Part B Q2-Q3 Outlook

Transcription

1 Part B 2014 Q2-Q3 Outlook

2 Outline What to Expect in Q2 & Q3 Sectors to watch Political Risk Analysis 2 Financial Derivatives Company Limited

3 Q2 in Perspective Currency will remain stable in Q2 until Sanusi leaves 2 MPC meetings New CBN Governor: political considerations outweigh economic credentials Nationwide cashless policy National Conference Ekiti Governorship election Cabinet reshuffle 3 Financial Derivatives Company Limited

4 What to Expect in Q3 PDP convention APC convention Osun state election Budget Financial Derivatives Company Limited

5 Sectors to Watch Hospitality Real Estate Aviation Telecoms Retail

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7 Hospitality Sector - Structure Growth of 13.66% year on year as at Q3 13 Branded hotel rooms in the Lagos metropolis are 2,200 Non-branded rooms are 3,000 Over $500m investments in less than a decade* Hospitality industry Big and small players 9 of the world s top 10 hotels have thriving businesses in Nigeria Sheraton, Protea, Southern Sun, Sofitel, Wheatbaker, Oriental *Businessday Online December 13, Financial Derivatives Company Limited

8 Hospitality Sector - Structure Several smaller hotels and restaurants that employ the majority of the hospitality workforce Lagos holds 60% of the country s total hotel room capacity Concerns about work conditions and income levels New projects include Marriot Courtyard, Hilton and Meridian in Ikoyi Occupancy rate in Ikoyi is down to 60%, while VI is up at 75% Price war between Ikoyi and VI hotels 8 Financial Derivatives Company Limited

9 Hospitality Industry at a Glance Nigeria is expected to be the fastest-growing African market over the next five years* Exceeding SA and Mauritius More international hotel brands are in the pipeline Sector will continue to be dominated by foreign brands Lagos is the most preferred destination Some international brands expected in 2014 Marriott Hotel (Lagos), Swiss International Hotels (Lagos and Port Harcourt), Park Inn by Radisson (Abeokuta) Source: *PWC 9 Financial Derivatives Company Limited

10 Hospitality Industry at a Glance More hotel rooms already in the pipeline for 2015 Signifying increased business confidence Transcorp Hilton Ikoyi s 350-room hotel Already intense competition in the sector is expected to increase further Marriott recently finalized a deal to buy Africa s largest hotel chain, the Protea group, for US$186m Marriott International Inc. and Mali-based Groupe Azalai Hotels are also adding rooms on the continent As demand for raw materials like oil, copper and gold fuel economic growth 10 Financial Derivatives Company Limited

11 Hospitality Industry at a Glance Acquisition will almost double Marriott s hotel chains globally Will give Marriott more than 23,000 rooms in Africa Protea is an established brand in Africa Owns at least 11 hotels across Nigeria Investments in Nigeria valued at USD 70m Poses significant competitive threats to big brands already participating in the sector Intercontinental, Sofitel, Sheraton, Hilton, Radisson Reduces the list of remaining potential takeover/ M&A targets Tsogo Sun Holdings (Southern Sun), TPS Eastern Africa (Serena) 11 Financial Derivatives Company Limited

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13 Lagos Declared Second Most Expensive City HRG Hotel Survey reveals Lagos as the 2nd most expensive city for travellers With an average hotel room rate of 117 ( $176.5 or N28,241) Moscow is the most expensive Lagos enjoys high occupancy factor due to increased demand Supported by presence of O&G industries and multinational companies Big prize is domestic and regional business travellers 13 Financial Derivatives Company Limited

14 Top 5 Predicted Trends Intercontinental Hotel and other new entrants boost competition Price competition will kick in and service quality should improve Human capital development: improved training for customer service and hospitality to be a unique selling point F&B Differentiation will centre on creativity, quality of food and experience Growth of local / regional traveller will begin to influence industry choices, e.g. local sourcing? 14 Financial Derivatives Company Limited

15 Hospitality Sector More Entrants to Africa Louvre Hotels Group, a unit of Starwood Capital Group LLC, will open as many as 16 hotels in Africa in 2014 * * Including its first in French-speaking sub-saharan countries Sub-Saharan African economies are expected to outpace every region except developing Asia in 2014* Improved business confidence is expected to fuel growth by increasing business and leisure travel Sub-Saharan region has grown at an annual average of 5% 56 million travellers visited Africa in 2013 * Up 6% from 2012 Projected to increase similarly in 2014 *IMF Regional Economic Outlook for SSA ** Bloomberg 15 Financial Derivatives Company Limited

16 2014 Outlook The hospitality sector is expected to continue its rapid growth Driven by favorable tax policies, cheap labor and expansion drives Growth however will be tampered by security concerns Rooms and occupancy rates are projected to increase As new operators arrive on the domestic scene Stiff competition and resulting promotional activities are also expected 16 Financial Derivatives Company Limited

17 Hospitality Sector - Vulnerability to Risks Exchange Rate Risk Neutral Hotels receive some of their revenues in USD and also make some payments in USD. The net effect is neutral Interest Rate High Increase in interest rates implies higher cost of borrowing and increased finance costs. This will put downward pressures on cash flows and profitability Political Risk High Political instability will give rise to security concerns and consequently lead to decrease in business confidence 17 Financial Derivatives Company Limited

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19 Market in Disequilibrium Asking rents are high Affordability is low Leaving a supply gap Result is high vacancy, high delinquency and poor cash flow With inflation inching up and currency depreciation, real estate is becoming an investors paradise 19 Financial Derivatives Company Limited

20 Where are the Hot Spots? Type of Property Rental Price V. Island Rental Price Ikoyi Rental Price Lekki Luxury Apartment- Per Annum Detached House/ Duplexes- Per Annum Office Space - Per Square Metre Land- Per Square Metre N8m-N11m N8m-N11m N2.5m-N3m N8m-N13m N8m-N15m N3m-N5m N50,000- N70,000 - N25,000-N35,000 N180,000- N250,000 N180,000- N250,000 N90,000- N130,000 Properties on major streets command higher prices Ikoyi remains mostly a residential area Commercial properties are mostly found in V.I Some commercial properties found in Lekki are residential houses converted for office use 20 Financial Derivatives Company Limited

21 FDC Survey in January 2014 Residential Vacancy Factor Commercial Vacancy Factor Victoria Island 23% 7% Ikoyi 3% 0% Lekki 13% 0% During the month, vacancy factor for residential properties remained higher than for commercial properties Commercial vacancy factor shows Lekki and Ikoyi are still predominantly residential areas Source: FDC Research 21 Financial Derivatives Company Limited

22 Victoria Island - Residential Vacancy Factor higher than Commercial Out of the 6 streets surveyed in Victoria Island, the vacancy factor for houses and flats is highest in Sinari Daranijo Commercial vacancy factor is highest in Saka Jojo Street Name No. of Houses Vacancy Factor (Houses) No. of Flats Vacant Factor (Flats) Average Residential Vacancy Factor Vacant Factor (Commercial) Victoria Island Saka Jojo 21 10% 0 0% 19% Sinari Daranijo 31 13% 12 67% 0% Ologun Agbaje 20 5% 6 33% 9% Younis Bashorun 38 5% 13 0% 13% Bishop Oluwole 70 7% 18 61% 6% Oyin Jolayemi % 8% Average 8% 38% 23% 7% Source: FDC Research 22 Financial Derivatives Company Limited

23 Ikoyi- Residential Vacancy Factor higher than Commercial Out of the 4 streets surveyed, the vacancy factor for flats is highest in Lugard The vacancy factor for houses is highest in Thompson Avenue Street Name No. of Houses Vacancy Factor (Houses) No. of Flats Vacant Factor (Flats) Average Residential Vacancy Factor Vacant Factor (Commercial) Ikoyi Cameron 45 4% 42 0% 0% Thompson Avenue 9 33% 74 0% 0% Lugard 38 3% 75 19% 0% Glover 55 4% 412 0% 0% Average 3% 2% 3% 0% Source: FDC Research 23 Financial Derivatives Company Limited

24 Lekki - Residential Vacancy Factor higher than Commercial Out of the 4 streets surveyed, the vacancy factor for houses is highest in Admiralty Way The vacancy factor for commercial properties is highest in Bisola Durosinmi Etti Drive Street Name No. of Houses Vacancy Factor (Houses) No. of Flats Vacant Factor (Flats) Average Residential Vacancy Factor Vacant Factor (Commercial) Lekki Admiralty Way 13 31% 134 0% 0% Obafemi Anibaba 11 9% 0% 0% Prince Adelowo Adedeji 30 7% 0% 0% Bisola Durosinmi Etti Drive 29 14% 0% 14% Average 13% 0% 13% 1% Source: FDC Research 24 Financial Derivatives Company Limited

25 Constraints Land Use Charge- Responsibility of Property Owner or Occupier? Issues relating to land use charge also discourages buyers The responsibility for payment of the Land Use Charge resides primarily with the property owner Lack of proper documentation for government authorities to differentiate between occupier and property owner Difficult for occupier who makes payment to get reimbursement from the property owner Also, problems with calculation of rate charged 25 Financial Derivatives Company Limited

26 Real Estate Outlook & Risk A lot of activities in the construction sector expected in the first half of 2014 Supported by foreign investors who are attracted by the Eko Atlantic project and the Lekki Free Trade Zone We expect to see more properties available in the market as electioneering activities pick up The resulting buying and selling is expected to boost the sector There is a possible risk of an oversupply of properties, which could likely to dampen prices 26 Financial Derivatives Company Limited

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29 President Approves New Board For Aviation Parastatals & Agencies The parastatals and agencies are: Federal Airports Authority of Nigeria (FAAN) Nigerian Airspace Management Agency (NAMA) Nigerian Civil Aviation Authority (NCAA) Nigerian Meteorological Agency (NMA) Dates for the formal inauguration are yet to be announced Appointments appear to be politically driven Not based on efficiency or antecedents of the appointees 29 Financial Derivatives Company Limited

30 International Traffic Dubai becoming an increasingly attractive destination for Nigerians Flights to Dubai account for a significant portion of total international traffic Transit point for the Middle East, Far East, Europe and America Student travel Increasing number of American-approved Universities in Dubai Medical and general tourism 30 Financial Derivatives Company Limited

31 International Traffic Other Routes North Atlantic and US Traffic Low inbound and outbound load factors Operators have been giving steep discounts As much as 25% Several flights have been cancelled or rescheduled Chinese Traffic Currently slow May pick up as shoppers and traders stock up for the Easter celebrations 31 Financial Derivatives Company Limited

32 International Traffic Other Routes February is normally a slow-traffic month Operators enjoyed high load factors during the Christmas celebrations Expected to pick up at the end of March to the beginning of April Ahead of the Easter holidays 32 Financial Derivatives Company Limited

33 Regional Aviation - Airlines bid for 30% Stake in Senegalese National Carrier The national carrier has received offers from a number of operators including South African Airways (SAA), Africa s biggest carrier SAA has not turned a profit in years The state has a 51% stake in the airline Was set up in 2009 after the collapse of Air Senegal International The government increased its stake to prevent bankruptcy Africa s major operators are making moves to tap traffic beyond their home markets IATA has forecasted that African carriers will be profitable this year for the first time since Financial Derivatives Company Limited

34 Global Aviation , Safest year in a decade for commercial air transport The European Aviation Safety Agency (EASA) declared 2013 the safest year in a decade for commercial air transport There were17 fatal accidents worldwide involving large commercial air transport aircraft Compared to a yearly average of 27 Fewer than any other year in the last decade As a result, there was also a significant decrease in the number of fatalities worldwide Down to 224 in 2013, compared to a yearly average of 703 between 2003 and Financial Derivatives Company Limited

35 2014 Global Outlook IATA raises global airline profit outlook for 2013 & 2014 Revised its outlook from its last forecast issued in September 2013 Based on a slight fall in oil prices and better industry business practices Global airline industry to generate net profits of $12.9bn in 2013 and $19.7bn in 2014 Representing $1.2bn and $3.3bn improvement in 2013 and 2014 respectively Also forecasts that airlines will carry 3.91bn passengers by 2017 A 31.2% increase over the 2.98 billion passengers carried in 2012 Average annual worldwide passenger growth of 5.4% for the period 35 Financial Derivatives Company Limited

36 2014 Domestic Outlook The aviation sector will follow the trend in the level of disposable income Will also be affected by the direction of the currency We expect increased traffic from April to July Due to the Easter and summer travelling Also due to pre-election exit The currency is expected to depreciate after the exit of the current CBN Governor Ticket prices will rise significantly Price wars may result 36 Financial Derivatives Company Limited

37 Aviation Sector - Vulnerability to Risks No threats of new entrants Intensity of rivalry to increase Exchange Rate Risk Neutral Cost of fuelling and operations are mostly in naira Interest Rate High Increase in interest rates implies higher cost of borrowing and increased finance costs. This will put downward pressures on cash flows and profitability Most airlines are already highly leveraged 37 Financial Derivatives Company Limited

38 Aviation Sector - Vulnerability to Risks Political Risk High Political instability will give rise to security concerns and consequently lead to decrease in business confidence Leading to a reduction in both business and tourist travel 38 Financial Derivatives Company Limited

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41 Economics of Sector Fastest growing sector at 24.42% Outperforming national GDP by 17.55% Contributes 7.84% to GDP with investments in excess of $25b Has direct and indirect linkages with other sectors in the economy Airline booking system Payment system Advertising Entertainment and media e.g. TV broadcast, caller tunes, movies and creative art One of the most attractive markets in Middle East & Africa- Pyramid Research 41 Financial Derivatives Company Limited

42 Structure & Trends Capital intensive and extremely competitive industry Competition largely between 4 GSM providers Major players not listed on the NSE Licenses of GSM service providers due for renewal in 2016 Increased demand for broadband services 47.45% of 122m active subscribers use internet data 52.55% yet to use internet data as at October 2013 Increased penetration of mobile phone usage Number portability launched E-commerce growing with potential as Nigeria embraces cashless 42 Financial Derivatives Company Limited

43 Vulnerabilities Exchange rate neutral High exposure to interest rate risks as cost of finance increases Political unrest Inadequate power supply Increased costs with higher gas prices Increase in fuel prices, reducing disposable income Boko Haram crisis, a threat to e.g. base stations 43 Financial Derivatives Company Limited

44 Retail Industry -Bain s View

45 Nigerian economy with strong economic fundamentals Nigeria is the 2 nd largest economy in SSA Nigerian GDP (PPP) expected to continue to grow at 6.8% CAGR over the next years Inflation expected to flat out to ~7-8% in the coming four years Exchange rate to USD has been relatively stable Nigeria is the most populous country in Africa with ~165M people, +2.5% p.a. 45 Financial Derivatives Company Limited

46 Nigerian economy with strong economic fundamentals The population is and will remain young, ~76% under the age of 35 in 2030 Share of private consumption is at 60% of GDP, in line with other SSA countries Private consumption growth driven by expanding top of the pyramid 46 Financial Derivatives Company Limited

47 African retail trade is composed of three segments Formal retail Traditional trade Modern trade Accounts for majority of African retail Consists of small retailers, specialty stores Highly fragmented and dispersed across urban and rural areas Similar to western modern trade Populated by local and multinational retailers More developed in South Africa; starting to grow elsewhere but from small base Informal retail Significant share of African retail market Trading by unregistered sellers (e.g. hawkers) or reporting evasion in modern economy Prevalent in rural areas and fringes of urban sectors 47 Financial Derivatives Company Limited

48 Apple Store in New York Apple Store at Ikeja Mall Oshodi Computer Village

49 Modern trade with strong impact in emerging markets Greater variety and better quality of food and non-food products Market transparency and decrease in food prices Increase of employment (direct and indirect) Benefit for farmers by being integrated into the food supply chain Investments in technology Decrease of tax evasion (e.g. VAT, income tax) Increase of local consumer goods production 96 Financial Derivatives Company Limited

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51 Retailers identify 5 key challenges to operating in Nigeria Regulatory and trading barriers Underdeveloped infrastructure Limited access to retail real estate 4 5 Limited talent pipeline Scant consumer & trade insights 98 Financial Derivatives Company Limited

52 Retailers identify 5 key challenges to operating in Nigeria 1 Regulatory and trading barriers Opaque government processes with high bureaucracy Ever-changing regulations due to lobbying and favoritism Specific local market regulations and subsequent high import costs 99 Financial Derivatives Company Limited

53 Low ease of doing business in Africa, but this is comparable to many other emerging markets World Ease of Doing Business Index 1 st Quartile 2 nd Quartile 3 rd Quartile 4 th Quartile Note: Ranking takes into account factors such as time and cost to start a business, ease of employing workers, getting credit, paying taxes, investor protection policies etc (detailed definition in back-up) Source: Ease of Doing Business Rankings, World Bank 100 Financial Derivatives Company Limited

54 Bureaucracy in SSA creates burden for CPGs and retailers Bureaucratic And Opaque Government Regulations Importing regulations are complex and have costly tariffs Corruption And Political Instability Degree of corruption varies hugely by country... For example Ghana offers normal business conditions Slow port clearance and a complicated tariff and duty structure cause constant difficulties Whereas Western companies may be protected by their local embassy, we are really exposed to governments One of the biggest difficulties is the political instability and the business environment, from complicated duties to harsh regulations There are countries in which we cannot operate locally because of challenging ethical environments... in these instances, we must remain off-shore Source: Company interviews 101 Financial Derivatives Company Limited

55 Retailers identify 5 key challenges to operating in Nigeria 1 Regulatory and trading barriers Opaque government processes with high bureaucracy Ever-changing regulations due to lobbying, favoritism Specific local market regulations and subsequent high import costs 2 Underdeveloped infrastructure Road, power and other infrastructure provisioning lag BRICs 50% of infrastructure funding needs remain unmet 55 Financial Derivatives Company Limited

56 Under-developed infrastructure in key African markets identified as major challenge by CPGs Poor infrastructure causes manufacturing of Guinness in Nigeria to be more expensive than in Ireland and transportation of goods to Lagos from Abidjan to take longer than from China Diageo Potential expansion should take into account infrastructure difficulties. For example, Angola is under water for a substantial part of the year Intermittent access to power and water have disrupted our operations significantly in the past year Although we can make our factories water and electricity sufficient, the killer blow is the logistics of road, rail and ports; it takes months to take materials through countries Poor infrastructure increases our costs and requires integrating larger time buffers in supply-chain planning Source: Company interviews 56 Financial Derivatives Company Limited

57 Retailers identify 5 key challenges to operating in Nigeria 1 Regulatory and trading barriers Opaque government processes with high bureaucracy Ever-changing regulations due to lobbying, favoritism Specific local market regulations and subsequent high import costs 2 3 Underdeveloped infrastructure Limited access to retail real estate Road, power and other infrastructure provisioning lag BRICs 50% of infrastructure funding needs remain unmet Limited availability of real estate in high footfall locations Malls drive much of the progress in organized retail They also provide local, urban, and regional attractions for shoppers 57 Financial Derivatives Company Limited

58 Biggest cities will play critical role in driving modern retail Population By State In M, 2012 City Popu-lation % Of National Population Disposable Income Per Capita % Of National Disposable Income Lagos (1) 9.6M 5.8% $1, % Kano 3.4M 2.0% $1, % Ibadan 3.1M 1.9% $1, % Abuja 2.3M 1.4% $1, % Benin City 1.2M 0.7% $1, % 3 6 Port Harcourt 1.2M 0.7% $1, % Aba 1.2M 0.7% $1, % Ilorin 0.9M 0.6% $1, % Kaduna 0.9M 0.5% $1, % 2 4M 10 Maiduguri 0.9M 0.5% $1, % 5 7M 8 10M TOTAL 24.8M 14.9% 23.4% 10M and higher (1) Lagos numbers show population and disposable income of Lagos city, not of Lagos metropolitan area Note: Year-on-Year exchange rates Source: UN Population Data, IMF World Economic Outlook 2013, Euromonitor 58 Financial Derivatives Company Limited

59 Retailers identify 5 key challenges to operating in Nigeria 1 Regulatory and trading barriers Opaque government processes with high bureaucracy Ever-changing regulations due to lobbying, favoritism Specific local market regulations and subsequent high import costs 2 Underdeveloped infrastructure Road, power and other infrastructure provisioning lag BRICs 50% of infrastructure funding needs remain unmet 3 Limited access to retail real estate 4 Scant consumer & trade insights Limited availability of real estate in high footfall locations Malls drive much of the progress in organized retail They also provide local, urban, and regional attractions for shoppers Limited data on consumer insights, needs and behaviors Lack of market data on trade and POS activity Particularly challenging given diversity of consumers and markets 59 Financial Derivatives Company Limited

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61 Very limited availability of consumer and trade data Consumer Research Trade Research In Europe, we are used to Nielsen, and other quantitative market data sources as well as detailed consumer insights, but there is limited reliable market information like that here The lack of data on Nigeria represents a challenge; we have no sources on the profitability, size, and strategic importance of different retail outlets [...] For fairly informal and fluid markets that are often cash-based, a different picture emerges than what private research firms can gather We would love to know more about the route-to-market; especially the units at the last mile the information just isn t out there We are in constant discussions with [research firm] as the numbers they supply us do not triangulate There is almost no information out there on consumer preferences and behaviors The data available, even from companies like [research firm], is very poor, inconsistent, fluctuates between time periods and regions, and is not a good measure of the market Source: Company interviews 61 Financial Derivatives Company Limited

62 Scarce coverage by research firms of key African markets A.C. NIELSEN PLANET RETAIL EUROMONITOR South Africa (some business presence) (trend report) (consumer profiles) Egypt 2 5 % (full market data) Algeria (key characteristics) (basic consumer data) Nigeria Morocco Angola (no local presence) (basic market data) (no consumption data) Sudan Libya Tunisia Kenya 2 5 % 62 Financial Derivatives Company Limited

63 Retailers identify 5 key challenges to operating in Nigeria 1 Regulatory and trading barriers Opaque government processes with high bureaucracy Ever-changing regulations due to lobbying, favoritism Specific local market regulations and subsequent high import costs 2 Underdeveloped infrastructure Road, power and other infrastructure provisioning lag BRICs 50% of infrastructure funding needs remain unmet 3 Limited access to retail real estate 4 Scant consumer & trade insights Limited availability of real estate in high footfall locations Malls drive much of the progress in organized retail They also provide local, urban, and regional attractions for shoppers Limited data on consumer insights, needs and behaviors Lack of market data on trade and POS activity Particularly challenging given diversity of consumers and markets 5 Limited talent pipeline Limited pool of mid/top level management due to low tertiary education and diaspora 63 Financial Derivatives Company Limited

64 Summary: Many challenges in Nigeria similar to other emerging markets, but some are more pronounced 1 Regulatory and trading barriers Smaller RELATIVE TO OTHER EMERGING MARKETS Similar Greater RATIONALE Bureaucracy and opaque processes in Nigeria similar to other emerging markets 2 Underdeveloped infrastructure Less developed than in most emerging markets, although types of problems in supply chain management may be different 3 Limited access to retail real estate Slightly greater in Nigeria due to high cost in property development, though challenges exist elsewhere as well 4 Scant consumer & trade insights More pronounced in Africa as public research more readily available in BRICs and many other emerging markets 5 Limited talent pipeline Much more acute in Africa due to diaspora and high talent turnover, as well as lower skill 64 Financial Derivatives Company Limited

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67 Political Update Introspection in the PDP The dominant political party in Nigeria since 1999 PDP has lost its nationwide grip Becoming the leading political association under Yar adua And now a Primus inter pares (first amongst equals) The opposition APC has become another agglomeration of political Jobbers 67 Financial Derivatives Company Limited

68 Political Update From controlling only one state five years ago, the APC now has 18 Governors with a few more leaning towards it The PDP has an opportunity to clean its house To either become an efficient and well-managed institution OR Continue to atrophy and wither away Chances are that under the Muazu leadership The party may find a new direction With young and energetic leadership across the states Failure to reinvent itself soon will mean being swept away into political irrelevance 68 Financial Derivatives Company Limited

69 How does it plan to seize the political initiative? Use incumbency effectively in appeasing the North West With juicy appointments and patronage in defense, security and oil concessions Power privatization and other waivers Split the North East using the Muazu factor and Atiku renegades Reshuffle the cabinet and reward the North mainly Lure all the former APC leaders who feel marginalized 69 Financial Derivatives Company Limited

70 The Challenge Can Jonathan s team trust the Northern leadership? Will he be double crossed at the last minute? The firing of top military officers and changing of the guards means more changes to come 70 Financial Derivatives Company Limited

71 The Game Plan Split the South West, between Afenifere, APC and the Obasanjo followers Offer some appointments to entice the elite Take Ekiti state by all means possible; Fayose is the PDP man Fayemi and Bamidele are expected to split the APC votes Crush any uprising or electoral protests This will be the litmus test for the PDP new aggression The APC will be branded as an Islamic party by the PDP Contrived threats of Boko Haram attacks in Lagos 71 Financial Derivatives Company Limited

72 The Game Plan Expected to heighten anxiety among Christian Southern voters Deja vu Abacha style NADECO bomb blasts of 1990s Difficult to use that strategy in 2014 In a social media world the opposition will counter strongly Labour party and APGA will join the PDP A third party of PDP and APC renegades will emerge A first round victory by any party is becoming more unlikely The electoral management agencies INEC, Police, Judiciary need to appear as impartial as possible 72 Financial Derivatives Company Limited

73 The Game Plan In 2011, the outcome was more important than the process In 2015 the process is more important than the outcome A massively rigged election will threaten national stability Possible Outcomes Deadlock Smooth Change Status Quo Undesirable Good for business 73 Financial Derivatives Company Limited

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75 Corporate Humour Adam was the luckiest man in the world, he had no mother-in-law. Unknown Author What is right is often forgotten by what is convenient. - Bodie Thoene Faith is jumping into nothing and landing on something. 75 Financial Derivatives Company Limited Unknown Author

76 Corporate Humour It is not the load that breaks you down but the way you carry it. Raymond Smith There are only 3 things women need in life food, water and compliments. - Unknown Author 76 Financial Derivatives Company Limited

77 Corporate Humour It is not a lack of numbers but a lack of holiness that hinders the church. Unknown Aurthor - Unknown Author Faith sees the invisible, believes the unbelievable and receives the impossible. Do not use a hatchet to remove a fly from your friends forehead. Chinese Proverb 77 Financial Derivatives Company Limited

78 Corporate Humour A friend to everybody and to nobody is the same thing. Unknown Author 1 cross + 3 nails = 4 given If you think no one cares if you are alive, try missing a couple of loan payments. - Unknown Author 78 Financial Derivatives Company Limited

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80 Bismarck J. Rewane, MD/CEO Financial Derivatives Company Ltd. Lagos, Nigeria