Vanguard Markets, July 21, 2014 edition

Vanguard Markets | Monday, July 21, 2014 | Issue 002

INTERVIEW

A cerebral approach to transactions at Olaniwun Ajayi LP ! Deal Engineer - page 3 Wolemi Esan

C-SUITE

Inside

Manufacturing roars ahead This is in line with growth rates of 14.2 per cent in the construction sector against 9.4 percent in 2012, and 12 per cent in the real estate sector versus 5.6 percent in the previous year. The take-off of the Nigerian Mortgage Refinance Corporation (NMRC) and the passing of the Pension Law Reform will give added fillip to home ownership in coming years further boosting the sector and its contribution to GDP growth.

Not so fast African wax fabrics mill

Source: shaddersafrica.com

The National Bureau of Statistics (NBS) has released the first data set of growth rates since the country rebased its gross domestic product (GDP) in April. It reviews downward the 2013 national growth rate by 1.9 per cent from 7.4 per cent to 5.5 per cent. A careful study of the data confirms the maxim that the higher up the national GDP goes, the cooler the growth rate becomes. Bismarck Rewane, chief executive of Financial Derivatives, a consulting firm, observed said that ‘it is much easier to grow when you are small than when you are big.’

But the downward revision of the country’s growth is not the real story. That lies in the interesting trends revealed by the data.

Demographics is King Yvonne Mhango, sub-Saharan Africa economist at Renaissance Capital, in a report ‘Nigeria’s GDP: Bigger but Slower’ points out that the data

Annual GDP Growth

Real GDP Growth

7%

8% Nigeria

6%

Old GDP Series New GDP Series

7%

5%

6%

4%

Sub-Saharan Africa

3%

5% 4%

‘12

‘13 ‘14f ‘15f ‘16f

‘11

‘12

‘13

Source: World Bank

Source: National Bureau of Statistic, Central Bank of Nigeria

shows the nuggets in the Nigerian economy are not to be found in the oil and telecoms sectors as generally presumed.

Instead, they are in manufacturing, specifically food, cement, and textile, as well as real estate.

These are poised to benefit from the country’s booming population, and growing middle class. Despite the challenges faced in the power sector, manufacturing recorded solid growth of 22 per cent or a good one-third of total revised growth. This indicates the huge demand and market size for

producers in these beneficiary sectors. For example, the food, beverages, and tobacco subsector grew to 12 per cent – or almost half of total manufacturing quota - in 2013 from 7 per cent in the preceding year.

Real estate is another dynamic sector. This should come as no surprise. Although it is generally agreed that valuations are excessive there is no debate that the rate of development in its cities is phenomenal. Cement, which makes up 1 per cent of GDP, grew by 25 percent from 14 per cent in 2012 to 39 per cent in 2013.

Mhango is clear that ‘telecoms growth is in the past and the sector has matured’.

The issue the GSM companies are facing is a structural one, not one of tightening in disposable income as many commentators have noted about the brewery sector. Nigerians is a phone-saturated country. Beyond the din and ambiance of indistinguishable promos, most subscribers simply ignore the confusing menu of packages cast before them. In 2013, MTN, the market leader, added 9.3 million new subscribers but managed to grow revenues only by 5.7 per cent in the face of what the company describes as ‘aggressive competition and a difficult operating environment.’

This may have an unintended consequence. If growth is indeed slowing in the sector it means that there are fewer places to invest the huge revenues being generated by these companies. Therefore, the demand by Arunma Oteh, director-general of the Securities and Exchange Commission, and Oscar Onyeama, her

counterpart at the Nigerian Stock Exchange, that these companies be compelled to list makes a lot more sense. Slowing growth is evidence that companies in the sector are transitioning into the cash-cow phase, aka dividend distribution era. This will be a good thing.

Your listing or your life

A proposed bill to compel companies with either more than N40 billion in shareholders’ funds or over N80 billion in assets to list on the NSE raises serious questions.

Any cause for alarm?

According to DaMina Advisors, a London-based risk research, and consulting firm, the decline is not good news coming on the heels of growing concern over the spread of the Boko Haram terrorist threat to the commercial capital of Lagos.

DaMina analysts do not believe that a 4.5 per cent growth rate is unthinkable. If the foreign share of transactions on the NSE drop below the current 45 per cent suggesting capital flight, it will remove the cushion undergirding the high speculative forward price earnings multiples of many listed Nigerian companies.’ This could happen if a ‘combination of prolonged anaemic economic growth stagnation, falling oil exports, a fast depleted forex reserve stock and declining equity market valuations, which may be more proximate than is currently apparent.’ For the country’s policy-makers, the gallows consolation is that foreign investors looking for sub-Saharan exposure have few alternative choices. With a 2013 growth rate of 1.9 per cent, South Africa holds little attraction, and the prosperity of a growing number of regional economies are tightly correlated with Nigeria’s.

! Page 2

Back on the throne

Jim Ovia, founder of Zenith Bank, has resumed as chairman of Zenith Bank. This comes as no surprise to many who knew it was only a matter of time before he returned to what many call the Goldman Sachs of Nigeria.

! Page 2

Crossed fingers for Q2 earnings

Companies are set to begin releasing second quarter results.

What lies in store?

! Page 6

Fixed Income & Forex

FGN Bonds & TBills 100B

FGN Bonds Treasury Bills

12.0

75B

11.5

50B

11.0

25B

10.5

0B

1M 2M

NITTY

3M 6M

9M 12M

10.0 04/07

09/07

14/07

17/07

O/N 1M

NIBOR 15.0

3M 6M

10/07

15/07

18/07

163.0

14.0

162.7

13.0

162.4

12.0

162.1

11.0

161.8

10.0 07/07

Bid Ask

FX ($/N)

161.5 07/07

10/07

15/07

18/07

07/07

10/07

15/07

18/07 Source: FMDQ

2

INSIGHT

VM | Monday, July 21, 2014 | Issue 002

JAYWALKER

Listing by Order Should companies be forced to list their shares on the Nigerian Stock Exchange based on arbitrary numbers such the size of shareholders’ funds and the value of assets? The matter is not so straightforward.

Obiora Onyeaso obiora.onyeaso@customsstreet.com

Early this month, a bill introduced by Hon. Chris Azubogu, APGA - Nnewi North / South and Ekwusigo, to compel companies with assets worth more than N80 billion or shareholders’ funds that exceed N40 billion to list on the Nigerian Stock Exchange passed 2nd reading. In the past, similar calls for such obligatory initial public offerings have come from voices as diverse as labour unions, retail shareholder associations, and market regulators.

In the view of Hon. Ekwusigo the bill would assist

the companies to raise cheap funds in contrast to bank loans and the concomitant high interest rates. Supported

by Leo Ogor, PDP – Isoko North/ Isoko South, the Deputy House Leader, he argued that if passed the bill would enable more Nigerians to participate in the upside of the national economy.

Hon. Fort Dike, PDP – Ihiala, disagrees with this position.

Known for speaking his mind, he stated that the proposed law is ‘anti-business because it will be in conflict with the general ideas of investment in the country and make the parliament look like it lacks business knowledge.’

The decision to list should be at the sole discretion of boards, who owe allegiance to the best interests of their shareholders, employees, and customers. Perhaps, the debate should be inverted. Instead of companies that fall within these arbitrary categories being forced to list and penalized for not doing so, they should be given incentives for doing so.

Taking the arguments presented by sponsors of the bill, each one can be disputed with sufficient points.

There are material nuances to consider in the determination of whether a company should raise capital through debt or equity. In the same vein, the arithmetic on which is cheaper is not so simple. Let us not forget that for many companies of this size, they can raise offshore loans that are significantly cheaper than the exorbitantly priced funds available locally. Companies could also put up a credible argument that so long as they pay their taxes to government it is not their duty to provide gangways to vessels of economic participation. Moreover, a lot of the talk on broadening economic participation often gives the impression that it is mainly about giving retail shareholders access to wider stock portfolio choices.

This is a paradox in an age when deretailization is a secular trend. Finally, while it is not proclaimed there is a risk that foreign companies might

A.P. Møller – Mærsk, the shipping line and terminals operator, could be obliged to list on the NSE

see themselves as the main target of the law. If this is true it sends the wrong signal at a sensitive time.

Companies do rationale things. If it makes solid business sense for them to approach the market, they will not hesitate to do so. Besides, if the so-called cheapness of equity is not undisputed, what are the other gains for companies that are not in dire need of capital when they list their shares? This is where the proponents need to do more homework in building their case.

Then what if the market sentiment is not right at the time a qualifying company crosses the threshold? Assuming that investors are cool toward the

sector for any number of reasons, should executives and their investment bankers not retain the prerogative to decide the most opportune time to sell shares at at a good valuation?

This is not to say that the idea wholly lacks merit. There are a good number of local and foreign companies in Nigeria whose presence on the bourse would enhance risk diversification and boost income for investors. A few local success stories come readily to mind though they may not meet the 40:80 threshold (N40 billion in shareholders’ funds and N80 billion in total assets).

The Sahara Group, South Atlantic Petroleum Limited (SAPETRO), Folawiyo Group,

Arik Air, BUA Group, Tastee Fried Chicken, CHI Farms, Obasanjo Farms, CHISCO Transport, and the Lekki Concession Company to name a few. For the foreign companies they are numerous potential candidates.

In the end, it should not be forgotten that in a bid to achieve a good end the welfare of Nigerians should be foremost. With teams of lawyers, tax consultants, and consultants, big companies that are determined to bypass the law would find innovative ways to restructure their operations so that they will always stay a few inches below the imposed ceiling. This is the time for wider consultation and not populist sentiment. ;

RESHUFFLE

The Godfather Returns

Aerial view of the Civic Centre and the Civic Centre Towers, two iconic prime properties in Jim Ovia’s real estate portfolio

In January 2010, Sanusi Lamido Sanusi, the former governor of the Central Bank of Nigeria, issued a directive that required all bank chief executives that had served for up to 10 years to leave their positions by the end of July that year. Those affected were Jim Ovia at Zenith Bank, Tony Elumelu at United Bank for Africa, and Akinsola Akinfemiwa at Skye Bank. They were barred from returning to the boards of the financial institutions for 3 years.

Four years later, each of these men have reinvented

themselves. Tony Elumelu sits atop HEIRS Holdings that has interests in agriculture, hospitality, power and real estate, Akinsola Akinfemiwa is the chairman of Heritage Bank, and Jim Ovia, has had a good run in every race he has deemed to enter since from philanthropy to telecoms, and real estate.

In a testament to the succession planning at Zenith Bank, the board announced his successor, Godwin Emefiele, the current CBN governor, less than a week after the directive was made public.

Tolu Ogunlesi, a social commentator, describes him as having ‘the knack for living beneath the radar, and eschewing the barefaced capitalist aggression of many of his billionaire colleagues, which ensures that he mostly stays out of controversy.’

This week it was announced that the CBN had approved his nomination as chairman of the bank he founded more than 20 years ago. As chairman, Ovia will not be part of the day-today running of the bank, whose motto is ‘In your best interest’.

Rather, he will be charged with

Source: skyscrapercity.com

Zenith Bank 2013 Results FY 2013 (N Bn) Gross Earnings

335.27

Net interest income

189.26

Operating income

264.47

PBT

110.60

PAT

95.32

EPS

3.01 Source: Nigerian Stock Exchange

setting the tone of its strategic direction at a time of thinning margins and higher costs. Always the biggest individual

shareholder of the bank, Ovia would not be dismayed at the excellent job his protégés have done in his absence.

The new chairman has a strong passion for information and communications technology. He serves as the president of the Nigerian Internet Group. He is also the proprietor of the University of Information and Communication Technology, Agbor, Delta State, where he hails from.

Born on November 4, 1951, Ovia began his professional career in 1980 at IMB, a merchant bank. Seven years later, he had risen to head the bank’s corporate finance department. In 1990, he set out to start Zenith Bank.

He is also the chairman of Quantum Luxury Properties Limited, and a sits on the board of the Africa Finance Corporation. He is a Member of the Order of Federal Republic (MFR), a national honour. He holds a B.Sc. degree in Business Administration from the Southern University, Louisiana (1977), and a master’s degree in Business Administration from the University of Louisiana (1979), both in the United States. He is an alumnus of Harvard Business School’s Owner/President Management (OPM) program. ;

VM | Monday, July 21, 2014 | Issue 002

INTERVIEW

3

DEAL ENGINEER

Wolemi Esan Partner, Power & Infrastructure Practice, Olaniwun Ajayi LP Wolemi Esan is a partner in Olaniwun Ajayi LP’s Power and Infrastructure Practice. He has done extensive work with private companies and public agencies in a variety of situations that cut across his core practice area, and other expert verticals. He has a strong background in financial matters, and is widely acknowledged as a leading authority in derivatives and securitization in the Nigerian securities market.

What is your role at the firm?

Until recently, I was part of the Firm’s Specialized Transactions Practice. Essentially, the practice deals with the most innovative transactions in the market. Its responsibility is to craft bespoke solutions to situations that often have no precedent in market. For instance, on one occasion we had a client who needed financing to develop its upstream petroleum asset. After we considered a number of options, we settled on a forward sale structure, whereby we presold the crude reserves to raise the necessary funds needed to exploit its proven reserves.

Putting together deals of this nature is what our Specialized Transactions Practice is known for.

Then about two years ago, I moved to the Power & Infrastructure Practice, and as the name suggests, the practice focuses on two key sectors of the economy, in which we are privileged to frequently attract the top mandates. Only last year, during the privatization of the Power Holding Company of Nigeria, Olaniwun Ajayi LP advised on 9 out of the 15 privatized assets. We have also been advising on the Azura-Edo Independent Power Project, which is widely regarded as the template for future IPP development projects in these parts.

On the infrastructure side, we are also working with a client on the development of a deep seaport to serve Nigeria’s burgeoning maritime needs as well as a number of other major PPP deals.

What qualities characterise Olaniwun Ajayi?

I would say our bias for technical, intellectually demanding high-end work.

Olaniwun Ajayi’s reputation is not built on the solicitation of vanilla-category briefs.

We push the envelope of the law. We advised on the first Liquefied Natural Gas project, the first utility scale Independent Power Project, the first bond issuance

by International Finance Corporation and so on. We do not see ourselves in the narrow sense of passive dispensers of legal opinion.

Instead, we like to think

of our lawyers as trusted advisors and enablers of transactions, not academics.

We are known to take a commercial, business driven approach to law. If you look at the profiles of our lawyers, you will find that a number of our lawyers have MBAs, and one of our partners is currently pursuing a DBA. We are constantly at work thinking up new ways of solving clients’ problems.

What is OA’s client solving approach?

strong residue of public distrust and resentment over the privatization of common assets. What is your view?

One thing we can all agree on is that the government has no business being in business. That said, it is understandable that when people do not fully appreciate the constraints faced by the government in funding costly, large-scale socially beneficial projects like power and infrastructure all by itself, and the attendant op-

indeed, privatisation, has the potential to deliver benefits at lower costs to taxpayers and customers.

Sector-wise, does the work-mix at the firm evolve with trends in the economy?

As a full service firm, we receive instructions in both contentious, that is, litigious, and non-contentious, that is, advisory, matters from our clients. Naturally, most of our advisory work, being transaction-driven will

Olaniwun Ajayi law firm library

About the Firm D Founded: 1962 0 Number of Partners: 8 B Number of Associates: 65 Education University College, London (UCL) Master of Laws (LLM) Lagos State University Bachelor of Laws (LL.B.), Law

Recent transactions • Advised on the US$3.15 billion financing of Dangote Industries Limited for the development of a 400,000bpd refinery • Advising on the US$1.5 billion financing of the development of a deep seaport in Lagos, Nigeria • Advised on the US$1.2 billion financing of the development of a fertilizer plant in Eleme, Rivers State • Advising on the on-going development of the greenfield AzuraEdo IPP, a c. 459MW open cycle gas-fired plant in Edo State • Advised on the US$500 million financing of an international shipping conglomerate for the expansion of its vessel portfolio

Our bias for technical, intellectually demanding high-end work sets Olaniwun Ajayi apart.

We believe our clients come to us for cutting-edge solutions to intricate legal problems. We also believe that each matter needs a multifaceted approach to find the best solution. Accordingly, whatever the nature of the instruction, we are insistent on a cross-functional, rigorous approach when exploring solutions for our clients.

We discourage silo thinking here. For instance, if a bank-

portunity cost, there is a tendency to leap to wholesale condemnation of privatization. Knowing the magnitude of competing demands faced by state and federal governments, I will say that privatizations, PPPs, and similar arrangements ultimately serve the public good when properly structured. That the government and sponsors do not always do a good job of communicating the ration-

Our clients come to us for cuttingedge solutions to intricate legal problems. ing client has a pending case we will pool resources from our litigation, and banking practices to brainstorm on the matter. Throughout the process we maintain open communications with the client. This helps in developing our case management strategy, which is compiled in a single document for easy reference when needed by new team members.

In spite of the government’s efforts to draw in private sector participation into power and infrastructure there is a

ale of these sales, cannot be an indictment of the ethos of these arrangements. Let us not forget that these same arrangements were the battering rams used to dismantle the inefficient monopolies enjoyed by state-sponsored companies in the past. The choices and convenience they have brought have been a great service. For example, we all remember the bureaucracy Nigerians suffered under NITEL until the GSM licenses were sold. When we take out sentiment, what we find is that, when properly executed, deregulation and

reflect the push-and-pull of economic forces. For example, during the banking consolidation round of 2004-5, we worked with over 60% of the financial institutions.

Again, in 2009, during the Central Bank’s banking sector intervention we worked closely with the regulator to assure financial system stability. As situations arise, we adapt and fit in, whilst retaining our core essence. It is the only way for a firm to remain relevant and indeed thrive.

What recent global M&A transaction would you have liked to work on?

That would have to be the aborted Pfizer-AstraZeneca combination. The sheer scale of the two companies’ global operations, multiple regulatory jurisdictions, and the size of the offer gave it all the tantalizing features of a transformational deal on so many levels. In the end, AstraZeneca shrugged off the suitor’s offers, and Pfizer chose not to launch a hostile take−over for AstraZeneca.

If it had gone on a full offensive, one would have liked to see the creative defensive structures that AstraZeneca’s lawyers would put in place. It would have been the stuff of case-study dreams for years to come. I would have liked to work on this deal advising the sell side. ;

4

MARKET DATA

VM | Monday, July 21, 2014 | Issue 002

MARKET SNAPSHOT 3-MONTH PRICE TREND OF BELLWETHER STOCKS

ACCESS

9.80 0.00

7.22

11.31

PE 6.01

14/07 May

June

DIAMONDBNK 5.86

June

FLOURMILL 63.91

PE 3.20

May

June

FBNH

77.87 0.13

PE 7.71

14/07 June

FO

14/07 May

June

14/07 May

June

FCMB

PE 5.16

14/07 June

GLAXOSMITH 53.06

14/07 May

June

14/07 May

June

FIDELITYBK 1.85

1.94 0.06 3.10

May

June

GUARANTY

PE 7.28

M T W T F

31.80

18/07

PE 9.34

14/07 May

18/07

30.00 0.03

22.67

M T W T F

18/07

M T W T F

14/07

M T W T F

68.99 0.01

9.30 0.20 12.45 PE 10.33

18/07

71.44 PE 22.62

18/07

M T W T F

8.67

M T W T F

4.90

May

DANGSUGAR

18/07

4.26 0.11

3.01

M T W T F

259.94 PE 55.09

18/07

M T W T F

250.02 PE 20.26

18/07

238.00 3.94

27.06

240.05 0.95

185.00

M T W T F

18.93

May

DANGCEM

18/07

15.90 0.33

11.50

M T W T F

14/07 June

14/07

18/07

91.85 PE 26.76

May

98.35 PE 24.50

18/07

6.32 0.08

14/07

74.25 0.00

58.27

M T W T F

8.00

May

CADBURY

MOST GAINED & DECLINED

June

18/07

M T W T F

MOBIL

20.16%

WEMABANK

13.27%

NPFMCRFBK

12.24%

WAPCO

6.23%

MANSARD

5.95%

FIDSON

5.33%

TOTAL

5.23%

PAINTCOM

5.00%

PZ

4.76%

WAPIC

4.65%

OANDO

-10.68%

COSTAIN

-8.03%

RTBRISCOE

-7.89%

JBERGER

-7.42%

NIGERINS

-7.41%

NASCON

-5.96%

CONOIL

-5.00%

UPDCREIT

-4.97%

DNMEYER

-4.76%

TRIPPLEG

-4.57%

INDEX DAILY MOVEMENT

NSEASI GUINNESS

198.02 6.98

162.00

266.70 PE 24.96

INTBREW

29.50 0.00

18.00

31.00 PE 32.80

JBERGER

63.00 5.05

59.18

76.45 PE 10.31

MANSARD

2.67 0.15

1.95

2.73

PE 14.05

Fr 14/07 May

June

NASCON

18/07

10.72 0.68

10.20

14/07

M T W T F

15.10 PE 10.51

May

June

NB

18/07

175.61 1.18

140.00

14/07

M T W T F

189.00 PE 30.38

May

June

NESTLE 916.00

14/07

18/07

M T W T F

May

1125.00 15.00

OANDO

1250.00 PE 40.06

June

18/07

M T W T F

25.00 2.99

9.32

36.89

PE 5.45

42,891.82

43.10 43.00 42.90 42.80 42.70 Mo

Tu

NSECNSMRGDS

We

1,059.78

Mo

Tu

We

NSEOILGAS 14/07 June

PZ

18/07

38.50 1.75

30.08

47.06 PE 31.36

14/07 May

June

TOTAL

14/07 June

UBN

SKYEBANK

4.90

June

TRANSCORP 1.17

June

UNILEVER

PE 48.56

STANBIC

27.50 PE 14.66

14/07 May

June

UACN 53.23

14/07 June

WAPCO

STERLNBANK 2.09

18/07

M T W T F

Fr

469.09

Fr

Mo

Tu

We

NSEBNK

Th

Fr

438.71

0.445 0.443 0.441 0.439 0.437 Fr

Mo

Tu

We

Th

Fr

LEGEND

UBA

8.06 0.21

6.65

9.58

18/07

136.73 PE 12.63

PE 4.58

Th

0.485 0.480 0.475 0.470 0.465

2.38 0.07

14/07 June

18/07

M T W T F

2.92

May

PE 5.37

14/07

M T W T F

119.01 6.98

87.50

June

18/07

71.20 PE 21.32

May

14/07 May

M T W T F

62.12 0.53

18/07

65.00 PE 41.55

18/07

M T W T F

27.26 0.21

15.39

M T W T F

52.77 1.27

43.32

June

18/07

5.91 0.11

14/07 May

14/07 May

M T W T F

5.95

18/07

12.80 PE 20.45

PE 2.81

14/07 May

18/07

M T W T F

3.40 0.13

3.19

M T W T F

9.23 0.42

8.10

June

18/07

188.58 PE 11.46

May

May

M T W T F

180.00 8.95

146.26

14/07

M T W T F

Fr

10.61 10.57 10.53 10.49 10.45 Fr

May

Th

May

June

ZENITHBANK 19.23

18/07

M T W T F

25.22 0.21 27.40

PE 8.72

1. 52-week low price 2. Year Low Price 3. Current price 4. Year High Price 5. 52-week high price 6. Current price 7. 5-Day Price Change 8. PE Ratio 9. Daily Prive Movement over 3 months.

10. 30-Day Moving Average 11. Daily Price Movement over Last Week 2 TICKER

9.80 0.05

4

7.22

11.79

1

3

5

PE 6.24

6

7 8

9 10 14/07 May

June

18/07

M T W T F

14/07 May

June

18/07

M T W T F

14/07 May

June

18/07

M T W T F

14/07 May

June

18/07

M T W T F

11 16/06

April

May

20/06

June M T W T F

MARKET DATA

VM | Monday, July 21, 2014 | Issue 002

5

MARKET SNAPSHOT DATA VIZUALIZATION

DATA PARTNER

www.customsstreet.com

www.afrinvest.com

MARKET SNAPSHOT Date

Deals

Turnover Volume

Turnover Value

Traded Stocks

Advanced Stocks

Declined Stocks

Unchanged Stocks

All Shares Index Value

1

14.07.2014

5,502

468,559,126

6,200,244,950.37

125 \ 132

27 \ 23

29 \ 30

69 \ 79

42,930.60

2

15.07.2014

5,692

251,758,465

3,003,431,717.63

114 \ 117

33 \ 27

27 \ 32

54 \ 58

42,971.56

Sector

%

3

16.07.2014

5,098

317,158,558

3,060,821,383.87

120 \ 122

22 \ 29

26 \ 18

72 \ 75

43,030.27

Financial Services

73 \ 72

4

17.07.2014

4,904

365,252,261

4,432,207,242.48

114 \ 124

27 \ 28

25 \ 20

62 \ 76

42,918.52

Conglomerates

8 \ 13

5

18.07.2014

4,778

374,304,901

3,207,141,742.24

117 \ 122

34 \ 24

21 \ 31

62 \ 67

42,891.82

Oil & Gas

8\6

Others

11 \ 9

TRADING BREAKDOWN BY SECTOR

The \ arrow signifies week-on-week change in value. This week’s value is shown on the left of the \ sign, and last week’s value on the right.

INDEX PERFORMANCE

FGN Bond Index

Date

Week Opening

Week Close

Change

WtD

MtD

QtD

YtD

1

All Shares Index

42,832.82

42,891.82

59

0.14

0.96

0.96

3.78

2

NSE 30 Index

1,945.69

1,948.74

3.05

0.16

0.88

0.88

2.18

3

NSE Banking Index

438.08

438.71

0.63

0.14

1.35

1.35

-2.04

4

NSE Insurance Index

148.19

150.41

2.22

1.5

2.44

2.44

-1.61

5

NSE Consumer Goods Index

1,053.69

1,059.78

6.09

0.58

0.15

0.15

-3.68

6

NSE Oil/Gas Index

477.63

469.09

-8.54

-1.79

0.18

0.18

38.02

7

NSE Lotus Islamic Index

2,836.03

2,853.38

17.35

0.61

-0.74

-0.74

-0.34

8

NSE Industrial Index

2,705.31

2,767.11

61.8

2.28

3.76

3.76

8.66

+150% SLIPPING +140%

2840

12.4

2835

12.2

2830

12.0

2825

11.8

2820 14/07

LEADING

12

+130% +120%

The relative size of each individual stock’s bubble chart is determined by its market capitalization.

For indices, the relative size of each bubble chart is the total value of the capitalization modified values of each constituent stock.

Pink bubbles represent individual stocks, and grey bubbles represent indexes.

+110% +100%

YEAR-TO-DATE RETURN

+90% +80% +70% +60%

27

+50% +40%

29

31

13

+30%

10

+20% +10%

4 42 2 23 9 48 28 114 45 36 46 4 39 6 333 44 21 3 16 111 20 43 177 5 24 8 38 22 37 32 40 41

15

0%

26

35

-10%

18

-20% -30% -40% LAGGING -15%

-10%

25

1

-5%

0%

199

30 47

7

34

+5% WEEK-TO-DATE RETURN

+10%

+15%

IMPROVING +25%

+20%

CURRENCY CROSS RATES Currency United codes/ Kingdom names Pound

Euro

Japanese Yen

Swiss Franc

Chinese CFA Franc CFA Franc Ghanaian US Dollar Yuan BCEAO BEAC New Cedi Renminbi

Hong Kong Dollar

Nigerian Naira

Saudi Riyal

Market Value YTD Return

South Utd. Arab African US Dollar Emir.

Rand Dirham

16/06

11.6 18/07

# TICKER

WTD

1 DANGCEM

-3.60 10.05

YTD

2 NB

0.54

3 GUARANTY

1.25 10.92

3.89

4 NESTLE

1.84

5 ZENITHBANK

-0.36 -8.72

-7.50

6 FBNH

2.72

-0.43

7 WAPCO

0.93

-2.58

8 GUINNESS

5.55 -13.14

9 ETI

-0.58

10 STANBIC

1.20 26.70

6.30

11 UBA

-0.63 -11.80

12 FO

16.98 139.40

13 OANDO

-1.79 15.42

14 TRANSCORP

10.69 33.33

15 ACCESS

0.93

16 UNILEVER

-6.36 -4.28

2.08

17 FLOURMILL

0.00 -10.34

18 UBN

0.52

0.21

19 PZ

0.55

2.84

20 CADBURY

-0.34 -9.80

21 UACN

-6.68 -8.08

22 DANGSUGAR

-2.15 -22.22

23 INTBREW

0.34

24 DIAMONDBNK

-2.50 -15.10

2.79

25 JBERGER

-1.38

26 FCMB

-4.82 12.47

27 ASHAKACEM

12.24 55.07

28 GLAXOSMITH

1.47

29 7UP

0.00 43.60

30 TOTAL

-0.04

31 FIDELITYBK

0.00 -25.65

3.55

1.47 0.62

32 STERLNBANK

0.43

33 MOBIL

-0.04 13.83

-7.60

GBP

1

0.7902

0.005756

0.6506

0.5841

0.001205 0.001205

0.09476

0.172

0.07537

0.00364

0.1558

0.05466

0.5841

0.1591

34 CONOIL

0.31

EUR

1.2657

1

0.007285

0.8234

0.7393

0.001524 0.001524

0.1199

0.2177

0.09539

0.004607

0.1971

0.06918

0.7393

0.2013

35 SKYEBANK

-2.10 -25.68

JPY

173.751

137.29

1

113.038

101.488

16.4637

29.8845

13.094

0.6325

27.0635

9.4965

101.488

27.6361

36 PRESCO

2.87

37 OKOMUOIL

0.00 -25.00

0.2093

0.2093

CHF

1.5373

1.2147

0.008848

1

0.8979

0.001852 0.001852

0.1457

0.2644

0.1159

0.005596

0.2395

0.08402

0.8979

0.2445

USD

1.7121

1.3528

0.009855

1.1139

1

0.002062 0.002062

0.1622

0.2945

0.129

0.006232

0.2667

0.09357

1

0.2723

XOF

830.196

655.957

4.7785

540.106

484.897

1

1

78.6616

142.785

62.5618

3.0219

129.306

45.3732

484.897

132.042

XAF

830.196

655.957

4.7785

540.106

484.897

1

1

78.6616

142.785

62.5618

3.0219

129.306

45.3732

484.897

132.042

CNY

10.5627

8.3461

0.0608

6.8718

6.1694

0.01272

0.01272

1

1.8167

0.796

0.03845

1.6452

0.5773

6.1694

1.68

GHS

5.8899

4.6539

0.0339

3.8319

3.4402

0.007095 0.007095

0.5581

1

0.4439

0.02144

0.9174

0.3219

3.4402

0.9368

HKD

13.2706

10.4866

0.07638

8.6336

7.751

0.01598

0.01598

1.2574

2.2824

1

0.0483

2.067

0.7253

7.751

2.1107

NGN

280.072

221.298

1.612

182.208

163.583

0.3374

0.3374

26.537

48.1694

21.1056

1

43.6223

15.3069

163.583

44.5453

-3.43 -1.14

38 CAP

1.30 -19.50

39 NEIMETH

-8.33 -3.97

40 MAYBAKER

5.99 -27.76

All Shares 41 Index

-0.46

3.64

0.03

2.02

42 NSE 30 Index

SAR

6.4218

5.0742

0.03696

4.1779

3.7508

0.007735 0.007735

0.6085

1.1045

0.4839

0.02338

1

0.351

3.7508

1.0214

NSE Lotus Islamic Index NSE Industrial 44 Index NSE Consumer 45 Goods Index

0.73

-4.23

ZAR

18.3123

14.4713

0.1054

11.9136

10.6958

0.02206

1.7351

3.1495

1.38

0.06666

2.8522

1

10.6958

2.9126

46 NSE Banking Index 0.17

-2.18

NSE Oil/Gas 47 Index NSE Insurance 48 Index

0.02206

USD

1.7121

1.3528

0.009855

1.1139

1

0.002062 0.002062

0.1622

0.2945

0.129

0.006232

0.2667

0.09357

1

0.2723

AED

6.2899

4.97

0.0362

4.0921

3.6738

0.007576 0.007576

0.596

1.0818

0.474

0.0229

0.9797

0.3438

3.6738

1

43

-0.74 -0.95 -0.69

6.23

4.99

40.53

-0.55 -3.06

6

COMMENTARIAT

VM | Monday, July 21, 2014 | Issue 002

RESEARCH

Earnings Weatherman

UBA Capital has published a helpful calendar of dates when companies released their results in 2013. It should serve as a guide for when they are likely to announce their results. Analysts at the firm also wrote that they expect ‘some quite impressive results from some of our preferred stocks.’

Satchets of Omo, a Unilever product, sold in a street corner stall

It is report card time. Any time now companies are due to start releasing their half-year results. If the latest results from Unilever, the consumer goods company, are anything to go by, then investors should prepare themselves for a bloody earnings season.

UNILEVER NIGERIA PLC 30-Jun-14

30-Jun-13

Change

Companies

H1 2013 Results Publication Date

Current UBA Capital Target Price

Current UBA Capital Rating

Access Bank

Aug-21

12.3

BUY

Dangote Cement

Jul-16

255.0

BUY

Diamond Bank

Jul-31

9.5

BUY

FBN Holdings

Aug-27

16.6

BUY

Fidelity Bank

Jul-26

4.6

BUY

Forte Oil

Jul-26

Guaranty Bank

Aug-20

Mobil Nigeria

Jul-30

MRS

Aug-15

Oando

Aug-16

Skye Bank

Jul-24

Stanbic Bank

Jul-30

Sterling Bank

Jul-18

UBA

Jul-29

Union Bank

Jul-31

WAPCO

Jul-29

120.0

BUY

Zenith Bank

Aug-15

28.0

BUY

Analysts at Afrinvest have a fair quantity of BUY recommendations too.

Sector

Company

Afrinvest 12-Month Target Price

Rating

N

N

Access Bank

11.8

ACCUMULATE

Revenue

29,280,133,000

29,667,942,000

-1%

Diamond Bank

11.19

BUY

Cost of Sales

(18,280,715,000)

(18,812,681,000)

-3%

ETI

19.4

ACCUMULATE

Distribution/ Admin and Other Expenses

(8,315,277,000)

(6,514,759,000)

28%

FBN Holdings

22.17

BUY

Other Income

6,189,000

1,322,000

368%

Skye Bank

5.95

BUY

Financial Charges

(677,846,000)

-496,625,000

36%

Sterling Bank

3.02

BUY

Financial Income

64,851,000

117,676,000

-45%

UBA

10.41

BUY

Profit Before Tax

2,077,335,000

3,962,875,000

-48%

Zenith Bank

28.88

ACCUMULATE

Taxation

(612,762,000)

(1,222,025,000)

-50%

Dangote Sugar

11.97

BUY

Profit After Tax

1,464,573,000

2,740,850,000

-47%

Flour Mills of Nigeria

96.20

ACCUMULATE

AIICO

1.70

BUY

Mansard

3.29

BUY

Continental Reinsurance

1.48

BUY

Custodian and Allied Insurance PLC

4.37

ACCUMULATE

Total

267.69

BUY

In reality, pleasant earnings surprises could turn out to be the exception. Most investors expect most companies to put up a least-evil performance.

The question now is whether the dampened half year results will signify an isolated blip on the screen or mark a tempering of business performance till after the 2015

elections. Two events, both outside the control of executives, constitute flies in their ointment. Political concerns about the forthcoming elections, and the growing threat of Boko Haram attacks in the southern part of the country.

According to DaMina Advisors, the private sector is ‘already reeling from high

operating costs due to erratic electricity supplies, and the unbudgeted costs of new security infrastructure for major airlines, telecom companies, banks, gas stations, commercial buildings and other manufacturing industries, will erode the profitability of the many stressed companies.’

Conglomerates

Banking

Consumer Goods

Insurance

Oil & Gas

At Renaissance Capital, analysts are bullish on the banking sector. All nine financial institutions under its coverage - Access Bank, Diamond Bank, Fidelity Bank, First City Monument Bank, First Bank, GT Bank, Skye Bank, Stanbic IBTC, and Zenith Bank – have BUY recommendations. Skye Bank has the highest price upswing potential at more than 100%.

Analyst Coverage The National Association of Securities Dealers (NASD) announced this week that it will provide an Equity Analyst section on its website where research reports on Over the Counter (OTC) securities will be available. This is a welcome step.

It is expected that the NASD will be able to attract reputable analysts, and not pumpand-dump artists, to cover its companies.

The NSE has had a similar relationship with Thaddeus Investment Research & Advisors to provide coverage for

less visible companies not covered by sell-side analysts at bulge bracket firms.

At the start of the year, Bola Ajomale, chief executive of NASD, disclosed that it was targeting over 230 companies to be traded on its platform.

International Coverage In its July recommendation list, Imara African Securities places BUY recommenTranscorp chairman, Tony Elemelu (second from left) rings the bell at the NSE, while Obinna Ufudo, CEO, (first from left) and NSE officials applaud

It is not often that seasoned analysts use gushing adjectives to describe companies. But that is just what the analysts at Cardinal-

Stone Partners have done.

They describe Transcorp’s investment case as ‘very compelling as it presents an excellent opportunity into

Nigeria’s emerging utilities sector.’ They rate the stock a BUY with a 2014 target price of N6.62.

dations on all four securities included: Access Bank, Dangote Sugar Refinery,

Lafarge Cement WAPCO, and UAC.

Rocket Launcher Rocket Internet plans an initial public offering in Frankfurt in the third quarter. The company behind JUMIA, the

online retail store, is expected to be valued at between €3bn and €5 billion. Founded by Oliver, Alexander and Marc Samwer,

three German brothers, Rocket Internet aims to become the biggest consumer internet group outside the US and China.

VM | Monday, July 21, 2014 | Issue 002

COMMENTARIAT

7

CORPORATES

New Listing Notore Chemical Industries, a nitrogenous fertilizer producer, plans to list its shares on the Nigerian Stock Exchange. According to sources, the company has already approached the NSE with a formal request. Notore is the only producer of urea fertilizer in sub-Saharan Africa.

In November 2007, Emerging Capital Partners, a private equity firm, took a stake in

BDC Capital Raising the company. The listing may be an avenue for it to sell down its stake. Other companies in ECP’s portfolio include Continental Reinsurance and Oando.

During the week, Continental Reinsurance Plc informed the NSE of a possible divestment by ECP Africa Fund II PCC and its partners (the ECP Fund II Consortium) of their interests in the company. ECP invested in the company in February 2007.

Helios Bond Issuance On July 8, Helios Towers Nigeria (HTN) priced a US$250m 5NC3 RegS senior unsecured high yield bond.

Bank of America Merrill Lynch acted as sole bookrunner, lead manager and ratings advisor. HTN is a leading telecoms towers operator in Nigeria with approximately 1,200 towers across 34 out of 36 Nigerian states The company plans to use proceeds for the offering to refinance the existing, expensive senior and subordinated indebtedness, as well as extend the company’s debt maturity profile, optimize its

capital structure and establish a liquid benchmark for the company’s future debt raisings.

The bond sale is historic in a number of ways. It is the first time that a non-commodity Sub-Saharan Africa corporate issuer and first Sub-Saharan Africa telco outside South Africa will be selling bonds, and the lowest ever coupon for an inaugural Nigerian corporate issuance at 8.375%.

The final allotment by region shows the spread of appetite for Nigeria-exposed companies in attractive sectors.

Helios Bond Issue Final Allocation

United Kingdom, 71% Europe, 16% South Africa, 8% Asia, 4% Middle East & North Africa, 4%

Source: Bank of America Merrill Lynch

Oando Wins the Medal Oando Energy Resources Inc. (OER), a Toronto-listed E&P company, has completed the acquisition of Medal Oil Company Limited. OER issued 3,491,082 units of one common share and one-half of one war-

rant for each Medal Oil share.

The total consideration was $5 million. Medal Oil holds a 5% interest in OML 131, a deepwater license covering 297,600 acres. ConocoPhillips owns the remaining interest in the block.

Two hundred bureau-dechange have successfully raised their capital to N35 million in compliance with the new guidelines issued by the Central Bank of Nigeria.

This was disclosed by Godwin Emefiele, the governor of the Central Bank of Nigeria, during at a hearing before the House of Representatives Committee on Banking and Finance.

In recent weeks, BDC operators under the aegis of the Association of Bureau De Change of Nigeria have embarked on a public awareness campaign and legislative lobbying to persuade the apex bank to rescind its decision.

BDCs have until July 31 to meet the new capital requirement.

The CBN governor decried abuses among BDC operators

Board Changes

Asue Ighodalo, chairman, Sterling Bank

Sterling Bank has notified the NSE of the resignation of three of its directors. They are Alhaji (Dr.) S.A. Adegunwa, who until his retirement served as chairman, Alhaji Bashir Borodo, OON, and Mr. Yemi Idowu. Mr. Asue

Ighodalo becomes the new chairman. He is the co-founder of Banwo and Ighodalo, a respected City law firm that enjoys long standing relationships with some of Nigeria’s biggest companies. He sits on the boards of the Nigerian Economic Summit Group, Dangote Flour Mills Plc, Christopher Kolade Foundation, FATE Foundation, Main Street Technologies Limited (sponsor of MainOne Cable Company), Union Bank (UK) Plc and Nigeria Leadership Initiative (NLI). Ighodalo is a veteran deal adviser and it would be interesting to see him put his rich experience to work at the One Customer Bank.

The appointment was made at the bank’s board meeting held on July 8, 2014.

Uniform Mortgage Underwriting Standards The importance of uniform mortgage underwriting stan­ dards across the different states’ jurisdictions has been emphasized by Sonnie Ayere, chief executive of the Nigerian Mortgage Refi­ nance Com­pany. He was speaking at a two-day workshop with the theme ‘Uniform Underwriting Standards for

Mortgage Loans’. Four states, Kogi, Abia, Enugu, and Akwa Ibom, have expressed their interest to participate in the standardization of terms for access to mortgages. NMRC is a secondary mortgage financing institution. The company was launched by President Goodluck Jonathan in January 2014.

Mortgage loans as % of GDP

FCMB’s Consumer Lending Muscle FCMB Group plans to raise up to $300 million of funding this year to boost consumer lending by about 20 per cent to N540 billion.

Ladi Balogun, the chief executive officer, expressed a strong bias for tapping ‘the loan markets as opposed to bond markets due to more stable pricing.’

Ladi Balogun, Group CEO, FCMB Group

REGULATORY

Waiting on Mr. Emefiele Godwin Emefiele, the Central Bank of Nigeria governor, is slowly learning the importance of Centralbankese, a unique language spoken by central bankers around the world. It is noted for its ability to obfuscate listeners, being non-committal, and never revealing what the speaker plans to do. Alan Greenspan once said that ‘if I seem unduly clear to you, you must have misunderstood what I said.’

Emefiele has got off on the wrong foot. Shortly after he resumed office, he called a big press conference to say exactly what he plans to do.

Thankfully, he has kept markets guessing about exactly how he plans to achieve those goals: lower interest rates, a stable exchange rate, and free capital flow.

Next week, he chairs his first monetary policy committee meeting (MPC).

Analysts do not expect that he will cut rates anytime soon.

Alan Cameron, a Londonbased economist at CSL, who was polled by Reuters explained that ‘we do not see any chance of rates being cut at July’s MPC, much less as inflation continues to creep up ahead of elections.’

2014 Inter-Bank Call Rate

April

May

June

10.50

10.63

10.63

UK, 81%

Minimum Rediscount Rate (MRR)

USA, 73%

Monetary Policy Rate (MPR)

12.00

12.00

12.00

Treasury Bill Rate

11.26

10.13

9.98

Savings Deposit Rate

3.42

3.41

3.42

Russia, 2.7%

1 Month Deposit Rate

8.19

8.27

8.46

Nigeria, 0.55%

3 Months Deposit Rate

9.38

9.42

9.30

6 Months Deposit Rate

10.07

9.76

9.52

12 Months Deposit Rate

9.69

9.29

9.19

Prime Lending rate

16.70

16.50

16.50

Maximum Lending Rate

25.63

25.76

26.07

India, 5.8% Brazil, 5.5%

Facility OML 131 deepwater oil block

African Institute for Financial and Economic Management (WAIFEM) has advised the regulator to tread with caution because the N35 million figure is high, and the time window too short.

These could have unplanned consequences on the stable supply of forex to businesses and individuals that need to purchase currencies for legitimate uses.

Money Market Indicators (In Percentage)

South Africa, 32%

ConocoPhillips Acreage

whose businesses had become ‘characterised by rentseeking, weak operational structure, financing of illicit transactions, gradual dollarisation of the economy and multiple ownership of BDC licences.’

He explained that a regulatory overhaul is overdue to stem these abuses.

Professor Akpan Ekpo, director-general of the West

Source: Dunn Loren Merrifield

Source: Central Bank of Nigeria

8

ARENA

VM | Monday, July 21, 2014 | Issue 002

ART AS AN ALTERNATIVE INVESTMENT

A Short Guide to Collecting Art

Oliver Enwonwu is the director of leading Lagos gallery, Omenka and president of the Society of Nigerian Artists. oliver@omenkamagazine.com

Last week, on Art as an Alternative Investment, we took a look at the top ten sales of Nigerian art. The 2014 edition of Africa Now, organized

by Bonhams, an international auction house, featured 120 lots from established names

including Ben Enwonwu, Yusuf Grillo, El Anatsui, and Bruce Onobrakpeya. The most valuable sale was a 1976 oil painting Princes of Mali by Ben Enwonwu at £92,500.

As new records are set for Nigerian and African art on the international market, it is imperative to examine the indices that determine the value of an artwork; authenticity, quality, rarity, condition, provenance and value. These factors must be considered all at once in order to make an informed decision when purchasing a work, They may be broadly categorized into three.

Economic The laws of supply and demand are generally applicable to the sales of art. Rarity tends to enhance value. Works by prolific artists tend to be less valued than those of artists

Ben Enwonwu’s Seven wooden sculptures commissioned by the Daily Mirror in 1960.

Sold for £361,250 incl. premium

who produced less. Likewise, works by deceased artists are generally more sought after.

The rarity of a given work is also determined by how many similar examples exist. For example, a painting is usually worth more than a print or a lithograph while a surplus of artworks by a particular artist tends to cause a reduction in market price. However, if collectors suddenly become active as a result of a change in perceptions or their material circumstances, the market price tends to rise. Therefore, the value of art fluctuates depending on how keen collectors are and how much they are willing to pay for a piece.

Work The quality of a given work, its aesthetic merits, its significance within a larger context of artistic history and within

the specific context of an artist’s oeuvre, contribute to its overall value.

The period in which a work was created is another factor in determining its price. Appraisers generally value works completed early in an artist’s career higher than those completed later, as early works tend to be more unpredictable, daring and passionate, owing to the artist’s desire to establish a strong reputation.

Works of art that typify an artist’s aesthetic are also appraised higher than those uncharacteristic of his oeuvre.

Enwonwu’s most expensive work sold to date, the Daily Mirror figures are fine examples of his aesthetic and are representative of his wellknown elongated, lithe forms, as well as geometric shapes borrowed from classical African sculpture.

Other factors include the size of a work and medium of execution. Generally, larger works of art are valued higher because of the degree of difficulty involved.

Sculptures in wood, bronze, metal or stone are also considered more valuable than paintings. Traditional paint media like oil is valued higher than acrylic and watercolor, which in turn are usually worth more than prints or lithographs.

The condition and the provenance of an artwork impact a given work’s value.

For example, a painting that is ripped, water-damaged, discoloured, or extensively repaired may be significantly reduced in value. Works of art formerly owned by famous people usually command high prices, while established provenance like certificates of sale, exhibition and publication history help resolve questions

of authenticity, art-historical importance and enhance value.

Artist Artists who are well-known and enjoy a rich history of collection mostly command more value than artists who are unknown. Several reasons can be adduced; education, years of practice, recognition including prizes and awards, professional affiliations, publications, and exhibitions in significant galleries and museums.

In conclusion, collections formed with passion and intelligence stand the test of time, both aesthetically and monetarily. In building a collection that has huge investment potential, one must keep in mind its high liquidity factor, or marketability − the relative ease to sell all or part of the collection quickly and thus convert its value into cash. ;

HIGH TABLE

The Raw Deal

Ify Oji is a lawyer, writer and food lover. She is the creator of the GidiTang.com (synonym: Lagos Flavour) blog on food and drink in Lagos. teamlogiclimited@gmail.com

Raw meat is not for everyone. Since the invention of fire

by Paleolithic man, many find the consumption of unprepared meat unconscionable. Boiled, fried, grilled, steamed, and just about any other heat applications is preferred to raw meat.

But do we go too far in the preparation of meat draining out all its soul in the process?

In Nigeria, our obsession to attain a parasite destruction guarantee by boiling beef and chicken to its ‘second death’

is common. Meat is left too long in a boiling pot, which extricates all the nutrients, and flavour in it. Not satisfied, most cooks go further to certify the meat officially dead by incubating it in a brothy soup or stew. Then they rely almost completely on its stock to breathe new life into it.

However through the course of history and spanning different parts of the world, raw delicacies have emerged for numerous reasons; practical or otherwise.

An example dates back to 1950 in Venice, where an ailing aristocratic lady went to dine at the famous Harry’s Bar. When Giuseppe Cipriani, the owner, was informed that his guest was on strict medical instructions to have only uncooked meat, he went ahead to shave thin slices of raw beef, which he served it with mustard sauce. He named it Carpaccio because the dish resembled the red hues and tones of the painter Vittore Carpaccio whose works were being exhibited in Venice at the time.

Closer to home in Africa are the Ethiopians, swear by kitfo, an African steak

Published by

tartare, served with local Ethiopian spices and cheeses, and tere sega, a ceremonial dished served at weddings.

Anthropologists suggest that due to the numerous wars in the Abyssinian region, soldiers ate their meat raw as a protective measure. Had meat been cooked in war time the smoke and smell would alert their enemies.

There are several examples of raw food consumption from around the world. Ceviche (seafood ‘cooked’ in the citric acid of lime), crudo, an Italian version of ceviche, steak tartare, and of course, sushi, perhaps the most famous of raw diets.

Originally from Japan, the combination of rice and raw fish (sushi) was borne out of necessity. The vinegary rice was initially used as a pickling agent for the fish. Sushi as we know it ‘today evolved as a freshwater delicacy during the Edo dynasty (1603 - 1868).

In Nigeria, Bungalows Restaurant, which has a mouthwatering 20-page menu, including sushi offers an authentic izakaya (Japanese pub) experience.

EDITOR: MIDENO BAYAGBON GROUP BUSINESS EDITOR: OMOH GABRIEL

In Association With

CONTENT DIRECTION: OBIORA TABANSI ONYEASO DESIGN & ILLUSTRATION: PUBLICAN MEDIA

Salmon nigiri dish

I ordered the Salmon nigiri, my sushi of choice in Lagos.

The chef did not disappoint.

I would also recommend the sushi at Fusion Restaurant and the Avenue Suites. Although it has been a while, the greyish tint of the last salmon nigiri I ordered once at Bonzai on Akin Adesola Street in Victoria Island leaves me scared to recommend it. The slightest perception of contamination with raw food is enough to make an unsold diner run for the hills, especially in Naija!

But my top pick for sushi would have to be Izanagi. Since it opened in June 2012, it has

built a reputation for giving VIP service to its regulars.

For the faint hearted diner, a salmon roll is probably a good entrance dish to the world of raw sushi. It is an easy entrée especially if you have had smoked salmon since the texture is similar. A note of caution though.

The taste is markedly different.

The combination of the sweet vinegary rice with the silky delicious fish is a taste once acquired can be highly addictive.

So order up and welcome the advent of Japanese restaurants in Lagos. The cleaner, healthier Lagosian palate is here to stay. ;

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Avenue Suites 1390 Tiamiyu Savage Street, Victoria Island Bungalows Restaurant 1296 Akin Adesola Street, Victoria Island, Lagos Fusion Restaurant 1C, Ozumba Mbadiwe Street, Victoria Island, Lagos Izanagi Japanese Cuisine 19B Idejo Street, Victoria Island, Lagos

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