Economy
Nigerian Palm Oil Sector: Waxing Stronger Under Policy Cover

By ARM Securities
In contrast to the macro-induced sell-offs across the broad equities market in 2016, palm oil producers had a stellar year as the policy changes in response to the FX pressures handed the sector a lifeline.
Specifically, CBN’s proscription of FX access for palm oil imports changed sector dynamics as it provided a competitive edge in pricing for local producers over CPO importers.
Accordingly, the sector reported stronger revenues and higher margins in the period which fuelled the positive price performance over 2016 (vs NSEASI: -6%). In this report, we outline our views regarding the drivers of 2016 performance and set out our views ahead of FY 16E earnings releases.
In the aftermath of CBN policy pronouncement regarding CPO imports, domestic prices surged 144 percent over 2016 to N661.4/kg as importers who account for 29% of local supply cutback on imports.
While the upsurge in CPO prices drove sector revenue to a record high of N22.8 billion, its impact was more pronounced on operating margin (+12pps YoY to 53%) as the largely domestic sourcing of raw materials and labour kept cost (COGS and OPEX) in check.
Another positive policy handout for the sector was CBN’s renewed supply of concessionary loans, which given already weak naira outlook drove coverage companies to change the currency character of their debt.
FCY borrowings as a share of total debt shrank 5pps YoY to 13.8% while total borrowing cost contracted 7% YoY over the review period.
Overall, reflecting robust top-line gains and financial efficiency, we estimate that core earnings should climb 108% YoY to a record high of N8.1 billion in FY 16.
That said, despite our strong view on earnings, we expect dividend payout ratio to come below trend levels as management of coverage companies guides to capacity expansion plans from retained earnings.
We project Presco’s 2016E DPS of N2.02 to be higher than that of its domestic peer, Okomu (N1.77).
Notwithstanding strong YTD price performance, we believe current pricing is yet to fully reflect the stellar earnings performance reported so far, but more importantly, the robust earnings outlook. Particularly, at 9.1x, the sector’s mean P/E remains cheap relative to trend (3 year: 11.4x, 5 year: 11.3x) and Bloomberg Africa peers (10.1x). Across our coverage, we prefer Presco due to its larger oil palm plantation (2015 mature area hectares of 10,949 vs. 8,671 for Okomu) and homogenous product mix, which makes it a greater beneficiary of improved conditions in the domestic CPO market.
Accordingly, our FVE embodies a 46 percent upside from current pricing for Presco (N68.84) relative to 40 percent for Okomu (N67.43) and we have a BUY rating for both companies.
Full report here: https://secure.arm.com.ng/research/EquityReports/Nigerian%20Palm%20Oil%20Sector%20-%20Waxing%20strong%20under%20policy%20cover.pdf
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Economy
BNB Price Reflects Changing Dynamics in the Digital Asset Market
Economy
NASD Unlisted Security Index Crosses 4,000-point Benchmark Again
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange achieved a milestone on Friday, April 24, 2026, after five securities on the platform helped with a 1.85 per cent growth.
Data showed that the NASD Unlisted Security Index (NSI) again crossed the 4,000-point benchmark yesterday.
The index chalked up 73.64 points during the trading day to close at 4,052.59 points compared with the preceding session’s 3,978.95 points, while the market capitalisation added N5.38 billion to finish at N2.424 trillion versus Thursday’s closing value of N2.380 trillion.
The price gainers were led by Okitipupa Plc, which grew by N25.00 to sell at N305.00 per share compared with the previous price of N280.00 per share. Central Securities Clearing System (CSCS) Plc gained N6.92 to close at N76.26 per unit versus N69.34 per unit, Afriland Properties Plc appreciated by N1.00 to N17.00 per share from N18.00 per share, FrieslandCampina Wamco Nigeria Plc improved by 55 Kobo to N99.55 per unit from N99.00 per unit, and Food Concepts Plc increased by 5 Kobo to N2.70 per share from N2.65 per share.
However, there was a price loser, MRS Oil, which dipped by N21.75 to N195.75 per unit from N217.50 per unit.
During the final session of the week, the value of securities jumped 75.2 per cent to N41.3 million from N23.6 million units, and the number of deals expanded by 62.9 per cent to 44 deals from 27 deals, while the volume of securities declined marginally by 0.9 per cent to 447,403 units from 451,522 units.
At the close of trades, Great Nigeria Insurance (GNI) Plc was the most traded stock by volume (year-to-date) with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units valued at N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units traded for N1.2 billion.
GNI was also the most active stock by value (year-to-date) with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 59.6 million units transacted for N4.0 billion, and Okitipupa Plc with 27.8 million units exchanged for N1.9 billion.
Economy
Naira Slips to N1,358/$1 as FX Reserves, Policy Uncertainty Concerns
By Adedapo Adesanya
It was not a good day for the Nigerian Naira in the currency market on Friday, April 24, as its value depreciated against the major foreign currencies at the close of transactions.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX), it lost N4.53 or 0.33 per cent against the United States Dollar yesterday to trade at N1,358.44/$1, in contrast to the N1,353.91/$1 it was exchanged on Thursday.
Equally, the domestic currency slipped against the Pound Sterling in the official market during the session by N8.14 to close at N1,834.02/£1, compared with the previous rate of N1,825.88/£1 and dropped N8.01 against the Euro to sell at N1,590.73/€1 versus N1,582.72/€1.
Also, the Naira depreciated against the US Dollar at the GTBank FX desk on Friday by N4 to quote at N1,370/$1 compared with the previous session’s N1,366/$1, and at the parallel market, it depleted by N5 to settle at N1,380/$1 versus the preceding day’s N1,375/$1.
Data published by the Central Bank of Nigeria (CBN) indicated that NFEM interbank turnover surged to N43.562 million across 68 deals, up from N28.117 million the previous day.
Despite the CBN’s reassurance that the recent drop in external reserves is not worrisome, the market remains unsettled by persistent concerns over liquidity constraints, policy transparency, and weakening confidence in Nigeria’s FX market as gross reserves continue to decline to $48.4 billion.
The outlook for the Dollar appears supported by broader macro risks, including elevated oil prices tied to the tanker traffic disruptions in the Strait of Hormuz and a continued US-Iran standoff over ceasefire negotiations.
A look at the digital currency market showed that investors are sitting on the edge as the US Dollar rebounded amid geopolitical and inflation risks despite continued inflows into US spot bitcoin Exchange Traded Funds (ETFs).
Solana (SOL) rose by 1.2 per cent to sell $86.45, Cardano (ADA) appreciated by 1.1 per cent to $0.2517, Dogecoin (DOGE) grew by 0.9 per cent to $0.0989, Ripple (XRP) improved by 0.3 per cent to $1.43, Ethereum (ETH) soared by 0.2 per cent to $2,316.83, and Binance Coin (BNB) chalked up 0.1 per cent to sell for $637.44.
However, TRON (TRX) depreciated by 1.3 per cent to $0.3235, and Bitcoin (BTC) lost 0.2 per cent to close at $77,562.27, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
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