Over the last one year, headline inflation tracked faster, reaching an eleven-year high in January 2017 as the cumulative impact of hikes in electricity tariff and fuel cost as well as naira weakness induced pressures on consumer prices.
In contrast to sector peers, which had a stellar 2016 performance, Forte Oil (FO) grappled with impact of NGN depreciation on dollar loans linked to its power plant and an elevated bill from the taxman. Earnings halved from 2015 levels and FO did not declare dividend. In response, the stock was heavily sold off by investors (-29.9% YTD, -81.1% over 52-week). Irrespective, current adjustments to earnings guides our rating upgrade to a NEUTRAL (from SELL).
Equities market closed today on a negative note, as NSE ASI depreciated by 0.01% to close at 25,249.74 basis points, as against 0.01% appreciation recorded previously.