Breakfast Report - 15 October, 2018
President Buhari recently signed an executive order tagged the Voluntary Offshore Assets Regularization Scheme (VOARS). The order is an anti-money laundering and tax evasion initiation which requires Nigerian taxpayers to declare all offshore assets and incomes. The order states: “Any taxpayer who truthfully and voluntarily complies with the conditions of the scheme pays a one-time levy of 35% on the total offshore assets, or all outstanding taxes, penalties and interest after forensic audit”. The government is optimistic that the scheme will help expand the tax base and avoid the failings of the Voluntary Assets & Income Declaration Scheme, the government’s tax amnesty which missed its revenue targets.
Equity: Following another mildly positive trading session on the exchange (+12bps), the NSE All-Share Index closed last week with a modest +23bps w/w close. Three of the four key sectors finished in the green, with small-cap stocks dominating trading on a quiet day for heavyweights. Though closing positions for the week signal a positive tilt to trading, thin volumes and weak investor appetite indicate still downbeat investor sentiment and as such we foresee more mixed closes this week.
Stock Watch: After gaining 10% in Friday’s session for a 17% w/w gain, WEMABANK closed at ₦0.66 on Friday. This represents a 27% return YTD, far outperforming the Banking index (-13%) and making it one of the best performing Tier-II banking names.
Fixed Income: As a result of tight liquidity following the mop-up on Thursday last week, we expect tepid trading in the fixed income market today.
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