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NIGERIAN BANKING SECTOR - Twitter war is over, earnings rolling in gradually

Twitter war is over, earnings rolling in gradually                                                                             

The US–China trade war seems to be gathering more momentum with President Donald Trump imposing sanctions on Chinese manufacturers. U.S. imposed tariffs on $34 billion worth of Chinese goods as part of its new tariffs policy and this led China to respond with similar tariffs on U.S. products. Despite continuous deliberations, President Donald Trump appears hell bent on maintaining his seemingly protectionist stance – elongating the trade war.                                                                 

On the contrary, the Nigerian twitter “Bank War” ended in just a few days after Sterling Bank deleted its earlier tweet that showed the bank taking its customers to the moon via a rocket whilst some other banks were depicted with their logos and trademarks. Apart from some of the banks that might have been obviously referenced in the tweet through their logos, a few other banks’ Head Offices can be spotted in the background of the picture that accompanied the nicely crafted tweet.

Earnings season is here with a few of the early filers already reporting their half year results. It is definitely time for the big banks to do their talking. GUARANTY and ZENITHBANK were quiet all through the twitter bank war and I expect their noise to come out loud now. Having reported record high profits consecutively in FY’16 and FY’17, the banks are looking to extend their performance this year. Despite our relatively positive earnings expectation from the banking space, we are less optimistic about the possibility of this being a catalyst for market revival as political uncertainties and interest rate normalization in developed markets continue to overshadow sound stock fundamentals. Having said that, we expect the earning season to come with improved market activities as investors take quick short-term positions.