​ Devaluation is no silver bullet. We are cautious on a given the
combination of poor monetary and fiscal policies.
ï‚· Capital ratios should further tighten due to NGN depreciation and
worsening asset quality (low coverage and hefty NPL formation).
ï‚· Our acid test reveals 7 undercapitalized banks with a NGN 682-
1,002bn capital deficit in the system.
ï‚· Skye and Unity could be insolvent, while FBNH and Sterling will
need a dilutive capital hike, in our view.
ï‚· NGN devaluation to 306 adjusts for inflation differential up to 2005
situation, while the parallel market (480) adjust back to 2000.
ï‚· Zenith (ALM, strong PPP), UBA (deep value) and Access (upgraded
to Buy on better revenue mix) on low risk and compelling value.
Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa.
Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research.
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