NIGERIAN ENERGY SECTOR FUND: TRADING HELPS.

Trading helped the fortunes of the Nigerian Energy Sector Fund in the year to March 2015 more than anything else. The truth is if trading had chipped in loss like it did in March 2014 year, there would been no  talk of fair profit for the period.
According to the brief on the year released late 2015, there was 187.2% recovery from the trading loss of N32.1m in 2014 to N28m trading income.
Unfortunately, no other income growth fell in step with this and to worsen matters operating expenses jumped from N21m to N96.3m.
Increase in interest income was 8.28% from N93m to N100.7m although still representing the top contributor to the income pool.
Dividend income dropped by 25.5% to N5.96m from N8m in 2014 year. Finally, no income from other sources was recorded compared to N46.7m contributed by this source previously.
In the end, total income grew by only 16.4% from N115.6m to N134.6m. Then in view of the leap in expenses, profit before tax dropped to N38.3m as against N94.6m in 2014.
Fund manager, Mrs Adetola Fasuyi blamed the drop in income on the unexpected dive in the price of Seplat Petroleum PKC and Oando plc.
She said the trail blazing Seplat shares were quoted with high hopes at N576 per share in April 2014 but by March 2015, about 45% loss had been recorded.
Oando Plc  accessed the market for more funds raising high expectations but when not too long after the company lined up another rights issue to deleverage balance sheet, caution became the watchword.
SO:
* No matter what, the fact remains that the fund's expenses in 2015 far outgrew its increase in income and that is not healthy.
* Burst bubbles like Seplat and Oando pointed to,only place the burden of judgement back squarely on the fund manager.

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