Economy
Four Best-Performing Equity Mutual Funds of Q1 2018
By Quantitative Financial Analytics Ltd
Nigeria’s equity market witnessed some calmness and subdued volatility in the first quarter of the year.
Quantitative Financial Analytics Realized Volatility index (NSErealVol) stood at 12.98, as at March 29, 2018 down from 15.68 recorded by the end of the previous year.
In addition, inflation in Nigeria moderated while the Dollar exchange rate stabilized around the N360 range within the quarter even as yields continued to fall along all maturities. All those had some positive effect on equity market which got translated into the equity mutual funds.
How Did Energy Sector Perform in Q1?
During the Q1 of 2018, the Nigeria All Share Index (ASI) increased by 3,261.32 points representing a positive performance of 8.53 percent. The market grew by 15 percent in Jan, 2018, losing marginally by 2 percent and 4 percent in February and March to end the quarter with a positive return.
In spite of the market performance within the quarter, we have identified four mutual funds that did much better in the quarter. Here they are:
Meristem Equity Mutual Fund
Meristem Equity Market fund seeks capital appreciation for the long run by investing in a basket of high quality equity securities in Nigeria. The fund gained about N95 million or 46 percent in 2017 and has gained about 52.7 million or 17 percent in Q1, 2018, according to our analysts. In Q1, 2018, it attracted an estimated 8.5 million of inflows to leave its net asset value at N364 million by the end of the first quarter.
Stanbic IBTC Aggressive Fund
Stanbic IBTC Aggressive fund seeks to provide liquidity whilst maintaining low to medium volatility of return over the long-run. The fund invests a minimum of 60 percent of its assets in the equity market and the other 40 percent in fixed income market according to its fact sheet. Stanbic IBTC Aggressive fund gained about N95 million or 48 percent in 2017 and has gained about N43.6 million or 12.58 percent in Q1, 2018, according to our analysts.
In 2017, it suffered a net outflow of about N10 million but in Q1, 2018, it attracted an estimated N169 million of inflows to leave its net asset value at N502 million by the end of the first quarter
Frontier Fund
The Frontier Fund has the primary objective of achieving long-term capital appreciation to unit holders by investing in carefully selected money and capital market instruments.
The Fund gained about N42 million or 22 percent in 2017 and has gained about N27 million or 10.55 percent in Q1, 2018, according to our analysts.
In 2017, it suffered a net outflow of about N3 million but has attracted net inflow of N5 million in Q1, 2018 to leave its net asset value at N286 million by the end of the first quarter
UBA Equity Fund
The United Capital Equity Fund Invests in quoted equities that are traded on the Floor of the Nigerian Stock Exchange (NSE). Its objective is to achieve high returns over a medium to long-term period by investing in select portfolio of equity securities according to its fact sheet.
The Fund which is suitable for investors with a long-term outlook gained about N420 million or 45.8 percent in 2017 and has gained about N145 million or 10.45 percent in Q1, 2018, according to our analysts.
In 2017, it suffered a net outflow of about N122 million and has also suffered about N15 million net outflow in Q1, 2018 to leave its net asset value at N1.5 billion by the end of the first quarter.
Though these funds have been stellar in their performance, it is worthy of note to state that past performance is not a guarantee of future performance.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange weakened by 0.22 per cent on Tuesday, April 28, with the market capitalisation down by N4.8 billion to N2.420 trillion from N2.425 trillion, and the NASD Unlisted Security Index (NSI) down by 9.01 points to 4,044.96 points from 4,053.97 points.
During the session, the price of Central Securities Clearing System (CSCS) Plc went down by N1.82 to N767.05 per share from N78.87 per share, while FrieslandCampina Wamco Nigeria Plc appreciated by N1.90 to N100.00 per unit from N98.10 per unit.
According to data, the value of trades increased by 265.7 per cent to N27.1 million from N7.4 million units, and the volume of transactions surged by 305.2 per cent to 1.3 million units from 319,831 units, while the number of deals decreased by 6.9 per cent to 27 deals from 29 deals.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with the sale of 3.4 billion units valued at N8.4 billion, followed by CSCS Plc with 59.8 million units exchanged for N4.0 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.
GNI Plc also finished as the most traded stock by volume on a year-to-date basis, with a turnover of 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
By Adedapo Adesanya
Pressure is beginning to mount on the Nigerian Naira in the different segments of the foreign exchange (FX) market despite an oil windfall triggered by the Middle East crisis.
On Monday, April 27, the domestic currency further weakened against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) by N16.47 or 1.2 per cent to N1,380.71/$1 from the previous day’s N1,364.24/$1.
It was not different against the Pound Sterling in the same market window, as it lost N16.04 to trade at N1,863.76/£1 versus Monday’s closing rate of N1,847.72/£1, and against the Euro, it slipped by N12.72 to close at N1,615.01/€1 versus N1,602.29/€1.
The Naira also depreciated against the Dollar at the black market yesterday by N5 to quote at N1,390/$1 compared with the previous price of N1,385, and at the GTBank forex counter, it further crashed by N9 to settle at N1,379/$1 compared with the preceding session’s N1,370/$1.
The continued decline of the Naira comes as traders increasingly seek other safe-haven currencies amid continued global disruptions.
The benefit awash in the global market is making foreign portfolio investors stay short in Nigerian markets. Despite this, the daily FX publication released showed that interbank turnover rose to $98.829 million across 78 deals, up from $76.65 million.
Meanwhile, the cryptocurrency market remained cautious, with Bitcoin (BTC) trading at $77,216.66 despite surging oil prices and geopolitical tensions over a potential extended US naval blockade of the Strait of Hormuz.
Analysts say the supply overhang has finally dried up, and the sellers who were spooked by macro shifts or quantum fears have already exited, leaving the market much thinner on the sell-side.
Investors will await decisions made by central banks this week. The US Federal Reserve will announce its rate decision later on Wednesday, while the European Central Bank (ECB) follows on Thursday.
Ethereum (ETH) gained 1.5 per cent to trade at $2,324.59, Dogecoin (DOGE) chalked up 1.4 per cent to sell for $0.1016, Solana (SOL) appreciated by 0.6 per cent to $84.85, Cardano (ADA) grew by 0.5 per cent to $0.2483, and Binance Coin (BNB) advanced by 0.2 per cent to $627.15.
However, TRON (TRX) depreciated by 0.6 per cent to $0.3224, and Ripple (XRP) lost 0.03 per cent to sell at $1.39, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) were unchanged at $1.00 each.
By Adedapo Adesanya
Oil was up by nearly 3 per cent on Tuesday as persistent worries about supply constraints from the closed Strait of Hormuz continued, with Brent futures for June rising by $3.03 or 2.8 per cent to $111.26 a barrel, and the US West Texas Intermediate (WTI) crude futures growing by $3.56 or 3.7 per cent to $99.93 a barrel.
An earlier round of negotiations between the United States and Iran collapsed last week after face-to-face talks failed.
Ship-tracking data showed significant disruptions in the region, with six Iranian oil tankers forced to turn back due to the US blockade, but some traffic is still moving.
Prices trimmed some of the advances after the United Arab Emirates (UAE), the fourth-largest producer in the Organisation of the Petroleum Exporting Countries (OPEC), said on Tuesday it would exit the group on this Friday, May 1, 2026.
This dealt a blow to the oil-exporting group and its de facto leader, Saudi Arabia.
The UAE could quickly add between 1 million and 1.5 million barrels per day of output. However, with the Strait of Hormuz effectively closed, analysts said that there’s nowhere for that supply to go.
The UAE joined OPEC in 1967, but tension with Saudi Arabia over production quotas has been building for years.
Under the OPEC+ deal, the country has been held to roughly 3 million barrels per day while sitting on capacity above 4 million. It has been pushing toward 5 million barrels per day by 2027, and that target is hard to achieve with quotas built around someone else’s view of the market.
The war in Yemen broke whatever was left of diplomatic patience.
President Donald Trump said he was unhappy with the latest Iranian proposal to end the war. The proposal would avoid addressing the nuclear programme until hostilities cease and Gulf shipping disputes are resolved.
The Idemitsu Maru, a Panama-flagged tanker carrying 2 million barrels of Saudi oil, and an LNG tanker managed by the Abu Dhabi National Oil Company (ADNOC) crossed the Strait on Tuesday, shipping data showed.
Vortexa data showed that the amount of crude oil held around the world on tankers that have been stationary for at least seven days rose to 153.11 million barrels as of April 24.
The American Petroleum Institute (API) estimated that crude oil inventories in the United States fell by 1.79 million barrels in the week ending April 24. The official data from the US Energy Information Administration (EIA) will be released later on Wednesday.
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