ignore the effects of cash flows on performance calculations.
By lumping cashflows into the fund, they run the risk of interpreting changes in funds’ net asset value as due solely to performance. This erroneous interpretation tends to punish funds that suffer net outflows while rewarding those with net inflows.
It is important however, to note that past performance does not guarantee future performance so much such that the stellar performance of equity funds in 2017 does not indicate that they will perform as well or better in the future, so invest with caution.
Economy
Onne Area 11 Customs Command Surpasses 2024 Revenue Target by N16bn
By Bon Peter
The Area 11 Command of the Nigeria Customs Service (NCS) in Onne, Rivers State surpassed its 2024 annual revenue target by N16 billion.
This information was revealed to newsmen by the Customs Area Controller of the Command, Mr Mohammed Babandede, at a news conference last week.
He also disclosed that the command recently intercepted 12 containers of illicit drugs worth over N20.30 billion concealed in various items.
According to him, the content of the seized container included 1,721,100 bottles of 100ml cough syrup codeine, 510,000 tablets of 50mg Really Extra Diclofenac, 7,100,000 tablets of 225mg Royal apple Tramadol and Tramaking, 3,461 pieces of sanitary ware fittings used for concealment, 840 pieces of Chilly cutter used for concealment, and 153 cartons of TVS rubber.
“Our vigilant officers and men have successfully intercepted and seized an additional 12 containers (40 feet) of illicit medicine.
“This is a testament to our unwavering commitment to safeguarding public health, ensuring security of our nation and compliance with Nigeria’s import regulations. This also justifies our commitment to trade facilitation, transparency, effective and efficient service,” he said.
He said last year, the command received the support of different stakeholders, thanking them for working with the agency to achieve success.
“We appreciate the continued support and collaboration of all stakeholders, including the media, in amplifying our message and efforts to combat smuggling,” he said.
Mr Babandede stated that, “It is worth noting that the morale and dedication of our officers have been significantly bolstered by the Comptroller-General of Customs’ award, recognizing Area 2 Command as the Best Command in Anti-Smuggling Operations.
“This honour has further strengthened our resolve, and I assure you that we will not relent in performing our duties to protect the lives and well-being of Nigerians.”
The customs chief said earlier last year, the command was given a revenue target of N618 billion but as of December 31, 2024, it generated N634 billion, higher than the N321 billion recorded in 2023, promising to do more in 2025.
Economy
Stock Market Gains N248bn to Close at N63.166trn
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited appreciated by 0.39 per cent on Friday as the demand for local equities continued to increase.
During the final trading session of the week, the insurance maintained its upward trend with a growth of 7.81 per cent as the banking index appreciated by 1.08 per cent, the consumer goods sector rose by 0.52 per cent, and the industrial goods counter expanded by 0.33 per cent, while the energy space went down by 0.49 per cent.
At the close of business, the All-Share Index (ASI) jumped by 406.19 points to 103,586.33 points from 103,180.14 points, and the market capitalisation increased by N248 billion to N63.166 trillion from N62.918 trillion.
The bourse recorded 67 appreciating shares and 11 depreciating shares, implying a positive market breadth index and strong investor sentiment.
Chams, Omatek, NCR Nigeria, Learn Africa, and Regency Alliance topped the gainers’ table after they gained 10.00 per cent each to finish at N2.31, 88 Kobo, N6.05, N4.95, and 88 Kobo, respectively.
On the flip side, TotalEnergies lost 9.74 per cent to trade at N630.00, CWG depreciated by 6.04 per cent to close at N7.00, Thomas Wyatt went down by 5.26 per cent to N1.80, ABC Transport crumbled by 4.07 per cent to N1.18, and UAC Nigeria shed 3.19 per cent to N31.90.
Yesterday, investors traded 709.3 million stocks valued at N8.2 billion in 13,593 deals compared with the 829.8 million stocks worth N5.7 billion transacted in 11,752 deals on Thursday, representing a slowdown in the trading volume by 14.52 per cent and a rise in the trading value and number of deals by 43.86 per cent and 15.67 per cent, respectively.
At the close of business, Chams topped the activity log with 58.1 million equities sold for N133.8 million, Veritas Kapital traded 55.1 million shares valued at N89.2 million, Abbey Mortgage Bank exchanged 50.1 million stocks for N165.5 million, AIICO Insurance transacted 39.7 million equities worth N68.3 million, and NPF Microfinance Bank sold 34.3 million stocks valued at N64.0 million.
Economy
NASD OTC Exchange Extends Good Start to New Trading Year
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its positive start to the year with a 0.08 per cent rise on Friday, January 3.
The market saw a gain of N840 million, with the value of the alternative bourse growing to N1.046 trillion from the N1.045 trillion it closed a day earlier as the NASD Unlisted Security Index (NSI) made an addition of 2.43 points to wrap the session at 3,052.34 points compared with 3,049.91 points recorded at the previous session.
The appreciation posted yesterday at the NASD OTC exchange was caused by two price gainers led by Industrial and General Insurance (IGI) Plc which jumped by 2 Kobo to end at 20 Kobo per share compared with the preceding session’s 18 Kobo per share and UBN Property Plc, which improved its value by 16 Kobo to close at N1.98 per unit, in contrast to Thursday’s closing price f N1.82 per unit.
The market posted a price loser, which was FrieslandCampina Wamco Nigeria Plc as it dropped 18 Kobo to finish at N39.76 share versus the previous day’s N39.94 per share.
There was an 856.6 per cent surge in the volume of securities traded in the session to 11.3 million units from the 1.2 million units traded in the preceding session.
Equally, there was a jump in the value of shares traded yesterday by 1,078.4 per cent to N56.8 million from the N4.8 million made previously, and the number of deals increased by 22.7 per cent to 27 deals from 22 deals.
FrieslandCampina Wamco Nigeria Plc was the most active stock by value (year-to-date) with 1.4 units worth N55.8 million, IGI Plc came next with 10.6 million units valued at N2.1 million, and 11 Plc was in third with 6,45 units sold for N1.4 million.
IGI Plc closed the day as the most active stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, FrieslandCampina Wamco Nigeria Plc came next with 1.4 million units valued at N55.8 million, and UBN Property Plc followed with 275,740 units worth N545,965.
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