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Microsoft loses title of world’s most valuable listed company to Amazon

Amazon has eclipsed Microsoft as the world’s most valuable listed company as volatile markets reshuffle Wall Street’s pecking order.

The change happened on Monday as shares in the online retail giant rose 3%, lifting its market value to $797m (£624.3m).

Microsoft also rose, but by less than 1%, leaving its value at $784bn (£614m).

It is the first time that Amazon – founded by Jeff Bezos in 1994 – has held the top spot and ends Microsoft’s brief return to the number one position after it surpassed Apple late in November.

Apple share prices have been under pressure amid fears that Donald Trump’s trade war with China will hold back economic growth.

Technology stocks and other industries that generate a substantial chunk of revenues outside the US are among those that have been badly affected by the market volatility.

Amazon, despite climbing ahead of Microsoft, is worth a fifth less than in September when its value peaked at more than $1tn.

Customers walk past an Apple logo inside of an Apple store at Grand Central Station in New York

Apple’s reign as the most valuable listed company ended back in November
Apple was worth even more at the time but its stock has plunged by 37% since mid-October, shaving $400bn (£313bn) off its valuation.

The iPhone maker confirmed some of investors’ worst fears last week when it warned it would miss its quarterly revenue target, largely blaming a slowdown in China amid its trade war with the US.

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Coronation Research releases Nigeria’s 2018 Q4 GDP

Q4 2018 GDP was reported today at +2.38% y/y versus the Bloomberg consensus estimate of +2.10% y/y. Non-oil growth was a respectable +2.70% y/y and has accelerated over the past four quarters. See page 2.

FY 2018 GDP was +1.93% y/y, compared with +1.76% y/y for 9M 2018 and +0.82% y/y for 2017. The World Bank’s revised estimate for 2018 was +1.90% y/y.

While below trend, growth is on a gentle upward slope. We forecast +2.25% y/y growth for 2019.

Positive implications for equities. Lack of loan growth was the bugbear for listed banks in 2018: more growth, particularly in the Telecoms and Manufacturing sectors, may point to renewed loan demand in 2019, though the large Trade sector (up by just 1.02% y/y) remains essentially weak. Segmental data for construction, +2.05% y/y, bodes well for the cement industry.

Mildly positive for market interest rates. As we argue in Coronation Research, Year Ahead 2019, A tale of two halves, 15 January, market interest rates support foreign portfolio investment, but may be cut in Q4 or even Q3 2019 if inflation moderates. We are already seeing some read-though in 10-year bond yields.

Mildly positive for inflation. The Agriculture segment (26% of GDP) showed improved growth (+2.46% y/y) and to the extent that this reflects improved production, we expect inflationary pressure to moderate towards mid-year, if momentum is sustained.

Nigeria, y/y GDP growth

Non-oil & gas GDP

Robust performance in Non-oil GDP

Non-oil GDP accelerated throughout 2018, growing steadily from +0.76% y/y in Q1 18 to +2.70% y/y in Q4 18. We see a pattern emerging as the economy emerged from recession. Whereas GDP was reliant on its oil component to stimulate growth for much of the past, and therefore highly susceptible to volatility in the prices and production, non-oil GDP has become more resilient to such shocks. The Q3 2017 0.76% y/y decline in non-oil GDP now reads as an isolated event post-recession.

This resilience is even more impressive given that Agriculture is not growing as quickly as it did in 2016 and 2017, while Trade and Manufacturing have performed inconsistently. We expect Agriculture to post a very gradual recovery to its trend growth rate of 3%.

Nigeria’s GDP growth y/y, with and without oil & gas

Source: National Bureau of Statistics (NBS), Coronation Research *Q3 16 non-oil GDP was positive at 0.03% y/y.

More recently Telecoms has been the main driver of growth in non-oil GDP. The sector grew 11.33% y/y for FY 2018. it is easily the best performing sector of the top six contributors to GDP well above Agriculture which grew by 2.12% y/y for FY 2018.

On the other hand, Oil & Gas GDP has underperformed in 2018, following one quarter of positive growth (Q1 2018, 14.77% y/y) with three consecutive quarters of year-on-year decline. The volatility of Oil and Gas itself is not surprising – in the last eight years it has recorded growth rates between +24.21% y/y and -23.04% y/y.

GDP Breakdown

Breakdown among the major segments

The top six sectors accounted for 74.10% of the Nigerian economy in Q4 2018, down 406bps from their collective contribution in Q3 2018. In order of size they were Agriculture, Trade, Telecoms, Manufacturing, Oil and Gas, and Real Estate.

In Q4 2018 Agriculture (25.83% of GDP) grew by 2.46% y/y. Trade (16.29% of GDP) grew by 1.02% y/y. Telecoms (9.73% of GDP) grew by 16.67% y/y. Manufacturing (8.75% of GDP) grew by 2.35% y/y. Oil & Gas (6.97% of GDP) contracted by 1.62% y/y. And Real Estate (6.52% of GDP) fell by 3.85% y/y.

Therefore, of the six largest sectors, four grew and two contracted. Agriculture sustained its upward track towards trend growth of 3%, indicating, a slowdown in core inflation is likely in the medium term. Manufacturing performance and PMI data are now showing signs of convergence after a period of disconnect. Telecoms consolidated it status as a core stimulant for non-oil GDP growth having reported double-digit growth over the last three quarters. Oil & Gas recorded a third consecutive quarter of year-on-year decline period post-Q1 17, mirroring the global trend in oil prices. Trading was up for two consecutive quarters. Real Estate remained in a sticky decline, with no clear pattern emerging in its development.

Nigeria GDP, y/y growth in key sectors

The growth in Agriculture remains at just below its 3% long term trend. At 26% of GDP, its provides a defense against the steep volatility that characterizes the Oil & Gas component.

Trade remains weak but positive

While a small percentage of consumers assess short-term unsecured credit for current consumption, most consumers fund consumption from out of pocket appropriations. The effect is some headroom for import-elastic consumption but also more importantly, demand for cheaper substitutes where possible. Trade growth suffers in this regard.

Positive growth in Manufacturing is being sustained by stability in the foreign exchange market, a feat achieved by the CBN’s willingness to supply US dollars to the foreign exchange markets, while offering inflation-adjusted yields in excess of 500bps to foreign investors. The combined growth in both Trade and Manufacturing, two sectors highly responsive to consumers wallet sizes and expectations, point to a pass-through of election-induced spending in the short term and broader recovery in the economy.

Swing Sectors

Telecoms – conditions at their best in years

The Telecoms sector (9.73% of GDP), grew by 16.67% y/y in Q4 2018. Building on its Q3 18 performance, the sector extended gains to post an 11.33% year-on-year growth among peers with contribution to GDP above 6.00%.

Telecoms segment of GDP, y/y growth

Strong growth in Telecoms reflects new investments, growing franchises and growth in internet and mobile banking. A deeper penetration of data-reliant devices in the Nigerian market, and an increasing migration of media services to internet-driven platforms otherwise traditionally offered off-net explain the strong performance. We expect Telecoms to leverage participation as Payment Service Banks and sustain growth going forward.

Nigeria, oil production

Oil & Gas GDP continues to exhibit volatility. Nigerian oil production was flat year-on-year and up 1.33% q/q in Q4 2018. However, actual cargo loadings from exports terminals declined by 7.29% q/q and 5.53% y/y in Q4. This, together with an average quarterly price below US$70.00bbl, partly explains the slide in Oil & Gas GDP for the quarter. A degree of volatility in production is likely to be addressed by the new Egina Oil field but Nigeria remains exposed to price volatility.

Pattern of growth and outlook for 2019

Q4 2018 GDP growth outperformed the Bloomberg consensus estimate of 2.10% y/y. While some of this growth may have been induced by election-related demand, we believe that more fundamental factors, in particular Naira foreign exchange stability, are at work.

Monetary policy is less likely to change in response to the latest development in GDP, at least in H1 2019. Real growth of 1.93% for FY 2018 was achieved on the back of adjustments in fundamental variables, in our opinion. For instance, demand for loans was weak but we do not read this as an effect of market interest rates 300pbs above the Monetary Policy Rate (MPR). Prime lending rates data show a standard deviation of only 1.05pps since 2006, suggesting that interest rates are seldom low. We expect a positive shift in manufacturers’ and investor’ confidence, to have spurred growth, irrespective of interest rates.

Fiscal policy, in so far as it relates to government spending, is limited in contributing to real sector growth by its sheer smallness relative to the economy as a whole. Increasing debt servicing costs further squeeze government revenues and implementation of capital expenditure.

However, the trend in Agriculture is positive. Even more so is the performance of the Telecoms sector which headlined overall growth in Q4. A stable exchange rate remains the platform for Trade and Manufacturing to rebound though slack demand are likely to keep growth capped.

Downside risks to GDP growth remain from the risk of declining crude production levels and oil price volatility, as well as the performance of Real Estate. Nevertheless, we expect our base case GDP forecast of 2.25% y/y for

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Court Remands Ecobank Manager In Prison For N411million Fraud



A Federal High Court in Ikoyi, Lagos, has ordered the remand of Ifeanyi Chukwu Azike, a manager of Ecobank Plc, over allegations of defrauding one of the bank’s customers to the tune of N411million.

Azike was arraigned before Justice Ayotunde Faji on Tuesday, by the Special Fraud Unit (SFU) of the Nigeria Police Force on a three-count charge bordering on obtaining money under false pretences, false representation and fraud.

The charge signed by ASP Daniel Aporchi, marked FHC/L/56c/2019, alleged that the Ecobank manager, fraudulently obtained the sum of N150million from one Okafor Ikenna Kelvin, owner of the bank account number, 0533010936.

Azike allegedly received the money between 2016 and 2017, under the pretext of buying the customer a Federal Government Treasury Bill in his bank.

Azike was also alleged to have forged the bank customer’s signature and a letter of instruction, which he used to open another parallel account as Ikenna Okafor Kelvin, with account number: 5333063028.

The Police also alleged that the bank manager, without the consent of the bank, fraudulently converted the sum of N411million belonging to the customer, to his personal use.

The offences, according to the prosecutor, Daniel Apochi, contradicts the provision of Section 1(1)(a), 15(1)(2) and 15(2) of the Advance Fee Fraud and Other Fraud Related Offences Act No. 14 of 2006, and punishable under Section 1(3) of the same Act.

The offence is also said to be contrary to the provisions of section 1(2)(2) of the miscellaneous Act. Cap. M17, laws of the federation of Nigeria, 1999 (as amended).

The charge sheet, sighted by SaharaReporters, read: “That you lfeanyi Chukwu Azike ‘M’ sometime in 2016 and 2017, in Lagos, within the jurisdiction of this Federal High Court with intent to defraud, obtained the sum of N150,000,000.00 (One Hundred and Fifty Million Naira) from Mr Okafor Ikenna Kelvin, a customer of Ecobank Plc with Account No: 533010936 from your employer, by falsely representing to him that you are going to purchase Federal Government Treasury Bill in Ecobank Nigeria Plc for him as Bank Manager, which representation you knew to be false or did not believe to be true and by this conduct, you thereby committed an offence, contrary to Section 1(1)(a) of the Advance Fee Fraud and Other Fraud Related Offences Act No. 14 6V2006, but punishable under Section 1 (3) of the same Act.

“That you Ifeanyi Chukwu Azike ’M’ sometime between 2016 and 2017, in Lagos, within the jurisdiction of this Federal High Court did forge Signature, Picture, Letter of Instruction to open another parallel account as Ikenna Okafor Kelvin, account number: 5333063028, knowing it to be false or with intent that it may in anyway be used or acted upon as genuine, whether in Nigeria or elsewhere to the prejudice of Ikenna Okafor Kelvin and Ecobank Plc your employer, you thereby committed an offence, contrary to Section 1(2)(c) of the Miscellaneous Offences Act, CAP M17 Laws of the Federation of Nigeria, 1999 (as amended).

“That you Ifeanyi Chukwu Azike ’M’ on or about 2016 and 2017, in Lagos, within the jurisdiction of the Federal High Court, did fraudulent convert to your use the sum of N411,000,000.00 (four hundred and eleven million Naira) being money fraudulently withdraw from your employer bank without their consent, and customer of your bank, Ecobank Plc for enabling you invest on behalf of the Customer, which you failed to deliver with the aim of converting the illicit origin of the resources and you thereby committed an offence punishable under Section 15(1)(2) and 15(2) of the Money Laundering (Prohibition) Act, 2011.”

The defendant pleaded not guilty to the charge.

Following his plea of not guilty, the prosecutor urged the court to remand him in prison custody pending trial.

Consequently, Justice Faji ordered that the defendant be remanded in prison custody, while he adjourned till March 8, for trial.

The judge also fixed the date for hearing of his bail application.

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Anambra govt reacts as protesting drivers shut out passengers from parks

The Anambra State Government has pleaded with travellers who were Wednesday shut out of the state government-owned motor parks, by protesting drivers.

The protesting drivers who were workers with the Transport Company of Anambra State, TRACAS numbering over 100 had staged a protest against the management of the company and by extension the state government over what they described as their unfair attitudes towards them.

The driver stopped passengers from boarding government-owned vehicles to Abuja and Lagos, forcing most passengers to return home for the day and not travelling to meet their engagements.

But speaking for the state government, the Managing Director of the company, Mrs Ifeoma Madukasi pleaded with travelers who were bullied by the protesting drivers, saying that it was not the habit of the transport company to be so unruly, but stating that the drivers were infiltrated by some elements who sought to control the company because they owned vehicles in the fleet.

“Most of those people you saw are LV drivers. LV means leasing vehicles, and what it means is that the vehicles do not belong to TRACAS, but they are running under our cover. These set of drivers are very troublesome, and would not allow new policies in the company.

“Most of them have expired vehicle papers, but when you ask them to go and renew, they see it as an attack. Those were part of the reasons for the protest you saw yesterday(Wednesday). We apologize to our passengers who were stopped from boarding vehicles to meet important engagements by these unruly drivers. Governor Obiano is looking into it, and it won’t happen again.”

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