Vanguard Markets, September 1, 2014 edition

Vanguard Markets | Monday, September 1, 2014 | Issue 008

JAYWALKER

Soft power, hard facts ! page VM2 P-Square performing in Abidjan, Cote d’Ivoire

ECONOMY

The myth of Nigeria’s endangered middle class

Beyond reach: Shirts on display at the Ermenegildo Zegna store in Lagos.

The company said that its strategy in markets like Nigeria is to target the top 1 per cent of the population, or perhaps even less

ECENTLY, CHIEF Olusegun Obasanjo, a former president, went on record to berate the administration of President Goodluck Jonathan for decimating the country’s middle class.

Addressing a 150-strong delegation of the Nigerian Market/Traders Council he narrated how Nigerians that ought to be well-to-do under normal circumstances are unable to purchase new cars under the prevailing economic situation.

R

He cited the case of a medical practitioner to buttress his point. ‘A friend of mine, Dr. Okoro, a medical doctor, his wife is also a medical doctor and they have a daughter too, who is also a medical doctor.

Between the three of them, they could not afford a new car.

They had to go to Saudi Arabia – in search of greener pasture.’

The case of the three Dr. Okoros was, no doubt, used by the jocular retired general, to illustrate the difficulties faced by many well educated Nigerians unable to pay for

Between 2000 and 2014, Nigeria’s middle class grew by 600 per cent to 4.1 million households or 11 per cent of households in the country — Simon Freemantle, Standard Bank the consumer comforts their peers in developed countries take for granted.

Without question, the Nigerian economy has undergone a series of painful adjustments since the global financial crash 0f 2008. In-

terest rates have gone up, companies have trimmed headcount and slashed hiring rates, new listings on the Nigerian Stock Exchange have petered out to a trickle, and investments in new plants have gone under review.

Yet, it takes a leap of presumption to infer from these that the Nigerian middle class is an endangered species.

On the contrary, the evidence is that Nigeria is weathering the storm. A quick rundown of the facts shows that annual growth rates remain respectable in the middle single digits, the power sector is showing signs of resurrection, and there is growing business confidence that the worst is over. The growth of the middle class, which is just one substract from many other indicators of the country’s economic advance, continues apace. Whether this is solely because of or in spite of the policies of the federal government is another debate altogether.

A week before Obasanjo’s comments, Standard Bank, South African financial services giant trading as Stanbic IBTC in Nigeria, published a report, Understanding Africa’s middle class. It examines the fate of the middle class across 11 sub-Saharan countries - Angola, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, South Sudan, Sudan, Tanzania, Uganda and Zambia - since the wave of economic liberalization and privatization launched at the start of the millennium.

Indirectly, it also interrogates the meaning and correct application of the term middle-class in Africa.

! Page VM3

Inside Spotlight directs its beam at the flaring career of Andrew Alli, CEO, Africa Finance Corporation.

! Page VM6 FOREX RATES

$/N

155.23

155.4 155.3 155.2 155.1 155.0 Fr

Mo

Tu

We

£/N

Th

Fr

257.4179

257.6 257.5 257.4 257.3 257.2 Fr

Mo

Tu

We

Euro/N

Th

Fr

204.7639

206.0 205.5 205.0 204.5 204.0 Fr

Mo

Tu

We

YUAN/RENMINBI

Th

Fr

25.2661

25.28 25.26 25.24 25.22 25.20 Fr

Mo

Tu

We

Th

Currency

Central Rate

SWISS FRANC

169.743

YEN

1.4929

CFA

0.3019

WAUA

234.9074

RIYAL

41.3891

DANISH KRONA

27.4724

SDR

235.6702

Fr

FIXED INCOME & FOREX

FGN Bonds & TBills 840B

FGN Bonds Treasury Bills

11.7

630B

11.3

420B

10.9

210B

10.5

0B

1M 2M

NITTY

3M 6M

9M 12M

10.1 15/08

20/08

25/08

28/08

O/N 1M

NIBOR 15.5

3M 6M

21/08

26/08

29/08

163.0

14.5

162.5

13.5

162.4

12.5

162.1

11.5

161.8

10.5 18/08

Bid Ask

FX ($/N)

161.5 18/08

21/08

26/08

29/08

18/08

21/08

26/08

29/08 Source: FMDQ

vm_issue008.indd 1

02.09.2014 11:04:35

VM2

BUSINESS

VM | Monday, September 1, 2014 | Issue 008

JAYWALKER

Soft power, hard facts

Obiora Onyeaso obiora.onyeaso@customsstreet.com

ARRY MADOWO, a reporter at Kenya’s Daily Nation newspaper, broached a sensitive topic in his column last week.

In a story titled It’s Nigeria, not China, that is slowly colonising us bit.ly/NGR-notCHN he invited Kenyans to look away from Beijing , and towards Africa’s biggest economy as the real coloniser. From entertainment, to literature, to banking, to business, the soft power of Nigerian influence is fast diffusing all across the former British colony.

He admonished his countrymen to be aware that ‘the growing social and cultural influence of Nigeria in Kenya is the natural precursor to full economic domination. Though China is investing millions of yuan in Kenya, it is the colourful folks from Africa’s West coast with their agbadas and distinct accents truly capturing the hearts and minds of Kenyans. It is only a matter of time before the naira gains currency with the population here. The Nigerian colonisation of Kenya is here.’

L

The rise of Nigerian influence across the continent dates back a long time. In the postindependence era, the country played a role in the founding of the Organization of African Unity (the precursor of the African Union). It dedicated significant resources to the liberation struggle in many African states unafraid of the criticism and sanctions it faced in Western capitals.

In the seventies, visionaries like Chief Henry Fajemirokun led the clamour for the creation of the Economic Community of West African States (ECOWAS) to encourage regional integration, and provide easy access for Nigerian businesses and products to neighbouring markets. The roles played by its servicemen in peacekeeping, and graduates in the Technical Aid Corps have earned applause it from other African countries.

Nigeria’s cultural charm offensive begun in the early nineties as Nollywood, its home video industry, churned out titles at a clip that played on themes that Africans everywhere could relate to. The spread of cable TV only served its spread aided by large, established Nigerian communities.

Nollywood movies created a soft spot for Nigeria’s entertainment industry that extended to francophone and lusophone countries. By the time its dancehall youth music scene exploded in the early noughties the rest of Africa was already conditioned to Nigerian voices, style, and its heady mix of idiosyncrasies, which

Naija sound rules Africa. Nigerian talents Flavour, Davido, and Phyno share the stage

It is only a matter of time before the naira gains currency with the population here. The Nigerian colonisation of Kenya is here.

– Larry Madowo, Kenya’s Daily Nation were blatantly glamourized in dance steps, beats, and tunes.

Nigerian music also benefitted from the explosion of the under-30 demographic all over Africa, many of whose constituents identified with the country’s budding stars. The time had come to say roll over makosa, and soukous. Naija sound and swag had come to claim the title.

When former President Obasanjo launched his Afrocentric foreign economic relations agenda, his train always included key economic players.

He did not hide the fact that he

told African leaders to award contracts to these businessmen as repayment for favours and support they enjoyed from Nigeria.

This time it was not the petty Anango (Yoruba) traders hawking plastic articles in Bouaké, Cote d’Ivoire, the hustling Igbo businessmen of Kumasi selling car spare parts, or the long-settled Hausa communities in Mbuji Mayi, Congo that acted as intermediaries to Jewish and Lebanese buyers in the diamond trade. It was the big guns. They had the capital and connections to fly in on

private jets, speak with presidents, and seal deals in the plushest hotel suites. Aliko Dangote, Africa’s richest man, who has invested billions of dollars in different countries is one example.

One group that watched these developments closely were Nigerian banks. Forced to expand during the 2005 consolidation spree, Nigerian banks had been scouting for new opportunities outside its crowded shores. The United Bank for Africa (UBA) hired McKinsey, a global consulting firm, to guide it on the journey of continental expansion.

Before long, Guaranty Trust Bank, and others followed suite. As the banks and dealmakers settled in they took Nigerian software companies, and other service providers to set up their operations. On arrival, they too identified gaps

in the market and moved to fill them. At a June meeting of the Nigeria-South Africa Chamber of Commerce, Osayaba Giwa-Osagie, a chamber director told members that ‘Nigerian companies have a huge appetite for investing outside of Nigeria.’

The penetration of Nigerian’s soft influence is not a perfidious colonisation a la Berlin Conference 1885. It is the natural consequence of opportunity-seeking Nigerians who are successfully exporting culture and capital like every other migrant group has done since the dawn of civilisation. If it wins hearts and minds, creates jobs for their citizens and opens up untapped areas then it should be celebrated.

It behoves governments in countries like Kenya to ensure that Nigerians do not become targets of xenophobic hysteria. The irony is that many African countries enjoy a favourable trade balance with Nigeria, exporting more here that Nigerian does there. Professor Jonathan Moyo, the Zimbabwean minister of Information, Media and Broadcasting Services reminded his countrymen that ‘Nigeria sacrificed for our independence as they participated in a meaningful way. We cannot forget what they did for us simply because we are going through economic hardships.

The observation that they are in critical sectors is not different from the fact that we are wearing clothes produced outside the country.’ Well said minister, well said. ;

ECONOMY

The myth of Nigeria’s endangered middle class W Continued from Page VM1 The bank classifies households with an annual consumption of between $5,500 and $42,000 per annum or between $15 and $115 daily as middle class. Households that consume under $5,500 or below $15 daily are categorised in the low-income band.

Simon Freemantle, a political economist at the bank and the report’s author, found that between 2000 and 2014, Nigeria’s middle class grew by 600 per cent to 4.1 million households or 11 per cent of households in the country. These households spend between $23 and $115 a day. In aggregate, in the eleven countries studied, the middle class has risen by 15 million households over the last 14 years, from less than 5 million in 2000. He predicts that over the next 16 years an additional 14-million households will enter the middle class.

vm_issue008.indd 2

Magic Number: Which middle class are you?

AfDB metric*

Standard Bank metric*

Low income: Less than $2 or N400 per day

Low income: Less than $15 or N2,500 per day

Middle income: $2 to $20 per or N400 t0 N3,400 per day

Middle income: $15 to $115 or N2,500 to N20,000 per day

*Figures are rounded to upper N100.

He is convinced that the ‘Africa rising’ narrative remains credible.

One thing the report did find though is that the actual size of Africa’s middle class is a wide cry from the 300 million figure pushed by the African Development Bank in its influential 2011 report,

The future is bright 80%

New middle class households, 2000-2014(m)

70%

New middle class households, 2014-2030(m)

60% Ng = Nigeria, Ang = Angola, Gh = Ghana, Sud = Sudan, Ken = Kenya, Ug = Uganda, Zam = Zambia, Tz = Tanzania, Eth = Ethiopia

50% 40% 30% 20% 10% 0

Ng

Ang

Gh

Sud

Ken

Moz

Ug

Zam

Tz

Eth

Data visualisation by Publican Media Source: Standard Bank Research

The Middle of the Pyramid: Dynamics of the Middle Class in Africa. The Tunis-based pan-African development bank, had pinned middle class status on individuals earning from $2 to $20 a day. In total, its generous cut-off mark captured 300 million Africans, about one-third of the continent’s population, in this contested class.

Freemantle notes that, in reality, the vast majority of ‘such individuals are exceptionally vulnerable to various economic shocks, and prone to lose their middle-income status.’ Notwithstanding, he is optimistic on the sustained expansion of SSA’s middle class. He forecasts that between 2014 and 2030 ‘an additional 14 million middleclass households will be added across the 11 focal countries – tripling the current number.

Including lower-middle-class households, the overall number would swell to over 40 million households by 2030,

from around 15 million today.’

This goes to confirm the projection shared in the Rapid-growth Market Forecasts report published by Ernst & Young in February. On Nigeria, it said that ‘the number of households earning more than US$10,000 will nearly double from 6 million in 2012 to just over 11 million in 2022.’

The Nigerian middle class has gathered sufficient momentum, and it would take a determined effort to put it in reverse. An inability to purchase a new car in a family of three medical doctors may have more to do with their credit history or an insufficient knowledge of available vehicle financing products and less to do with what the occupant of Aso Rock villa does. As Freemantle rightly noted in his report, ‘Africa has structurally changed, that there has been real improvement in the last 10 years. Not just cyclical, it’s been a real structural change.’ ;

02.09.2014 11:04:38

MARKET DATA

VM | Monday, September 1, 2014 | Issue 008

VM3

TRADING UPDATE Declined Unchanged Advanced

SECTOR PRICE CHANGES - AUG 29, 2014

MARKET REVIEW– AUGUST 25-29, 2014 The performance of the All-Share Index ↓0.08% was tepid last week. The Banking index ↑2.2% led the march to positive territory followed behind by the Oil & Gas index ↑0.45%. The Industrial Index ↓1.51%, Lotus Islamic Index ↓1.39%, and the Consumer Goods Index ↓0.23%, declined by the close of trading on Friday.

In total, 1,341,736,878 shares ↑30% were traded at a value of N16,085,782,687.46 ↑31% last week.

At the head of the advancers were Premier Breweries ↑31.65%, Beta Glass Co. ↑10.17%, Transcorp ↑6.64%, 7-Up ↑5.69%, UBA ↑5.26%, A.G. Leventis ↑5.00%, Guaranty Trust Bank ↑4.80%, Portland Paints ↑4.79%, Red Star Express ↑4.35%, and International Energy Insurance ↑4.00%.

The loss leaders were Vono Products ↓16.00%, Neimeth Int. Pharmaceuticals ↓13.33%, Cadbury ↓10.27%, May & Baker ↓10.13%, Dangote Flour ↓6.67%, Okomu Oil Palm ↓5.40%, Caverton Offshore Support ↓5.00%, Northern Nig. Flour Mills ↓5.00%, Conoil ↓4.97%, and Royal Exchange Assurance ↓4.92%.

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

0 0 0 3 8 0 0 2 0 3 4

3 3 8 22 41 8 11 17 5 5 14

2 2 1 4 11 2 0 2 0 3 2

DASHBOARD Friday Ticker

Close

7UP 139.31 ABCTRANS 0.70 ACCESS 9.90 AGLEVENT 1.47 AIICO 0.80 AIRSERVICE 2.09 ASHAKACEM 33.50 BETAGLAS 19.00 CADBURY 57.55 CAP 39.02 CONOIL 65.01 CONTINSURE 1.00 COURTVILLE 0.55 CUSTODYINS 3.95 CUTIX 1.83 CWG 4.75 DANGCEM 225.00 DANGFLOUR 7.00 DANGSUGAR 8.74 DIAMONDBNK 6.10 ETERNA 3.71 ETI 16.90 FBNH 15.19 FCMB 4.25 FIDELITYBK 1.98 FIDSON 3.33 FLOURMILL 66.66 FO 226.55 FORTISMFB 5.68 GLAXOSMITH 64.80 GUARANTY 29.90 GUINNESS 181.99 HONYFLOUR 4.17 INTBREW 28.00 JBERGER 63.00 LINKASSURE 0.50 MANSARD 2.50 MAYBAKER 1.43 MOBIL 177.00 MRS 57.85 NAHCO 4.94 NASCON 9.80 NB 178.00 NEIMETH 1.09 NEM 0.81 NESTLE 1,026.00 NIGERINS 0.50 NNFM 20.94 OANDO 27.40 OKOMUOIL 34.08 PAINTCOM 1.60 PORTPAINT 5.35 PREMPAINTS 10.39 PRESCO 36.30 PRESTIGE 0.50 PZ 33.25 ROYALEX 0.59 RTBRISCOE 0.87 SEPLAT 690.00 SKYEBANK 2.90 STANBIC 30.00 STERLNBANK 2.26 TOTAL 180.00 TRANSCORP 6.10 UAC-PROP 15.16 UACN 59.00 UBA 7.44 UBCAP 2.24 UBN 8.10 UNILEVER 48.10 UNITYBNK 0.50 VITAFOAM 4.15 WAPCO 117.01 WAPIC 0.79 WEMABANK 0.95 ZENITHBANK 24.60

Change, % 0.22% 1.45% 0.61% 5.76% 0.00% -4.13% 0.90% 0.00% -1.29% -1.94% -4.40% 0.00% 0.00% 1.28% -0.54% -0.01% -2.23% 2.46% 0.83% -4.63% 2.42% 4.83% -0.70% -0.50% 0.00% 2.24% 0.33% 0.00% 2.99% 0.10% -1.63% 0.00% 0.00% -1.62% 0.00% -1.57% 4.38% 0.00% 8.80% -0.20% 0.00% 1.72% -2.68% -1.22% -0.39% 4.96% 4.78% -1.19% 0.00% 4.90% 0.61% 0.00% -5.00% 0.00% -2.25% 2.07% -1.69% 0.00% -4.64% -0.04% 1.67% 0.00% 0.82% 0.00% 0.90% -1.22% -1.64% 0.00% 0.00% -0.84% 5.33% 1.06% -0.61%

5-day Volume 981 530,340 179,273 1,550 15,646 3,402 30,540 219 492 204 3,910 33,750 401 3,432 616 0 1,886 997 16,565 164,480 5,014 193,249 107,102 219,255 7,847 2,593 860 1,901 0 140 226,594 1,345 10,051 1,253 1,252 0 3,005 13,365 223 1,047 4,163 1,890 136,535 1,264 79,927 501 0 23 93,238 2,210 0 8,400 0 2,930 16 2,129 0 4,884 2,712 27,351 7,879 12,782 2,537 807,430 2,976 9,174 57,058 18,546 26,295 50,190 9,769 2,132 1,875 39,362 23,528 110,146

4-Week

Change, Change, Open Week Hi Week Lo Volume Open Volume % % 128.51 139.31 128.11 8.40% 5,325 112.35 24.00% 17,423 0.70 0.73 0.68 0.00% 571,167 0.77 -9.41% 690,323 9.64 10.00 9.53 2.70% 2,714,312 9.98 -0.80% 13,121,208 1.40 1.53 1.39 5.00% 4,341 1.40 5.00% 8,271 0.80 0.83 0.80 0.00% 421,760 0.81 -1.23% 993,267 2.20 2.20 2.07 -5.00% 5,897 2.21 -5.43% 25,803 33.87 34.00 32.00 -1.09% 51,625 33.00 1.52% 229,351 17.96 19.00 17.96 5.79% 24,081 17.11 11.05% 25,855 63.37 63.37 57.55 -9.18% 5,582 70.54 -18.42% 31,791 39.05 39.95 39.00 -0.08% 2,881 40.00 -2.45% 15,573 68.45 71.50 65.01 -5.03% 16,471 61.98 4.89% 126,800 0.98 1.02 0.95 2.04% 158,427 1.12 -10.71% 3,256,496 0.57 0.57 0.55 -3.51% 20,872 0.51 7.84% 90,025 3.86 3.95 3.75 2.33% 15,473 4.00 -1.25% 358,804 1.90 1.99 1.81 -3.68% 5,624 1.99 -8.04% 69,435 4.80 5.00 4.75 -1.04% 48 4.75 0.00% 1,003 229.97 229.97 225.00 -2.16% 9,545 224.10 0.40% 63,330 7.50 7.50 7.00 -6.67% 338,373 7.55 -7.28% 367,900 8.70 8.85 8.44 0.46% 57,775 9.01 -3.00% 519,201 6.20 6.25 6.03 -1.61% 338,345 6.35 -3.94% 2,005,144 3.88 3.90 3.70 -4.38% 21,002 3.80 -2.37% 163,816 16.50 16.90 16.20 2.42% 226,240 16.87 0.18% 991,171 14.61 15.20 13.99 3.97% 508,909 14.40 5.49% 2,374,397 4.30 4.33 4.16 -1.16% 349,045 4.23 0.47% 1,612,700 1.97 2.01 1.96 0.51% 76,141 2.01 -1.49% 1,481,917 3.33 3.35 3.18 0.00% 144,016 3.00 11.00% 349,142 66.69 69.50 64.71 -0.04% 4,055 70.61 -5.59% 93,096 230.00 238.00 205.00 -1.50% 19,624 228.90 -1.03% 65,977 5.68 5.68 5.68 0.00% 2 6.00 -5.33% 260,973 63.57 64.80 62.92 1.93% 3,359 65.85 -1.59% 11,068 28.52 30.98 28.06 4.84% 628,521 28.61 4.51% 2,160,889 189.90 189.90 181.99 -4.17% 4,728 190.10 -4.27% 36,744 4.15 4.18 4.05 0.48% 40,344 4.18 -0.24% 284,251 26.60 28.20 26.51 5.26% 17,882 26.10 7.28% 76,191 65.00 65.00 62.75 -3.08% 1,961 63.39 -0.62% 15,016 0.50 0.50 0.50 0.00% 30 0.50 0.00% 306 2.48 2.61 2.48 0.81% 203,721 2.55 -1.96% 267,808 1.60 1.60 1.33 -10.63% 38,600 1.64 -12.80% 69,937 175.75 177.00 174.00 0.71% 5,328 160.22 10.47% 38,763 58.49 58.90 53.17 -1.09% 6,893 58.90 -1.78% 24,246 5.00 5.05 4.90 -1.20% 50,339 4.95 -0.20% 221,104 10.00 10.19 9.50 -2.00% 75,625 10.12 -3.16% 259,682 175.52 179.00 171.17 1.41% 165,652 185.00 -3.78% 408,969 1.20 1.23 1.04 -9.17% 17,400 1.18 -7.63% 62,728 0.81 0.82 0.80 0.00% 361,262 0.76 6.58% 1,111,523 1,065.00 1,065.00 1,026.00 -3.66% 2,215 1,105.10 -7.16% 604,604 0.50 0.50 0.50 0.00% 1,635 0.50 0.00% 27,488 21.00 21.00 19.95 -0.29% 7,899 18.77 11.56% 36,154 26.45 27.45 25.01 3.59% 310,223 27.00 1.48% 1,029,405 34.85 34.85 33.51 -2.21% 18,298 33.76 0.95% 77,559 1.60 1.68 1.55 0.00% 40,804 1.54 3.90% 49,429 5.01 5.35 5.00 6.79% 18,830 5.75 -6.96% 50,447 10.39 10.39 10.39 0.00% 0 10.39 0.00% 113 36.21 36.33 36.04 0.25% 10,751 36.83 -1.44% 34,413 0.50 0.50 0.50 0.00% 426 0.53 -5.66% 118,394 35.14 36.00 33.25 -5.38% 14,322 38.00 -12.50% 73,408 0.59 0.64 0.57 0.00% 68,156 0.52 13.46% 202,891 0.90 0.92 0.86 -3.33% 14,195 1.04 -16.35% 76,575 690.00 700.00 675.00 0.00% 3,568 643.00 7.31% 16,779 2.95 2.99 2.88 -1.69% 130,203 3.01 -3.65% 991,002 29.44 30.00 29.25 1.90% 27,503 31.00 -3.23% 243,499 2.28 2.45 2.20 -0.88% 725,663 2.30 -1.74% 1,383,857 182.05 182.05 180.00 -1.13% 4,701 172.00 4.65% 9,767 5.72 6.15 5.60 6.64% 1,800,326 5.51 10.71% 4,753,128 16.15 17.00 15.02 -6.13% 13,948 16.61 -8.73% 61,726 58.87 59.90 57.05 0.22% 57,924 60.02 -1.70% 165,722 7.21 7.60 7.10 3.19% 242,522 7.49 -0.67% 2,100,074 2.17 2.25 2.15 3.23% 108,691 2.08 7.69% 633,224 8.17 8.20 8.00 -0.86% 36,992 8.45 -4.14% 158,316 48.99 49.00 48.01 -1.82% 65,709 49.25 -2.34% 119,591 0.50 0.50 0.50 0.00% 459,871 0.50 0.00% 1,386,479 4.15 4.15 4.05 0.00% 11,837 4.33 -4.16% 55,153 119.00 120.00 117.01 -1.67% 25,965 120.00 -2.49% 122,004 0.76 0.80 0.74 3.95% 163,904 0.88 -10.23% 634,815 0.95 0.98 0.91 0.00% 139,944 1.01 -5.94% 366,681 24.51 24.90 24.10 0.37% 295,634 25.05 -1.80% 2,521,936

5-Week trading1

52-Week price range Low 64.80 0.65 7.22 1.25 0.74 2.00 13.87 10.69 57.55 35.96 25.92 0.93 0.50 1.30 1.59 4.75 185.00 7.00 8.44 5.86 2.48 12.40 11.50 3.01 1.85 1.80 58.10 35.00 5.15 58.50 22.67 162.00 2.56 17.98 59.18 0.50 1.95 1.33 102.00 32.53 4.56 9.50 140.00 0.79 0.55 920.26 0.50 18.00 9.32 32.15 1.33 4.00 9.84 32.00 0.50 30.08 0.50 0.84 590.00 2.88 16.23 2.09 146.26 1.28 12.00 42.58 6.65 1.22 8.00 42.50 0.50 3.66 87.50 0.66 0.89 19.30

Close ( )

High

YtD

139.31 95.03% 0.97 -10.46% 10.91 3.13% 1.87 -9.82% 1.00 -13.04% 4.23 -37.61% 34.20 53.11% 22.10 31.67% 110.00 -40.78% 51.66 -18.67% 79.80 6.02% 1.33 -16.67% 0.89 -15.38% 4.11 81.19% 2.27 -6.15% 5.83 -18.52% 250.02 4.09% 10.76 -31.57% 12.49 -22.65% 8.20 -18.67% 5.73 -21.56% 18.60 3.11% 17.29 -6.81% 4.59 10.68% 2.95 -26.67% 3.35 21.09% 83.64 -18.53% 259.94 143.94% 6.66 -9.41% 74.97 -7.43% 31.80 7.75% 266.70 -22.89% 4.50 8.31% 31.50 -1.13% 76.45 -0.12% 0.50 0.00% 2.73 0.00% 2.64 -43.92% 182.00 52.59% 70.00 11.85% 6.80 -22.20% 15.10 -34.01% 189.00 7.87% 2.08 -0.91% 0.97 0.00% 1,250.01 -13.20% 0.54 0.00% 26.50 -4.86% 36.89 2.51% 48.05 -23.98% 2.30 -17.95% 6.25 1.90% 10.39 0.00% 49.00 -6.92% 0.81 -20.63% 42.29 -10.13% 0.69 9.26% 1.49 -38.30% 735.00 14.09% 4.67 -35.70% 31.50 34.29% 2.74 -9.60% 195.50 3.87% 6.15 40.55% 21.31 -1.40% 67.85 5.37% 9.60 -18.69% 3.04 -1.32% 11.00 -15.71% 64.00 -9.25% 0.72 0.00% 5.70 -13.72% 136.73 1.75% 1.48 -30.09% 1.40 -25.78% 27.40 -1.60%

PE

EPS

30.05 3.24 6.30 6.53 5.26 4.18 41.88 5.58 38.12 23.32 19.49 6.25 5.18 16.33 9.68

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

19.07

11.80

10.79 3.69 6.10 4.61 6.96 4.83 2.91 13.88 20.15 49.43 4.59 22.01 9.15 23.48 12.27 44.42 9.64 12.57 16.35 15.78 16.76 53.81 15.24 9.71 33.80

0.81 1.65 0.61 3.67 2.16 0.88 0.68 0.24 3.38 4.63 1.18 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

0.41 37.47 25.00

1.96 28.82 0.02

24.62 15.07 4.57 8.77 4.33 1.99 26.12 5.79

1.11 2.29 0.35 0.60 0.00 8.38 0.25 1.34 0.10

3.46 15.61 3.59 13.94 69.52 7.09 27.54 4.47 7.59 43.33 35.43 4.65 5.84 14.44 11.29

0.84 1.92 0.63 12.91 0.09 2.20 2.14 1.70 0.29 0.19 1.37 0.11 0.71 8.10 0.07

7.11

3.46

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

vm_issue008.indd 3

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.

02.09.2014 11:04:56

Page 7

VM4

MARKET DATA

VM | Monday, September 1, 2014 | Issue 008

MARKET SNAPSHOT 3-MONTH PRICE TREND OF BELLWETHER STOCKS

ACCESS

9.90 0.26

7.22

PE 6.30

10.91 0.30 3.13%

YtD

3M

-0.15 -1.49%

0.26 2.70%

1W

25/08

May

June

July

CONTINSURE 0.93 YtD

-0.20 -16.67%

3M

1.00 0.02 -0.05 -4.76%

PE 6.25 0.02 2.04%

1W

25/08

May

June

July

FCMB YtD

PE 4.83

4.59 0.41 10.68%

3M

-0.05 -1.16%

-0.05 -1.16%

1W

25/08

May

June

July

GUARANTY YtD

PE 9.15

31.80 2.15 7.75%

3M

-0.02 -0.07%

1.38 4.84%

1W

25/08

May

June

July

MANSARD YtD

PE 16.35

2.73 0.00 0.00%

3M

0.06 2.46%

0.02 0.81%

1W

25/08

May

June

July

OANDO YtD

PE 24.62

36.89 0.67 2.51%

3M

9.13 49.97%

0.95 3.59%

1W

25/08

May

June

July

STANBIC YtD

PE 15.61

31.50 7.66 34.29%

3M

6.06 25.31%

1W

25/08

May

June

July

UBA

PE 4.47

9.60 -1.71 -18.69%

3M

-0.26 -3.38%

1W

0.23 3.19%

-0.37 -1.09%

25/08

May

June

July

DANGCEM

225.00 4.97

185.00 YtD

250.02 8.84 4.09%

3M

-9.00 -3.85%

PE 19.08 -4.97 -2.16%

1W

25/08

May

June

July

FIDELITYBK 1.85 YtD

-0.72 -26.67%

1.98 0.01

3M

-0.12 -5.71%

PE 2.91 0.01 0.51%

1W

25/08

May

June

July

GUINNESS YtD

266.70 -54.02 -22.89%

3M

2.00 1.11%

PE 23.48 -7.91 -4.17%

1W

25/08

May

June

July

MOBIL YtD

182.00 61.00 52.59%

3M

52.00 41.60%

PE 16.76 1.25 0.71%

1W

25/08

May

June

July

OKOMUOIL YtD

PE 15.07

48.05 -10.75 -23.98%

3M

0.89 2.68%

-0.77 -2.21%

1W

25/08

May

June

July

TOTAL YtD

195.50 6.70 3.87%

3M

13.95 8.40%

PE 13.94 -2.05 -1.13%

1W

25/08

May

June

July

UNILEVER YtD

PE 35.43

64.00 -4.90 -9.25%

3M

-0.91 -1.86%

1W

-0.89 -1.82%

PE 38.12 -5.82 -9.18%

1W

25/08

May

June

July

DIAMONDBNK 5.86 YtD

6.10 0.10 PE 3.69

8.20 -1.40 -18.67%

3M

-0.60 -8.96%

-0.10 -1.61%

1W

25/08

May

June

July

FLOURMILL 58.10 YtD

-15.16 -18.53%

66.66 0.03

3M

-3.02 -4.34%

PE 20.15 -0.03 -0.04%

1W

25/08

May

June

July

HONYFLOUR 2.56 0.32 8.31%

YtD

3M

4.17 0.02 0.17 4.25%

PE 12.27 0.02 0.48%

1W

25/08

May

June

July

NASCON YtD

PE 9.71

15.10 -5.05 -34.01%

3M

-3.18 -24.50%

-0.20 -2.00%

1W

25/08

May

June

July

PRESCO YtD

PE 4.33

49.00 -2.70 -6.92%

3M

-0.20 -0.55%

0.09 0.25%

1W

25/08

May

June

July

UACN YtD

PE 27.54

67.85 3.01 5.37%

3M

-3.77 -6.01%

0.13 0.22%

1W

25/08

May

June

July

WAPCO YtD

136.73 2.01 1.75%

3M

4.51 4.01%

PE 14.44

1W

-1.99 -1.67%

-0.03 -0.08%

1W

25/08

May

June

July

ETI

16.90 0.40

12.40 YtD

PE 4.61

18.60 0.51 3.11%

3M

0.10 0.60%

0.40 2.42%

1W

25/08

May

June

July

FO YtD

259.94 133.68 143.94%

3M

12.67 5.92%

PE 49.43 -3.45 -1.50%

1W

25/08

May

June

July

INTBREW YtD

PE 44.43

31.50 -0.32 -1.13%

3M

2.00 7.69%

1.40 5.26%

1W

25/08

May

June

July

NB YtD

189.00 12.99 7.87%

3M

1.91 1.08%

PE 33.80 2.48 1.41%

1W

25/08

May

June

July

PZ YtD

PE 26.12

42.29 -3.75 -10.13%

3M

-3.10 -8.53%

1W

25/08

May

June

July

PE 7.09

21.31 3M

-2.84 -15.78%

1W

25/08

May

June

July

ZENITHBANK 19.30 YtD

3M

-0.99 -6.13%

29/08

August M T W T F

24.60 0.09 PE 7.11

27.40 -0.40 -1.60%

29/08

August M T W T F

15.16 0.99

12.00 YtD

-1.89 -5.38%

June

July

FBNH

15.19 0.58

11.50 YtD

25/08

vm_issue008.indd 4

July

29/08

August M T W T F

25/08

May

June

July

29/08

August M T W T F

25/08

May

June

July

29/08

August M T W T F

-0.80 -3.15%

1W

25/08

May

June

29/08

August M T W T F

PE 6.97

17.29 -1.11 ??-6.81% ??

-0.11 -0.72%

3M

0.58 3.97%

1W

25/08

May

June

July

GLAXOSMITH

64.80 1.23

58.50 YtD

PE 22.01

74.97 -5.20 -7.43%

-3.40 -4.99%

3M

29/08

August M T W T F

1.23 1.93%

1W

25/08

May

June

July

JBERGER

63.00 2.00

59.18 YtD

PE 9.64

76.45 -0.07 -0.12%

29/08

August M T W T F

-7.00 -10.00%

3M

-2.00 -3.08%

1W

25/08

May

June

July

NESTLE

1026.00 39.00

920.26 YtD

1250.01 -156.00 -13.20%

29/08

August M T W T F

-46.00 -4.29%

3M

PE 37.47 -39.00 -3.66%

1W

25/08

May

June

July

SEPLAT

690.00 0.00

590.00 YtD

29/08

August M T W T F

PE --

735.00 85.20 14.09%

24.00 3.60%

3M

0.00 0.00%

1W

25/08

May

June

July

29/08

August M T W T F

0.09 0.37%

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

3

4

19.23 1YtD

5

25.23 0.018

July

29/08

August M T 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

June

-0.30 -2.05%

25/08

May

9

May

PE 12.77

1W

LEGEND

UAC-PROP -0.22 -1.40%

4.22 41.82%

3M

29/08

August M T W T F

33.25 1.89

30.08

2.32 19.35%

29/08

August M T W T F

178.00 2.48

140.00

YtD

15.98

29/08

August M T W T F

28.00 1.40

17.98

14.31 0.30

8.00

29/08

August M T W T F

226.55 3.45

35.00

CCNN

29/08

August M T W T F

29/08

August M T W T F

117.01 1.99

87.50

1.52 4.05%

29/08

August M T W T F

59.00 0.13

42.58

3M

29/08

August M T W T F

36.30 0.09

32.00

-8.96 -18.67%

29/08

August M T W T F

9.80 0.20

9.50

YtD

PE 23.33

51.66

29/08

August M T W T F

4.50

39.02 0.03

35.96

29/08

August M T W T F

83.64

CAP

29/08

August M T W T F

29/08

August M T W T F

48.10 0.89

42.50

-20.25 -26.03%

29/08

August M T W T F

180.00 2.05

146.26

3M

29/08

August M T W T F

34.08 0.77

32.15

-39.63 -40.78%

29/08

August M T W T F

177.00 1.25

102.00

YtD

110.00

29/08

August M T W T F

181.99 7.91

162.00

57.55 5.82

57.55

29/08

August M T W T F

2.95

CADBURY

29/08

August M T W T F

29/08

August M T W T F

7.44 0.23

6.65 YtD

0.56 1.90%

PE 41.88

1W

29/08

August M T W T F

30.00 0.56

16.23

11.03 49.09%

29/08

August M T W T F

27.40 0.95

9.32

3M

29/08

August M T W T F

2.50 0.02

1.95

11.62 53.11%

29/08

August M T W T F

29.90 1.38

22.67

YtD

33.50 0.37 34.20

29/08

August M T W T F

4.25 0.05

3.01

13.87

29/08

August M T W T F

1.33

ASHAKACEM

11 14

13 May

21/07

June

July

25/07

M T W T

F

02.09.2014 11:05:08

MARKET DATA

VM | Monday, September 1, 2014 | Issue 008

VM5

MARKET SNAPSHOT +150% SLIPPING +140%

LEADING

12

Bubble size = Market Cap

+130% +120% +110%

YEAR-TO-DATE RETURN

+100%

# TICKER

WTD

YTD

1 DANGCEM

-2.16

4.09

2 NB

1.41

7.87

3 GUARANTY

4.84

7.75

4 NESTLE

-3.66 -13.20

5 ZENITHBANK

0.37

-1.60

6 FBNH

3.97

-6.81

+90%

7 WAPCO

-1.67

1.75

+80%

8 STANBIC

1.90 34.29

9 GUINNESS

-4.17 -22.89

10 ETI

2.42

11 UBA

3.19 -18.69

12 FO

-1.50 143.94

13 OANDO

3.59

14 TRANSCORP

6.64 40.55

15 ACCESS

2.70

16 UNILEVER

-1.82 -9.25

17 FLOURMILL

-0.04 -18.53

18 UBN

-0.86 -15.71

19 PZ

-5.38 -10.13

24

+70% +60% 28

+50%

29

+40%

14 8

+30% +20% +10%

26

34

0%

1

27

39

-10%

19

5 36

33

25

9

20

31

16

4

-20%

7

2

18

-30%

15

13

23 6

30

17 38 22 32

37

10

3

11

35

-40%

21

40

-50% LAGGING -15%

-10%

-5%

0%

IMPROVING 10%

5%

WEEK-TO-DATE RETURN

Indices

YtD, %

ASI

-0.08% 0.42%

NSE30

0.28% 0.50%

NSEBNK

2.20% 0.29%

NSEINS

0.26% -0.02%

NSECNSMRGDS

-0.23% 0.41%

WtD, %

TRADING BREAKDOWN

BY SECTOR

DtD, %

Sector 0.49%

-0.87%

%

Financial Services

65 \ 77

Conglomerates

14 \ 8

Consumer Goods

6\5

Others

16 \ 10

-4.28%

FGN Bond Index 3010

-5.44%

-6.58%

0.45%

NSEOILGAS 2.05%

41.37%

-1.39%

NSELOTUSISLM -0.09%

-4.8%

-1.51%

NSEINDUSTR -0.23%

14.4

Market Value YTD Return

3005

14.1

3000

13.8

2995

13.5

5.21%

-7%

-4%

-2%

0%

2%

4%

2990 13.2 25/08 27/08 29/08

6%

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 -0.75 2.00% Eurozone 0.15% 05.06.2014 -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 Value

Traded Stocks

Declined Stocks

Unchanged Stocks

All Shares Index Value

1

25.08.2014

3,958

156,692,619

1,491,537,874.39

130 \ 114

21 \ 21

24 \ 27

85 \ 66

41,339.48

2

26.08.2014

4,524

178,411,748

2,027,633,954.05

114 \ 121

19 \ 22

33 \ 29

62 \ 70

41,235.25

3

27.08.2014

4,795

387,602,388

3,936,891,416.01

110 \ 112

16 \ 17

27 \ 25

67 \ 70

41,121.12

4

28.08.2014

4,617

263,106,346

2,497,065,948.07

118 \ 109

31 \ 26

20 \ 26

67 \ 57

41,359.87

5

29.08.2014

4,587

355,923,777

6,132,653,494.94

106 \ 116

29 \ 24

19 \ 27

58 \ 65

41,532.31

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.

0.22

-9.18 -40.78

22 DANGSUGAR

0.46 -22.65

23 INTBREW

5.26

24 7UP

8.40 95.03

25 DIAMONDBNK

-1.61 -18.67

26 FCMB

-1.16 10.68

27 JBERGER

-3.08 -0.12

28 ASHAKACEM

-1.09 53.11

29 MOBIL

0.71 52.59

30 GLAXOSMITH

1.93

-7.43

31 TOTAL

-1.13

3.87

32 FIDELITYBK

0.51 -26.67

33 STERLNBANK

-0.88 -9.60

34 CONOIL

-5.03

35 SKYEBANK

-1.69 -35.70

36 PRESCO

0.25

37 OKOMUOIL

-2.21 -23.98

38 CAP

-0.08 -18.67

39 NEIMETH

-9.17 -0.91

40 MAYBAKER

-10.63 -43.92

NSEASI

Index

Week Opening

Week Close

Change

WtD

MtD

QtD

YtD

1

All Shares Index

41,564.19

41,532.31

-31.88

-0.08

-1.34

-2.24

0.49

2

NSE 30 Index

1,885.26

1,890.50

5.24

0.28

-1.61

-2.14

-0.87

3

NSE Banking Index

419.45

428.67

9.22

2.2

-1.1

-0.97

-4.28

4

NSE Insurance Index

144.18

144.56

0.38

0.26

-2.18

-1.55

-5.44

5

NSE Consumer Goods Index

1,030.20

1,027.86

-2.34

-0.23

-2.85

-2.87

-6.58

6

NSE Oil/Gas Index

478.34

480.48

2.14

0.45

2.27

2.61

41.37

7

NSE Lotus Islamic Index

2,764.01

2,725.59

-38.42

-1.39

-2.62

-5.19

-4.8

8

NSE Industrial Index

2,720.52

2,679.33

-41.19

-1.51

-1.25

0.47

5.21

vm_issue008.indd 5

5.37

41,532.31

-1.13

6.02

-6.92

41,60 41,45 41,30 41,15 41,00 Mo

Tu

S&P 500

We

Th

Fr

2,003.36

2,005 2,000 1,995 1,990 1,985 Fr

Mo

Tu

FTSE 100

INDEX PERFORMANCE

3.13

21 CADBURY

Fr Advanced Stocks

2.51

20 UACN

MARKET SNAPSHOT Turnover Volume

3.11

We

Th

Fr

6,819.75

6,835 6,820 6,805 6,790 6,775 Th

Fr

Tu

JSE FTSE

We

Th

Fr

50,959.02

51,78 51,56 51,34 51,12 50,90 Fr

Mo

Tu

We

Th

Fr

02.09.2014 11:05:09

VM6

ARENA

VM | Monday, September 1, 2014 | Issue 008

ART AS AN ALTERNATIVE INVESTMENT

Artist Dossier: Irma Stern

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

N CONTINUATION I of our analyses of well-recognized Nigerian and African artists, this week, we will examine the life of widely acknowledged South African painter, Irma Stern. We will also review her impressive auction results from international auction house, Bonhams.

Irma Stern is unarguably a pivotal figure in narratives of modern art in Africa. She was born in 1894 in Schweizer-Reneke, Transvaal, in South Africa. She studied in Weimar and Berlin, Germa-

ny winning several awards in her long and illustrious career including the Prix d’Honneur at the Bordeaux International exhibition (1927), the Peggy Guggenheim international art prize (1960), and the Oppenheimer award on Art in South Africa in 1963. She was also awarded a medal of honour for her paintings by the SuidAfrikanse Akademie vir Wetenskap en Kuns (1965).

Stern’s oeuvre embraces several themes from exotic

figures, to portraits, lush landscapes and still lifes conveyed in different media, ranging from oils and water colours to gouache and charcoal. She died in 1966, and a posthumous exhibition was held in her honor at the Grosvenor Gallery in London in 1967. Art historian, Hayden Proud observes, ‘Many of Stern’s paintings of people from other cultures are concerned primarily with the culture rather than the individual. The essence of

TOP 5 SALES AT BONHAMS AUCTIONS OF SOUTH AFRICAN ART Work Details

Date Sold

1

Arab Priest, 1945 Oil on canvas 97 x 86cm

Mar 23, 2011 Sold for £3.04 The South African million incl. premium Sale (N764.01 million)

2

Bahora Girl, 1945 Oil on canvas 87 x 71cm

Oct 27, 2010 Sold for £2.37 The South African million incl. premium Sale (N555.73 million)

3

Seated Nude with Oranges, 1934 Oil on composition board 88 x 83cm

Mar 23, 2011 Sold for £1.7 The South African million incl. premium Sale London (N426.68 million)

4

The Malay Bride, 194[2] Oil on canvas 69 x 51cm

Oct 2, 2013 Sold for £1.2 The South African million incl. premium Sale (N312.23 million)

Watussi Woman, 1942 Oil on canvas 85.5 x 85.5cm

Oct 26, 2011 Sold for £1.16 The South African million incl. premium Sale: Part II (N291.46 million)

5

Amount

the person studied becomes a generalization for the society because, although the painting is created from contact with particular models, Stern interprets according to a mental construct about the culture of origin. Thus many of her portraits are ambivalent, presenting both stereotypical and individual characteristics.’

One of her paintings, The Malay Bride, sold for £1.2 million (N312.2 million including premium) at Bonhams The South African Sale in October 2013. This is a fine example of Stern’s output from the 1940s and is considered one of her most accomplished paintings. Typical of her work created during this period, the subjects are imbued with a refined serenity and appear isolated. The artist’s fascination with Islam and the splendor of Muslim women in their finery and adornment developed from her exposure to the Cape Malay culture. This enchantment grew with her two trips to Zanzibar in 1945.

Irma Stern is still considered by many to be South Africa’s foremost artist and

‘Bahora girl’ signed and dated ‘Irma Stern/1945’ (upper left) oil on canvas 87 x 71cm (34 1/4 x 27 15/16in)

her works continue to fetch record prices at international auctions.

Her top 5 sales at Bonhams auctions of South African art are listed in the table. ;

SPOTLIGHT

Andrew Alli, CEO, Africa Finance Corporation

Andrew Alli

OW DOES ANYone tie up a career that begins with engineering, whizzes past accounting, makes a detour in investment banking, taxis to a stop in international finance, zooms off again in private equity, and finally hovers above deal-making at the highest level? Well, ask Andrew Alli, the pioneer chief executive of Africa Finance Corporation. He has made more career changes that de-

H

mand completely new skill sets than most people have changed office desks working in a single company. This is not to say that he is hasty in accepting new challenges.

The soft-spoken financial diplomat who picks his words carefully may have found his calling at his current perch.

AFC is a multilateral organization established by treaty in 2007 to catalyse investment in infrastructure and heavy industries across the continent. Unlike similar past initiatives, its founders decided on a private sector mindset to portfolio selection. Alli says as much: ‘no matter how much of a positive impact a commercial operation may provide, if it goes out of business in a few years’ time, then its developmental impact is actually zero, or could even be negative.’ This philosophical long-term approach to development financing was probably sown when he moved

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One thread that runs through his entire career is a determination to deliver social benefits in a way that is profitable for sponsors, and sustainable for communities. to school in England in 1983 due to political upheaval in Nigeria. He said that the teaching method at Friends’ School in Saffron Walden, where he attended, struck him for the teachers’ encouragement of question-anddialogue as opposed to rote learning and unquestioned instruction back home.

One thread that runs through his entire career is a determination to deliver social benefits in a way that is profitable for sponsors, and sustainable for communities.

His late father, the revered Ambrose Alli, served as governor of the old Bendel State during the Second Republic. During his administra-

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tion, he established over one thousand secondary schools, four teacher training colleges, the present Delta State University in Abraka, three polytechnics, and, of course, the posthumously named Ambrose Alli University, Nigeria’s first non-federal university.

A 1995 engineering graduate of Kings College, London, Alli also holds an MBA from INSEAD, Fontainebleau in France. Early in his career he had stints at Coopers & Lybrand, an accounting firm, and SG Warburg, an investment bank. Of his time at business school he once confessed that though he has grown rusty in his ability to

‘calculate the price of an option off the top of my head as I could have done at the end of my MBA, but rather like learning to read, the MBA provided me with a skill set and experience that continues to serve, and I imagine will do so for the rest of my life.’ After a successful career at the International Finance Corporation, he went on to found Travant Capital, a PE firm, with his friend, the late wunderkind Osazee Osifo.

AFC was his next call.

Alli is perennially on the lookout for projects with bankable prospects. He bemoans the paucity of bankable projects on the continent. In his words, AFC’s mandate is to help project sponsors to fill the gaps in expertise, experience, and capital that they lack till it attains a level of bankability that would attract later-stage backers. So far, it has undertaken over $1.2 billion in investments across Africa. Two

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notable financings include Main One fibre optic cable, which increased cable capacity by a factor of 10 for faster, wider, cheaper internet access in West Africa, and coarranging debt financing for the acquisition of the Ughelli Power Plant last year.

With an enviable rolodex that spans Cairo to Cape Town from his days at IFC it is hard to think that much of value would escape him. But the old accountant in him is ever cautious. Hear him: ‘Operating in emerging markets you face different types of risk. Being able to identify those risks and structure an investment in a way that can handle them is important.

There is no secret to doing that, unfortunately. It just involves a lot of hard work to understand the business and the environment that business is operating in and then to piece out the different risk factors and how you can deal with them.’ ;

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02.09.2014 11:05:11