Vanguard Markets, October 13, 2014 edition

Vanguard Markets | Monday, October 13, 2014 | Issue 014

SPOTLIGHT

Online shopping mall king ! page VM6 Sim Shagaya, founder, Konga

PETROLEUM MARKETING

Femi Otedola, the new don of downstream

Inside Sogal Art Auction’s launch is an indicator of confidence in Nigeria’s secondary art market.

! Page VM6

Market whispers are in overdrive that Femi Otedola-controlled Forte Oil may emerge the winner of Oando’s downstream business, which is being shopped. If these turn out to be true it would place the billionaire businessman, written off only a few years ago as a faded fluke, at the pinnacle of refined products distribution with an unprecedented market dominance in Africa’s largest economy.

2014 Deal of the Year?

HERE ARE BARELY eight weeks to go to the end of the year.

This probably explains the race against time to seal deals before Christmas. Companies want to share good news of closed transactions and booked income with investors in their year-end reports. On the advisor side, bonus-dependent M&A bankers and fee-reliant lawyers are excited to be working on what will in all likelihood rank as the most important deal of the year (DOTY) if consummated.

This deal is none other than the acquisition of the downstream operations of Oando by Forte Oil, a company controlled by Femi Otedola, CON, the billionaire businessman. Until it released a denial, Aiteo, a company owned by press-shy Benedict Peters, was rumoured to be bidding too.

T

The other DOTY contenders If not in value, which unverified sources peg in the region of $350 million, a Forte Oil – Oando deal would change the competitive DNA of the downstream petroleum sector. Its significance in terms of altering the dynamics of a single industry would be more impactful than the six major runners-up for 2014 Deal of the Year.

It’s a family affair. Femi Otedola, chairman of Forte Oil, relaxes with his daughter, Florence, aka DJ Cuppy, on his 80 ft. yacht, Nana, named after his wife

! Page VM2

FOREX RATES

$/N

164.289

166.3 165.6 164.9 164.2 163.5 Fr

Mo

Tu

£/N

We

Th

Fr

265.615

265.8 265.1 264.4 263.7 263.0 Fr

Mo

Tu

Euro/N

We

Th

Fr

209.135

209.8 209.1 208.4 207.7 207.0 Fr

Mo

Tu

CNY/N

We

Th

Fr

26.806

27.2 26.9 26.6 26.3 26.0 Fr

Mo

Tu

We

Th

Currency

Central Rate

SWISS FRANC

172.637

YEN

1.5224

CFA

0.3194

WAUA

229.4455

RIYAL

43.7995

DANISH KRONE

28.0973

SDR

230.2668

Fr

FIXED INCOME & FOREX

Source: FMDQ

VM2

BUSINESS

VM | Monday, October 13, 2014 | Issue 014

PETROLEUM MARKETING

Femi Otedola, the new don of downstream W Continued from Page VM1 These are the $503 million that Qatar National Bank spent on gobbling Ecobank Transnational Inc. shares, the $493 million that Nedbank of South Africa doled out to raise its stake in the same pan-African financial institution, the creation of Lafarge Africa through the combination of Lafarge Wapco, its Nigerian operations and the company’s South African business in a deal estimated to be worth $1.35 billion, the purchase of OML 24 by Pan Ocean from Shell Nigeria, the successful bid for Shell’s OML 29 by the Aiteo/Taleveras consortium for the widely bandied possibly inflated figure of $2.58 billion, and the deal that will win the record for longest gestation period to completion, Oando Energy Resources’ acquisition of ConocoPhillips’ Nigerian assets for $1.5 billion. Distant contenders would be Skye Bank’s acquisition of Mainstreet Bank for an amount in the range of N120 billion, and Heritage Bank’s takeover of Enterprise Bank for N56 billion.

Beautiful bride of downstream Oando’s Downstream Division is one of the jewels in the crown that looks set for the pawn shop to pay down the shuddering debt load its parent company took on to finance the purchase of ConocoPhillips’ assets in Nigeria.

Grapevine News Network (GNN) Since an announcement was made by Forte Oil close to a month ago the market has been abuzz about the formidable pricing leverage it would endow it with over buyers, as well as the bargaining power vis-à-vis suppliers it would confer on Femi Otedola, its non-executive chairman and biggest shareholder. The company’s 2013 annual report lists his direct and indirect shareholding in the company at 615,201,955 shares or 57 per cent of total shares outstanding.

At this stage, it is not known if Forte Oil’s move is for the entire chain of Oando subsidiaries operating in the downstream sector, that is, Oando Marketing, Oando Supply & Trading, and Oando Terminals, or if it covers Oando Marketing only. It is probable that the sale would involve only Oando Marketing because its FY 2013 and H1 2014 investor presentation lists the divestment of up to 49 per cent of the subsidiary or potential listing as its target before the end of the year. It is also unclear if the sale would cover those assets outside Nigeria since Oando has significant operations in the sub-region.

A terse statement from Forte Oil released to the Nigerian Stock Exchange gave little away. It read that ‘Forte Oil Plc has begun initial discussions with a downstream company with the intention to acquire the assets of the

To me, it is funny when people say I was down. It is like when a child is trying to walk, the child must fall down, but it doesn’t mean that the child will never walk again. There is no successful businessman today that has not gone through the ups and downs. That is what prepares you for a future of success

said company.’ A standard caveat that ‘the proposed transaction is still in its infancy’ was included to tick all boxes.

On its part, Oando has kept sealed lips.

– Femi Otedola, recent newspaper interview

FORTE OIL 2013 BUSINESS SEGMENTS’ RESULTS N ’000

Fuels

Production Chemicals

Lubricants and Greases

Power generation

Group Total

Revenue

117,679,188

2,843,433

5,825,781

1,679,342

128,027,744

Cost of Sales

109,074,484

2,208,283

3,634,162

483,209

115,400,138

Gross Profit

8,604,704

635,150

2,191,619

1,196,133

12,627,606

OANDO DOWNSTREAM DIVISION 2013 BUSINESS SEGMENTS’ RESULTS N ’000

Marketing

Supply & Trading

Sales

N ’000

N ’000

Within Nigeria

233,977,828

46,936,053

Other West African Countries

11,435,536

31,611,325

245,413,364

328,411,983

Other countries

328,411,983

Total Sales

FORTE OIL MARKET RANKING Market Position

Market Share

Product

2015

2014

2013

2012

2011

2015

2014

2013

2012

2011

PMS

1

2

3

4

6

20%

15%

13%

11%

17%

AGO

1

2

3

4

6

17%

12%

10%

6%

14%

DPK

1

2

3

4

2

17%

12%

10%

12%

35%

ATK

1

2

3

5

5

17%

12%

10%

9%

11%

Lubes

1

2

3

4

4

20%

15%

13%

12%

15%

Data visualisation by Publican Media

For a long time, Wale Tinubu has explained that the low margins in the downstream business had shrunk its appeal despite being the being the country’s biggest distributor of refined petroleum products with a 27 per cent market share. In an industry with many fringe players Oando has maintained its leadership position through investments in forecourt upgrades, branding, and supply chain efficiency.

Oando Marketing’s product range covers premium motor spirit (PMS), automotive gas oil (AGO, also known as diesel), dual purpose kerosene (DPK), aviation turbine kerosene(ATK), low pour fuel Oil (LPFO), lubricating oils and greases, insecticides, bitumen, and liquefied petroleum gas (LPG) , also known as cooking gas) including the OGas brand. For 2014, its goal is to distribute up to 2 billion litres of products.

In recent years, Oando has increasingly turned its attention to its upstream business where it enjoys higher margins. It has declared that its ambition is to grow from 45,000 barrels of crude oil production per day as at August 2014 to 100,000 bpd by 2017. Oando’s upstream division has 6 oil mining licenses, operates 40 fields, and 146 wells in production.

This is where it sees its future growth.

A Phoenix named Forte The suitor, Forte Oil, has come a long way since 2007.

That was the year Femi Otedola’s Zenon Oil acquired a 28.7 per cent stake in African Petroleum, the predecessor company of Forte Oil, from the Nigerian National Petroleum Corporation (NNPC) for $120 million.

After a couple of turbulent years, including the loss of N200 billion from unhedged positions in oil imports, the Epe-born business man, who began his career as a printer, stabilised the business through a series of painful steps. Five years later his efforts started to yield fruit. In the process, he proved to critics that he is more than a subsidy payments arbitrageur and beneficiary of a favoured monopoly system instituted to enrich cronies under former president Olusegun Obasanjo. His survival of the trial by fire earned him the market’s respect.

In 2010, African Petroleum was renamed as Forte Oil as a coded play on his F.O. initials. The company’s rebranding was launched two years later in 2012 by Brand Union, a South Africanbased brand design agency.

At present, its distribution network covers over 500 petrol stations across Nigeria, storage depots in Lagos and Port Harcourt, and a 50,000 metric ton capacity lubricant blending plant capable of producing about 100 different grades of lubricating oil each year.

Looking back at that difficult period, he says that he learned that ‘being a good entrepreneur doesn’t necessarily make you a good manager of a business.’ To cover up the managerial inadequacies he lacked, he invited experienced hands who ‘are hungry for success’ to join his team.

Not satisfied, he surrendered control to an independent board that has instituted what he calls ‘one of the best if not the best corporate governance structures in Nigeria.’

Thus far, the results have won investors’ cheer. In May, MSCI, the global indexes creator, announced that it had added Forte Oil to its Frontier Market 100 index. At the start of July, the Nigerian Stock Exchange announced that it had added the company to its list of High Priced Stocks. According to the NSE’s criteria, ‘these are securities that have traded an average of N100 or more per share in four out of the last six months period.’

By a stroke of fate Akin Akinfemiwa, the group chief executive officer, spent 6 years

in his mid-career at Oando.

From 2002 to 2003, he was the executive assistant to Mofe Boyo, the deputy managing director, and later, he became a products and derivatives trader at Oando Supply and Trading where he remained till 2009. Going by his background, if the deal does go through integrating Oando’s downstream interests into Forte Oil should be familiar territory for him.

The Conditionals There remain a number of hanging ifs over the deal. Some market watchers have conjectured that Femi Otedola may be going along for the ride for sinister purposes. Basically, they surmise that Forte Oil could have embarked on an intelligence gathering mission in the deal room. They also argue that Oando needs Forte Oil more than Forte Oil needs it. After all, how many players in this market have the credit to acquire a leviathan as vast as Oando’s business?

Consider also that the rate at which Forte Oil is growing it does not need the boost from Oando’s downstream business to transform it. Organic growth seems to be working just fine. When all is said and done, a dispassionate observer could make a strong case that the Oando add-on is a good-to-have for Forte Oil, and not a need-to-have. This mindset will decide the price that Forte Oil will be willing to pay.

And it is precisely on this last point that the deal would be determined. So far, no valuation details have been disclosed.

There is also a governance ambiguity aspect involved if Oando is not selling majority control to Forte Oil. Finally, the overwhelming market dominance of the combined company could attract the attention of competition authorities who may demand proof that it will not stifle consumer choice and competitors.

In the coming weeks, the markets will know for sure if these rumours are true. If the deal works to plan and Forte Oil emerges the winner, it will be a big garland for Femi Otedola, and an admission to the exclusive league of CEOs who have done multi-billion naira deals for Akin Akinfemiwa. If it does not work out, life should go on as normal for the company. For Oando, a successful sale to Forte Oil would deliver a needed fat cheque to keep its creditors happy. Conversely, a collapse of talks would deal a big blow at this time. The search for a new buyer would take time, and of this scarce commodity, Oando has precious little at its disposal. ;

MARKET DATA

VM | Monday, October 13, 2014 | Issue 014

VM3

TRADING UPDATE Declined Unchanged Advanced

SECTOR PRICE CHANGES – OCTOBER 2–10, 2014

MARKET REVIEW – OCTOBER 8–10, 2014 The market was closed for two days last week to celebrate of the Sallah festival. Over the 3 trading days, the All Share Index ↓1.6%, Banking Index ↓2.88%, Oil & Gas Index ↓2.27%, Insurance Index ↓1.79%, Insurance Index ↓0.56% all declined in value.

The holidays impacted the trading tallies. Altogether, 9,861 deals ↓30.47% were done for 1,350,706,881 ↓47.81% shares, at N14,470,697,440.60 ↓41.88%.

At the top of the gainer’s table were Ikeja Hotel ↑33.00%: ↑241.03%, Champion Breweries ↑27.37%: ↓6.98%, Conoil ↑10.23%: ↓23.72%, Learn Africa ↑9.09%: ↓26.90%, Cutix ↑5.00%: ↑6.18%, Livestock Feeds ↑3.01%: ↓28.37%, Fidson Healthcare ↑2.10%: ↑21.86%, Nigerian Breweries ↑1.89%: ↑7.21%, Eterna ↑1.60%: ↓15.74%, and Associated Bus Company ↑1.47%: ↓15.85.

Featuring on the loser’s chart were A.G. Leventis ↓13.64%: ↓21.76%, UACN Property Development Co. ↓8.52%: ↓23.68%, Stanbic IBTC Holdings ↓8.49%: ↑50.02%, Zenith International Bank ↓6.17%: ↓16.79%, UBA Capital ↓5.96%: ↓28.65%, Oando ↓5.20%: ↑3.09%, Transnational Corporation ↓5.18%: ↑26.21%, International Energy Insurance Co. ↓5.08%: ↑3.70%, Premier Breweries ↓5.00%: ↑442.86%, and Mansard Insurance ↓4.83%: ↑12.65%, Legend: The figure before the colon ( : ) signifies the stock’s performance last week. The value behind the : symbol represents its year-to-date performance.

Agriculture Conglomerates Construction/Real Estate Consumer Goods Financial Services Healthcare ICT Industrial Goods Natural Resources Oil & Gas Services

3 1 3 8 19 4 1 2 0 4 6

2 4 6 15 35 4 9 15 5 4 9

0 0 0 8 3 2 1 4 0 3 3

DASHBOARD Friday Ticker

Change, Close % 7UP 162.86 0.00% ABCTRANS 0.69 0.00% ACCESS 8.77 -1.46% AGLEVENT 1.33 -5.00% AIICO 0.80 0.00% AIRSERVICE 1.91 0.00% ASHAKACEM 32.00 -0.06% BETAGLAS 19.01 0.00% CADBURY 54.52 0.04% CAP 39.00 0.36% CCNN 15.00 -0.13% CONOIL 52.00 0.35% CONTINSURE 1.00 0.00% COURTVILLE 0.53 1.92% CUSTODYINS 3.98 -0.50% CUTIX 1.98 4.76% DANGCEM 217.01 0.86% DANGFLOUR 6.23 -3.11% DANGSUGAR 8.10 -0.25% DIAMONDBNK 6.20 -0.80% ETERNA 3.80 -0.26% ETI 18.85 0.53% FBNH 12.91 -1.90% FCMB 4.30 -0.69% FIDELITYBK 2.02 0.50% FIDSON 3.33 0.00% FLOURMILL 62.16 0.26% FO 220.50 1.94% GLAXOSMITH 58.06 -4.03% GUARANTY 29.57 -0.64% GUINNESS 193.98 4.01% HONYFLOUR 3.83 -3.28% INTBREW 31.00 0.00% JBERGER 60.65 -5.00% LINKASSURE 0.50 0.00% MANSARD 2.76 0.00% MAYBAKER 1.83 5.17% MOBIL 174.00 -1.14% MRS 53.20 0.00% NAHCO 4.91 -1.80% NASCON 9.26 0.11% NB 180.00 -0.06% NEIMETH 1.05 0.00% NEM 0.77 -1.28% NESTLE 1,022.00 -0.78% NIGERINS 0.50 0.00% NNFM 22.90 OANDO 25.20 0.44% OKOMUOIL 33.00 0.00% PAINTCOM 1.68 PORTPAINT 5.23 0.00% PRESCO 35.36 -0.84% PRESTIGE 0.50 0.00% PZ 31.92 0.38% REDSTAREX 4.40 0.00% ROYALEX 0.57 0.00% RTBRISCOE 0.89 3.49% SEPLAT 610.00 -1.79% SKYEBANK 2.77 -2.81% SOVRENINS 0.50 0.00% STANBIC 32.02 -3.70% STERLNBANK 2.32 0.87% TOTAL 176.00 0.28% TRANSCORP 5.49 -3.68% UAC-PROP 14.50 -4.61% UACN 58.00 0.21% UBA 6.31 -3.22% UBCAP 2.05 -3.76% UBN 9.06 -0.33% UNILEVER 45.65 -1.62% UNITYBNK 0.50 0.00% VITAFOAM 4.27 -0.47% WAPCO 128.00 0.79% WAPIC 0.71 -2.74% WEMABANK 0.99 4.21% ZENITHBANK 22.80 -2.98%

5-day Volume 209 10,441 119,160 1,526 9,899 455 2,010 0 1,592 4,254 11,178 3,797 19,725 720 12,474 1,215 5,816 534 4,322 9,852 2,253 19,769 186,868 71,043 38,937 3,255 7,589 1,098 153 60,054 882 3,023 2,754 342 5 0 2,584 513 15 5,626 5,522 11,770 1,742 8,353 255 200 0 100,889 2,581 0 11 205 980 3,476 5,467 152 1,137 553 109,368 2 13,173 226,175 139 211,211 12,448 41,655 69,556 53,080 8,301 698 22,035 6,019 1,931 95,696 12,785 197,676

4-Week

Change, Change, Open Week Hi Week Lo Volume Open Volume % % 162.86 162.86 155.11 0.00% 1,971 147.73 10.24% 11,796 0.68 0.70 0.65 1.47% 68,079 0.70 -1.43% 199,624 9.01 9.24 8.70 -2.66% 517,704 9.59 -8.55% 2,276,227 1.40 1.47 1.33 -5.00% 2,351 1.45 -8.28% 34,181 0.80 0.81 0.80 0.00% 56,745 0.83 -3.61% 1,815,655 2.11 2.11 1.91 -9.48% 477 2.10 -9.05% 14,908 32.00 32.98 31.95 0.00% 14,468 32.14 -0.44% 129,147 20.00 20.00 19.01 -4.95% 157 18.85 0.85% 45,578 53.69 54.93 53.69 1.55% 6,232 52.41 4.03% 61,957 38.00 40.90 38.00 2.63% 5,676 39.95 -2.38% 35,511 15.73 15.87 14.82 -4.64% 23,446 14.50 3.45% 83,411 49.36 52.00 49.36 5.35% 6,568 55.00 -5.45% 24,826 1.00 1.02 0.97 0.00% 91,180 0.98 2.04% 224,094 0.54 0.54 0.51 -1.85% 5,970 0.53 0.00% 133,310 4.09 4.29 3.90 -2.69% 82,003 3.95 0.76% 166,537 1.90 1.98 1.75 4.21% 6,844 1.90 4.21% 59,435 218.98 220.80 215.00 -0.90% 14,240 215.00 0.93% 387,582 6.23 6.76 6.13 0.00% 1,785 6.80 -8.38% 21,292 8.16 8.49 8.10 -0.74% 35,412 8.50 -4.71% 340,678 6.25 6.27 6.19 -0.80% 325,408 6.30 -1.59% 4,443,562 3.74 3.89 3.65 1.60% 13,176 3.99 -4.76% 116,399 18.70 19.19 18.70 0.80% 286,548 19.32 -2.43% 21,491,450 13.48 13.52 12.74 -4.23% 433,315 14.52 -11.09% 3,706,710 4.51 4.64 4.12 -4.66% 168,238 4.15 3.61% 1,213,836 2.05 2.11 1.97 -1.46% 348,485 2.00 1.00% 1,364,392 3.35 3.52 3.33 -0.60% 16,665 3.50 -4.86% 127,178 61.98 64.45 61.23 0.29% 23,184 63.00 -1.33% 86,840 224.00 224.99 215.20 -1.56% 3,077 230.01 -4.13% 35,543 61.01 62.01 58.06 -4.84% 18,450 63.17 -8.09% 60,482 30.01 30.50 29.50 -1.47% 721,407 29.16 1.41% 3,356,332 188.98 195.70 185.20 2.65% 5,209 170.00 14.11% 78,853 4.00 4.10 3.83 -4.25% 17,085 4.06 -5.67% 166,368 31.05 31.47 30.00 -0.16% 11,432 28.90 7.27% 532,675 63.84 63.84 60.65 -5.00% 522 61.01 -0.59% 15,989 0.50 0.50 0.50 0.00% 5 0.50 0.00% 1,821 2.89 3.04 2.76 -4.50% 3,140 2.50 10.40% 445,965 1.72 1.83 1.66 6.40% 18,631 1.38 32.61% 150,987 173.30 176.00 173.08 0.40% 2,346 180.10 -3.39% 10,261 53.20 53.20 53.20 0.00% 70 50.54 5.26% 1,114 4.98 5.20 4.91 -1.41% 11,446 5.11 -3.91% 186,783 9.00 9.74 9.00 2.89% 15,347 9.43 -1.80% 126,313 176.95 181.99 176.66 1.72% 55,881 177.19 1.59% 354,272 1.10 1.10 1.05 -4.55% 3,116 1.03 1.94% 63,182 0.79 0.80 0.77 -2.53% 23,503 0.76 1.32% 727,271 1,050.02 1,055.00 1,022.00 -2.67% 10,775 1,013.00 0.89% 35,239 0.50 0.50 0.50 0.00% 205 0.50 0.00% 122,953 22.90 22.90 22.90 0.00% 4 20.91 9.52% 1,095 26.37 27.00 24.85 -4.44% 196,262 25.11 0.36% 1,316,830 33.01 34.00 33.00 -0.03% 4,606 33.50 -1.49% 49,710 1.68 1.68 1.68 0.00% 0 1.60 5.00% 1,253 5.23 5.23 5.23 0.00% 121 5.00 4.60% 24,783 38.50 38.50 35.36 -8.16% 4,353 37.00 -4.43% 20,042 0.50 0.50 0.50 0.00% 1,110 0.50 0.00% 4,709 32.15 33.60 31.65 -0.72% 10,673 34.60 -7.75% 99,582 4.50 4.50 4.21 -2.22% 31,894 4.34 1.38% 166,845 0.59 0.59 0.57 -3.39% 913 0.58 -1.72% 41,502 0.85 0.89 0.84 4.71% 6,670 0.89 0.00% 35,317 639.99 640.00 610.00 -4.69% 2,178 655.26 -6.91% 84,150 2.88 3.16 2.73 -3.82% 730,648 2.87 -3.48% 6,502,964 0.50 0.50 0.50 0.00% 7 0.50 0.00% 4,033 33.25 33.25 32.02 -3.70% 51,482 30.00 6.73% 189,679 2.26 2.35 2.20 2.65% 385,438 2.30 0.87% 1,218,167 183.97 183.97 173.05 -4.33% 1,574 180.10 -2.28% 7,591 5.79 5.81 5.43 -5.18% 1,153,224 6.05 -9.26% 4,893,388 15.81 16.64 14.44 -8.29% 15,517 15.18 -4.48% 42,996 58.00 58.00 57.00 0.00% 77,979 58.00 0.00% 220,524 6.66 6.84 6.31 -5.26% 382,694 7.19 -12.24% 2,340,946 2.18 2.20 2.05 -5.96% 113,191 2.02 1.49% 4,780,185 9.15 9.39 9.06 -0.98% 16,664 10.04 -9.76% 98,231 47.00 47.00 45.65 -2.87% 3,768 47.75 -4.40% 70,918 0.50 0.50 0.50 0.00% 306,855 0.50 0.00% 1,085,090 4.11 4.29 4.10 3.89% 14,216 4.30 -0.70% 51,637 127.00 129.00 125.50 0.79% 5,123 119.70 6.93% 82,648 0.74 0.74 0.70 -4.05% 110,320 0.73 -2.74% 1,290,197 0.95 0.99 0.92 4.21% 66,824 0.91 8.79% 245,024 24.30 24.60 22.69 -6.17% 839,944 24.60 -7.32% 3,747,133

5-Week trading1

52-Week price range Low 68.00 0.65 7.22 1.25 0.74 1.91 13.87 11.85 49.90 35.96 8.00 30.24 0.93 0.50 1.62 1.59 185.00 6.13 8.00 5.86 2.48 12.40 11.50 3.01 1.85 1.91 58.10 50.40 58.06 22.67 162.00 2.80 19.94 59.18 0.50 1.96 1.33 111.01 32.63 4.56 8.85 140.00 0.79 0.55 950.00 0.50 18.00 10.40 32.15 1.33 4.00 34.00 0.50 30.08 4.01 0.50 0.84 590.00 2.57 0.50 19.00 2.09 146.26 1.62 12.80 42.58 6.31 1.24 8.00 42.50 0.50 3.87 95.01 0.66 0.85 19.50

Close ( )

High

YtD

162.86 128.00% 0.97 -11.74% 10.65 -8.65% 1.86 -18.40% 1.00 -13.04% 3.97 -42.99% 34.60 46.25% 22.10 31.74% 110.00 -43.90% 51.66 -18.72% 15.98 25.10% 79.80 -15.20% 1.29 -16.67% 0.89 -18.46% 4.30 82.57% 2.27 1.54% 250.02 0.39% 10.76 -39.10% 12.49 -28.32% 8.20 -17.33% 5.73 -19.66% 20.28 15.01% 17.29 -20.80% 4.64 11.98% 2.95 -25.19% 3.72 21.09% 83.64 -24.03% 259.94 137.43% 74.97 -17.06% 31.80 6.56% 262.00 -17.81% 4.50 -0.52% 31.50 9.46% 76.45 -3.84% 0.50 0.00% 3.15 10.40% 2.64 -28.24% 182.00 50.00% 70.00 2.86% 6.46 -22.68% 15.10 -37.64% 189.00 9.08% 2.08 -4.55% 0.97 -4.94% 1,250.01 -13.54% 0.54 0.00% 25.57 4.04% 36.89 -5.72% 45.99 -26.39% 2.23 -13.85% 6.25 -0.38% 49.00 -9.33% 0.81 -20.63% 41.46 -13.72% 5.35 3.53% 0.69 5.56% 1.49 -36.88% 735.00 0.86% 4.67 -38.58% 0.50 0.00% 35.00 43.33% 2.74 -7.20% 195.50 1.56% 7.08 26.50% 21.31 -5.70% 67.85 3.59% 9.60 -31.04% 3.04 -9.69% 10.89 -5.72% 64.00 -13.87% 0.69 0.00% 5.70 -11.23% 136.73 11.30% 1.48 -37.17% 1.40 -22.66% 27.40 -8.80%

PE

EPS

33.12

18.40

4.46 0.21 1.57 0.23 0.15 0.50 0.80 3.38 1.57 1.67 1.12 3.34 0.16 0.11 0.24 0.19 11.80

10.00 3.75 6.23 5.15 5.98 4.89 3.02 14.17 18.34 47.60 20.34 9.05 23.86 11.27 48.39 9.97 12.57 18.05 19.33 16.67 53.85 15.49 8.82 34.37

0.81 1.65 0.61 3.67 2.16 0.88 0.68 0.24 3.38 4.63 3.00 3.27 7.88 0.34 0.63 6.74 0.04 0.15 0.09 10.44 1.04 0.32 1.05 5.24

36.43 25.00

28.82 0.02

22.42 14.41 4.57 9.19 4.43 1.99 23.82 7.20 5.89

1.11 2.29 0.35 0.60 8.38 0.25 1.34 0.61 0.10

3.31 3.36 16.67 3.68 13.59 62.57 6.59 26.84 3.73 7.07 48.46 35.02 4.65 6.01

0.84 0.15 1.92 0.63 12.91 0.09 2.20 2.14 1.70 0.29 0.19 1.37 0.11 0.71

10.14

0.07

6.59

3.46

5.58 5.91 5.26 4.02 40.00 34.40 23.30 13.39 15.53 6.25 4.73 16.58

Liquidity Rating2

LEGEND 5-week trading bar: This bar shows the volume of the company’s shares traded during the 5 most recent weeks. Each alternate colour bar represents a consecutive week. The bar is to be read from left to right. The first bar on the left (light blue) represents the traded volume five weeks ago. The next bar (grey) represents the volume 4 weeks ago. The 5th and last bar (light blue) signifies the volume of shares exchanged last week. The purpose of the Weekly Trading bar is to give readers an instant view of trading volumes as they compare on a week-by-week basis.

1

Liquidity Rating: This indicates the level of demand for a company’s shares based on the number of deals rather than volume done over the past week. Stocks are graded according 5 categories. Blue spheres are used to represent liquidity.

• Category 5: This is the highest liquidity rating shown by 5 blue spheres.

Stocks that have traded more than 20 deals per day on at least 4 days in the past week are awarded this score • Category 4: This is shown by 4 blue spheres. It indicates that the stock has 2

traded between 12 to 19 deals per day on at least 4 days in the past week • Category 3: Shown with 3 spheres, this liquidity classification represents those stocks that have traded 8 to 11 deals per day on at least 4 days in the past week • Category 2: Shown with 2 spheres it identifies those stocks that traded 4 to 7 deals per day on at least 4 days in the past week • Category 1: This is shown by one blue sphere to represent stocks on which 3 deals and/or below were traded per day on at least 4 days in the week.

VM4

MARKET DATA

VM | Monday, October 13, 2014 | Issue 014

MARKET SNAPSHOT 3-MONTH PRICE TREND OF BELLWETHER STOCKS

ACCESS

8.77 0.24

7.22

PE 5.58

10.65 -0.83 -8.65%

YtD

3M

-1.03 -10.51%

-0.24 -2.66%

1W

02/10

July

August

CONTINSURE 0.93 YtD

September

T

-0.20 -16.67%

3M

PE 6.25 0.00 0.00%

1W

02/10

July

August

FCMB

September

T

0.46 11.98%

3M

0.15 3.61%

-0.21 -4.66%

1W

02/10

July

August

GUARANTY 22.67 YtD

September

T

1.82 6.56%

3M

PE 9.05 -0.44 -1.47%

1W

02/10

August

MANSARD

September

T

3M

0.17 6.56%

-0.13 -4.50%

1W

02/10

July

August

OANDO

September

T

-1.53 -5.72%

3M

-2.80 -10.00%

-1.17 -4.44%

1W

02/10

July

August

STANBIC

September

T

PE 16.67

35.00 9.68 43.33%

3M

4.97 18.37%

-1.23 -3.70%

1W

02/10

July

August

UBA

September

T

F

PE 3.74

9.60 -2.84 -31.04%

3M

-1.50 -19.21%

-0.35 -5.26%

1W

0.00 0.00%

02/10

July

August

DANGCEM

T

-11.42% 0.39%

3M

-27.99 -11.42%

-1.97 -0.90%

1W

02/10

July

August

FIDELITYBK 1.85 YtD

September

T

3M

PE 3.02 -0.03 -1.46%

1W

02/10

July

August

GUINNESS 162.00 YtD

September

T

3M

-6.02 -3.01%

5.00 2.65%

02/10

July

August

MOBIL

September

T

58.00 50.00%

3M

39.80 29.66%

0.70 0.40%

1W

02/10

July

August

OKOMUOIL 32.15 YtD

September

T

-11.83 -26.39%

3M

0.00 0.00%

-0.01 -0.03%

02/10

August

TOTAL

September

T

PE 13.59

195.50 2.70 1.56%

3M

1.02 0.58%

-7.97 -4.33%

1W

02/10

July

August

UNILEVER 42.50 YtD

F

September

T

-7.35 -13.87%

3M

F

45.65 1.35 PE 35.02

64.00 -5.85 -11.36%

-1.35 -2.87%

1W

02/10

July

August

September

DIAMONDBNK 5.86 YtD

T

-1.30 -17.33%

3M

PE 3.75 -0.05 -0.80%

1W

02/10

July

August

FLOURMILL 58.10 YtD

September

T

3M

-6.08 -8.90%

0.18 0.29%

02/10

July

August

HONYFLOUR 2.80 YtD

September

T

3M

-0.29 -7.04%

-0.17 -4.25%

02/10

July

August

NASCON

September

T

-5.59 -37.64%

3M

-2.24 -19.48%

0.26 2.89%

1W

02/10

July

August

PRESCO YtD

September

T

3M

-2.70 -7.09%

-3.14 -8.16%

1W

02/10

July

August

UACN

September

T

PE 26.84

67.85 2.01 3.59%

3M

-4.40 -7.05%

0.00 0.00%

1W

02/10

July

August

WAPCO

September

T

F

PE 0.00

136.73 13.00 11.30%

3M

16.99 15.30%

1.00 0.79%

1W

02/10

July

August

September

ETI 2.46 15.01%

1.35 7.71%

3M

0.15 0.80%

1W

02/10

July

August

September

FO

T

127.63 137.43%

0.00 0.00%

3M

-3.50 -1.56%

1W

02/10

July

August

September

INTBREW

T

2.68 9.46%

2.19 7.60%

3M

-0.05 -0.16%

1W

02/10

July

August

September

NB

T

14.99 9.08%

5.50 3.15%

3M

3.05 1.72%

1W

02/10

July

August

September

PZ

T

-5.08 -13.72%

-3.59 -10.11%

3M

-0.23 -0.72%

1W

02/10

July

August

September

T

PE 6.59

21.31 -2.80 -16.18%

3M

-1.31 -8.29%

1W

02/10

July

August

September

ZENITHBANK 19.50 YtD

T

3M

10/10

F W T

F

22.80 1.50 PE 6.59

27.40 -2.20 -8.80%

F

14.50 1.31

12.80 -0.88 -5.70%

10/10

F W T

August

September

FBNH YtD

02/10

September

T

10/10

F W T

F

02/10

July

August

September

T

10/10

F W T

F

02/10

July

August

September

T

-2.50 -9.88%

10/10

F W T

F

-1.50 -6.17%

1W

02/10

July

T

10/10

F W T

PE 5.98

17.29 -3.39 -20.80%

-3.23 -20.01%

3M

-0.57 -4.23%

1W

02/10

July

August

September

GLAXOSMITH

T

-8.44 -12.69%

3M

-2.95 -4.84%

1W

02/10

July

August

September

JBERGER

T

-7.25 -10.68%

3M

-3.19 -5.00%

1W

02/10

July

August

September

NESTLE

T

1250.01 -160.00 -13.54%

10/10

F W T

-108.00 -9.56%

3M

PE 36.43 -28.02 -2.67%

1W

02/10

July

August

September

SEPLAT

T

10/10

F W T

PE --

735.00 5.20 0.86%

-67.00 -9.90%

3M

-29.99 -4.69%

1W

02/10

July

F

610.00 29.99

590.00 YtD

F

1022.00 28.02

950.00 YtD

F

PE 9.97

76.45 -2.42 -3.84%

10/10

F W T

60.65 3.19

59.18 YtD

F

PE 20.34

74.97 -11.94 -17.06%

10/10

F W T

58.06 2.95

58.06 YtD

F

12.91 0.57

11.50

August

September

T

10/10

F W T

F

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. 1-year price change 10. 3-months price change 11. 1-week price change 12. Daily price movement over 3 months.

13. 30-day moving average 14. Daily price movement over last week

1 2 TICKER

4

3

19.23 1YtD

5

25.23 0.018

August

September

T

10/10

F W T

F

PE 7.29

27.406 0.23 0.92%

3M

2.90 12.99%

7 0.01

1W

0.04%

10

12

August

-0.73 -4.64%

02/10

July

9

July

PE 13.39

1W

LEGEND

UAC-PROP YtD

F

PE 23.82

41.46

3.68 32.51%

3M

10/10

F W T

31.92 0.23

30.08 YtD

F

PE 34.37

189.00

3.01 25.10%

10/10

F W T

180.00 3.05

140.00 YtD

F

PE 48.39

31.50

YtD

15.98

10/10

F W T

31.00 0.05

19.94 YtD

F

PE 47.60

259.94

15.00 0.73

8.00

10/10

F W T

220.50 3.50

50.40 YtD

F

PE 5.15

20.28

CCNN

10/10

F W T

18.85 0.15

12.40 YtD

T

10/10

F W T

128.00 1.00

95.01 YtD

F

1.00 2.63%

1W

10/10

F W T

58.00 0.00

42.58 YtD

F

PE 4.43

49.00

-0.10 -0.26%

3M

10/10

F W T

35.36 3.14

34.00 -3.64 -9.33%

F

PE 8.82

15.10

-8.98 -18.72%

10/10

F W T

9.26 0.26

8.85 YtD

F

PE 11.27 1W

YtD

PE 23.30

51.66

10/10

F W T

3.83 0.17 4.50

-0.02 -0.52%

F

PE 18.34

1W

39.00 1.00

35.96

10/10

F W T

62.16 0.18 83.64

-19.66 -24.03%

F

6.20 0.05 -0.05 -0.80%

CAP

10/10

F W T

8.20

10/10

F W T

0.83 1.55%

1W

10/10

F W T

176.00 7.97

146.26 YtD

F

PE 14.42

1W

-17.63 -24.44%

3M

10/10

F W T

33.00 0.01 45.99

July

F

PE 16.67

182.00

-42.66 -43.90%

10/10

F W T

174.00 0.70

111.01 YtD

F

PE 23.86

1W

YtD

PE 34.40

110.00

10/10

F W T

193.98 5.00 262.00

-42.03 -17.81%

F

2.02 0.03 0.03 1.51%

54.52 0.83

49.90

10/10

F W T

2.95 -0.68 -25.19%

F

PE 18.40

250.02

CADBURY

10/10

F W T

217.01 1.97

185.00 YtD

September

10/10

F W T

6.31 0.35

6.31 YtD

F

PE 40.00

1W

10/10

F W T

32.02 1.23

19.00 YtD

F

PE 22.42

36.89

0.92 2.96%

10/10

F W T

25.20 1.17

10.40 YtD

F

PE 18.05

3.15

3M

10/10

F W T

2.76 0.13

1.96 0.26 10.40%

F

29.57 0.44 -0.43 -1.43%

10.12 46.25%

10/10

F W T

31.80

July

YtD

F

PE 4.89

4.64

YtD

32.00 0.00 34.60

10/10

F W T

4.30 0.21

3.01 YtD

F

1.00 0.00 -0.18 -15.25%

13.87

10/10

F W T

1.29

ASHAKACEM

11 14

13 May

21/07

June

July

25/07

M T W T

F

MARKET DATA

VM | Monday, October 13, 2014 | Issue 014

VM5

MARKET SNAPSHOT +140% SLIPPING +130%

LEADING

11 21

Bubble size = Market Cap

+120% +110% +100% +90% +80% YEAR-TO-DATE RETURN

+70%

# TICKER

WTD

YTD

1 DANGCEM

-0.90

0.39

2 NB

1.72

9.08

3 GUARANTY

-1.47

6.56

4 NESTLE

-2.67 -13.54

5 ZENITHBANK

-6.17 -8.80

6 FBNH

-4.23 -20.80

7 WAPCO

0.79 11.30

8 STANBIC

-3.70 43.33

9 ETI

0.80 15.01

+60%

10 GUINNESS

2.65 -17.81

+50%

11 FO

-1.56 137.43

12 OANDO

-4.44 -5.72

13 TRANSCORP

-5.18 26.50

14 UBA

-5.26 -31.04

15 ACCESS

-2.66 -8.65

16 UNILEVER

-2.87 -13.87

17 FLOURMILL

0.29 -24.03

18 UBN

-0.98 -5.72

19 PZ

-0.72 -13.72

20 UACN

0.00

21 7UP

0.00 128.00

22 CADBURY

1.55 -43.90

23 INTBREW

-0.16

24 DANGSUGAR

-0.74 -28.32

25 DIAMONDBNK

-0.80 -17.33

26 FCMB

-4.66 11.98

27 JBERGER

-5.00 -3.84

28 ASHAKACEM

0.00 46.25

288

8

+40% +30%

29

13

+20%

9

26

+10%

23

3 30

0%

27 36

-10%

1

40

12

5

-20%

33

25

6

-30%

2

18

15 16 4

32

7

20

31

19 38 37 17

24

14

35

10

39

34

-40%

22

-50% LAGGING -10%

Indices

-5%

YtD, %

ASI

-1.60% -0.32%

NSE30

-1.65% -0.52%

NSEBNK

-2.88% -1.55%

NSEINS

-1.79% -0.31%

NSECNSMRGDS

0.37% -0.02%

WtD, %

0% WEEK-TO-DATE RETURN TRADING BREAKDOWN

BY SECTOR

DtD, %

Sector -2.14%

%

Financial Services

50 \ 73

Natural Resources

39 \ 8

Services

5\5

Others

6 \ 14

-3.28%

-7.12%

FGN Bond Index 3120

-4.66%

-7.37%

-2.27%

NSEOILGAS -0.03%

32.66%

-0.69%

NSELOTUSISLM 0.22%

-6.48%

-0.56%

NSEINDUSTR 0.70%

13.0

Market Value YTD Return

3090

12.5

3060

12.0

3030

11.5

6.96%

-8% -6% -4% -2% 0%

2%

4%

3000 11.0 20/10 08/10 10/10

7%

IMPROVING 10%

5%

GLOBAL INTEREST RATES & INFLATION TARGETS Central Last Date % Inflation Rate Bank Change Change Target China 6.00% 05.07.2012 -0.31 4.00% Japan 0-0.10% 05.10.2010 -0.20 2.00% UK 0.50% 05.03.2009 -0.50 2.00% USA 0-0.25% 16.12.2008 -0.1 2.00% Eurozone 0.05% 04.09.2014 -0.10 <2.00% Brazil 11.00% 02.04.201 +0.25 4.5% +/-2.0% Canada 1.00% 20.07.2010 +0.25 2.0% +/-1.0% Egypt -0.50 8.25% 05.12.2013 India 8.00% 28.01.2014 +0.25 Indonesia 7.50% 12.11.2013 +0.25 4.5% +/-1.0% Malaysia 3.25% 10.06.2014 +0.25 Mexico 3.00% 06.06.2014 -0.50 3.00% +/-1.0% Morocco 3.00% 28.03.2012 -0.25 Nigeria 12.00% 10.10.2011 +2.75 6.00% - 9.00% Qatar 4.50% 10.08.2011 -0.50 Russia 8.00% 28.07.2014 +0.50 5%* Thailand 2.00% 12.03.2014 -0.25 0.5% - 3.0% Turkey 8.75% 24.06.2014 -0.75 5.00% * +/- 1.5 pct point uncertainty band

Date

Deals

Turnover Volume

Turnover Value

Traded Stocks

Advanced Stocks

Declined Stocks

Unchanged Stocks

All Shares Index Value

1

08.10.14

4,567

408,897,218

5,717,087,626.40

105 \ 105

20 \ 24

26 \ 27

59 \ 54

40,995.02

2

09.10.14

4,894

698,841,661

6,068,835,834.99

110 \ 106

18 \ 30

35 \ 23

57 \ 53

40,572.25

3

10.10.14

4,967

242,968,002

2,684,773,979.21

112 \ 104

15 \ 29

30 \ 25

67 \ 50

40,444.39

0.40 50.00

30 TOTAL

-4.33

31 FIDELITYBK

-1.46 -25.19

32 GLAXOSMITH

-4.84 -17.06 2.65

34 SKYEBANK

-3.82 -38.58 5.35 -15.20

36 PRESCO

-8.16 -9.33

37 OKOMUOIL

-0.03 -26.39

38 CAP

2.63 -18.72

39 MAYBAKER

6.40 -28.24

40 NEIMETH

-4.55 -4.55

NSEASI

40,444.39

41,40 41,15 40,90 40,65 40,40 Th

Fr

S&P 500

Week Close

Change

WtD

MtD

QtD

YtD

1

All Shares Index

41,103.94

40,444.39

-659.55

-1.6

-1.86

-1.86

-2.14

2

NSE 30 Index

1,875.63

1,844.59

-31.04

-1.65

-2

-2

-3.28

3

NSE Banking Index

428.29

415.96

-12.33

-2.88

-2.16

-2.16

-7.12

4

NSE Insurance Index

148.40

145.75

-2.65

-1.79

-2.31

-2.31

-4.66

5

NSE Consumer Goods Index

1,015.47

1,019.20

3.73

0.37

-1.28

-1.28

-7.37

6

NSE Oil/Gas Index

461.33

450.87

-10.46

-2.27

-2.16

-2.16

32.66

7

NSE Lotus Islamic Index

2,696.03

2,677.45

-18.58

-0.69

-1.78

-1.78

-6.48

8

NSE Industrial Index

2,739.15

2,723.85

-15.3

-0.56

-0.47

-0.47

6.96

We

Th

Fr

1,906.13

1,980 1,960 1,940 1,920 1,900 Mo

Tu

FTSE 100 Week Opening

-7.20

35 CONOIL

Fr

Index

1.56

33 STERLNBANK

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

9.46

29 MOBIL

We

MARKET SNAPSHOT

3.59

We

Th

Fr

6,339.97

6,570 6,510 6,450 6,390 6,330 Fr

Mo

Tu

JSE FTSE

We

Th

Fr

47,092.24

49,20 48,65 48,10 47,55 47,00 Fr

Mo

Tu

We

Th

Fr

VM6

ARENA

VM | Monday, October 13, 2014 | Issue 014

ART AS AN ALTERNATIVE INVESTMENT

Sogal Art Auction berths in Lagos

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

HE STAGE IS SET for the entry of Sogal, the newest auction house in the growing secondary art market in Nigeria. On October 20, 2014, Sogal established by leading Lagos art dealer, Rahman Akar, proprietor of Signature Gallery, will premiere at the Porsche Centre in Lagos. Focusing on modern and contemporary art, the auction will feature 151 lots by 118 select artists from 11 countries across Africa, Europe, and Asia. Prominent

T

names include iconic Spanish surrealist, Salvador Dali, Senegalese Soly Cisse, and celebrated Ghanaians Ablade Glover, El Anatsui, Edmond Tetteh, Kofi Agorsor, and Amon Kotei, as well as major Nigerian artists, Justus Akeredolu, Bruce Onobrakpeya, Ben Osawe, Kolade Oshinowo, and Dele Jegede.

Among the new entrants into the Lagos auction scene are Iraqi Salam Omar, Zimbabwean Berry Bickle, Ivorien Gensin, and Sabhan Adam from Syria. Others are Nigerian artists Bolaji Akingbade, G. Okojie, Akhile Ehitor, Osuchukwu Stephen, Chijoke Nwoga, and Jumoke Sanwo whose works, II Edition of 2, and A Thousand Brown Roofs are interestingly the only photographs in the auction.

In a recent interview with Luciano Uzuegbu of Omenka magazine, Akar explains that Solgal is Lagos spelt in reverse and that he was inspired to establish an auction house because he was uncomfortable with the manner in which existing ones were run in Lagos particularly with regard to the

poor selection of artworks.

Arguably, the history of organized auction sales began in Nigeria with, Before the Hammer Falls, held by Nimbus Gallery in December, 1999 at the MUSON Centre in Lagos, where N1.7 million ($10,600) was achieved for The Palm Wine Drinkards, a 1965 painting by Bruce Onobrakpeya.

Since then, more auction houses have appeared on the Lagos scene, recording significant growth with impressive sales.

Arthouse Contemporary founded in 2007 by Kavita Chellaram, holds the alltime record for artwork sold in Nigeria at N30.8 million ($192,500) for the smaller version of celebrated artist, Ben Enwonwu’s iconic Anyanwu.

Chellaram asserts she started Arthouse Contemporary to establish reliable pricing mechanisms for Nigerian art.

Founded by lawyer, Bolanle Austin-Peters in 2004, Terra Kulture is a private initiative established to promote the richness and diversity of Nigerian visual art and culture.

It also boasts of a regular gal-

Salvador Dali, Elephant in Space, Bronze and plexi, glass, 94x46cm, est. between N12,900,000- 16,125,000 ($75,000 - $93,750)

lery, where artists are exhibited and their works consigned for sale. Terra Kulture successfully set-up its first auction in 2009 to commemorate the Commonwealth Heads of Government Meeting. A year later, it collaborated with Nimbus Gallery for an expectedly broader impact. After staging a first solo auction in 2011. Terra Kulture again partnered with Mydrim Gallery on an auction in Abuja.

The auction recorded a princely sum of N27,605,000 ($172,134) in sales (from a selection of Nigerian and Ghanaian artists) representing a success rate of over 65%. A collaboration christened the Lagos Art Auction between these 2 galleries followed in April 2012, recording over 57% in sales. Nike Art Gallery and Tribes Art Gallery have also held auctions in Lagos.

With an emphasis on quality, the entry of Sogal into the Lagos auction scene will no doubt contribute to the growth of the domestic secondary art market, and consequently an increased appreciation of Nigerian and indeed African art on the international art market. ;

SPOTLIGHT

Sim Shagaya, Founder at Konga, Serial entrepreneur

Sim Shagaya

IMDUL SHAGAYA, Sim for short, wears his military background with ease. The way he walks and talks gives the impression of a man used to exercising quiet authority from an early age. He is an ex-Boy, a venerable title jealously reserved for former students of the 60-year old Nigerian Military School, Zaria. After passing out, Sim spent two years doing ‘unit work’ as a noncommissioned officer in the Nigerian Army. Associates attribute his famed discipline, and obsessive attention to detail, necessary qualities to thrive in Nigeria’s start-up-unfriendly

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environment, to his military precedents.

Sim left Nigeria’s shores in the early nineties for his university education. He studied electrical engineering at the George Washington University, Washington D.C. After his bachelor’s program, he went straight on to earn a Master of Engineering Management (MEM) degree at Dartmouth College’s Thayer School of Engineering. He capped his academic sojourn in America with an MBA from Harvard Business School.

Over a 16-year career, Sim has garnered a diversified portfolio of experience. Indeed, it reads like a Nigerian version of Forrest Gump, the unwitting character who manages to be at all the right places at the right time. The only difference is that Sim’s towering I.Q. leaves no one in doubt. At Rand Merchant Bank, he was part of the team that arranged financing worth several million dollars for V-Mobile (now Airtel), Conoil, and LCC Toll Road.

In January, 2006 he moved on from there to serve as the local guide – Sherpa – to Google when the Internet and search

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giant was making its foray into Africa. His restless energy and keen feel for the next bounce of the ball led him to start DealDey.com, an early online shopping and deal site. It was a short step from there to Konga. com, his current perch. Asked about his future career plans,

Sim has memorized three simple truths for survival: start lean, watch your expenses carefully, and prioritize wisely. he responds with three words: ‘Konga for life.’

It has not all been success along the way. Sim has had his fair share of hiccups too.

Alarena, which has since been renamed Lovebase.com, a dating site he founded, is yet to turn cash flow positive. Another venture, JobClan, a job postings portal, did not catch fire with potential employers and job seekers either. One other attempt called Gbogbo, a classified ads site, did not go anywhere. A serial entrepreneur, Sim tried his hands at

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content streaming with iNollywood. That too did not get much traction. This is not to discard his valid achievements. iNollywood was the first to get online licensing rights for the Nigerian Television Authority’s catalogue of classic soaps including New Masquerade, Vil-

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lage Headmaster, and Samanja.

Through all of this Sim learned his lessons, cut his losses and moved on. He is not one to embark on quixotic missions. He knows when to call it a day in a struggling business.

This could be due to his training in the military that has a place for orderly tactical retreats. He would live to fight another day.

Varied as his career has been, there is a thread that runs through it linking up analytics, consulting, finance, engineering, and marketing to prepare him for his current position.

That common twine is called problem solving.

Sim recognized the opportunity for online shopping sites in Nigeria years ago. A growing middle class, spreading internet usage, online payments system adoption, and other factors made the previously impossible comes within reach of the bold and daring. He took his chance.

This time it clicked.

The company’s record and outlook convinced investors to pump in $25 million in January. Last week, Techcabal.com reported that the company has raised a fresh round of capital estimated at between $40 million to 60 million. The money will be used to beef up its engineering team, improve its mobile applications and user interface experience, expand the retail inventory, and ramp up its logistics and fulfilment infrastructure.

But challenges remain for the industry he plays in.

Sim laments that the local tech start-up scene’s take-off has been stymied by a dearth of technical skill. It is hard to find good engineers conversant with the latest web technologies, and

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when they turn up the have a high rate of turnover quickly going in search of more attractive pay packets. Then there is the difficulty of convincing users to pay for services.

Advertisers retain their focus on print as opposed to online advertising, draining valuable revenues from web entrepreneurs. For online shopping sites like his, the cost of logistics can push operators without deep and long-term capital out of business. Funding is a big obstacle for founders of these companies. There exists no structured funding channels to support these companies. They must rely on friends and family to support them stifling their growth.

Along the roller coaster ride of building Konga to its enviable position, Sim has memorized three simple truths for survival: start lean, watch your expenses carefully, and prioritize wisely. He should have said ‘dream big, but watch the P&L’ if you want to build a successful company.

Follow Sim’s simple steps to success and you stand a good chance of hitting it big. ;

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