Retail views

UBA Q4 results

Nigeria

Wednesday, 25 March 2015

Daily Retail Report .

Market Review

The bulls sustained dominance at the Nigerian Stock Exchange as the benchmark index appreciated by 103bps to return 29, 889.91bps with 3,915 deals. All sub-sectors monitored by the NSE closed in green with OILGS leading the pack with FO (5.00%), Total (2.86%) and Oando (2.04%) while NSEIND was the most hit as Cutix (-4.61%) and Dangcem (-0.18% ) shed points.

ASI year-to-date return currently stands at -11.62%, while market

capitalization added N102billion to return N9.974trillion. At the

close of today’s session, 33 stocks advanced relative to 23 decliners

while 67 remained unchanged. Top in the gainers’ chart are

DANGFLOUR (N3.33), TRANSCORP (N2.89) and AFRIPRUD (N2.52)

while ACCESS (N5.60), REDSTAREX (N3.75) and STERLNBANK

(N2.18) led the losers’ chart.

Sterling Bank Plc released its FY results for the period 31st

December, 2014. Gross earnings (N103.679Bn) appreciated by 13%

and PAT (N9.004Bn) rose significantly by 9% from the prior ended.

Sterling bank Plc has proposed a dividend of 6kobo per share.

Trader still reiterate that value investors are advised to take up buying opportunities as stock prices remain fairly priced.

Sector Report Today(%) Month-To-Date(%) Year-To-Date(%)

NSE30 1.34 0.76 -7.49

NSE BNK10 1.55 4.62 -6.61

NSE CNSM10 1.30 -0.84 -7.98

NSE OILG5 1.88 -6.49 -7.19

NSE INS10 0.31 3.56 -17.14

NSE IND -0.05 -1.64 -12.94

Market Wrap

ASI +1.03 29,907.66

Index year-to-date e -11.62

Market Cap. N9.974Tril

Traded value 4.004Bn

Key gainers (%)

DANGFLOUR 9.90

TRANSCORP 9.89

FO 5.00

UBN 4.99

ZENITHBANK 4.97

Key losers (%)

ACCESS -5.08

REDSTAREX -4.82

STERLNBANK -4.80

MOBIL -3.45

UBCAP -0.74

NITTY

1M 14.4759

2M 14.6762

3M 14.8070

6M 15.6987

9M 15.7164

12M 16.6143

Crude oil spot price

Brent crude US$55.99

Contact information

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Mobile: 08068015502

Email: cslservice@fcmb.com

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Stock Recommendations

Banking Comment

Current

Price

Target

Price

Potential

Upside %

EPS

FY

2013

1 Yr

forward

EPS

Last

Dividend

(N)

P/BV

2013

Yield FY

2013

Yield FY

2014e

Shares

Outstanding

(millions)

Year

End

ACCESS BANK Buy 5.60 7.70 38% 1.60 1.90 0.35 0.80 7.10% 11.5% 22883.00 Dec.DIAMOND BANK Buy 4.10 5.30 29% 2.00 1.70 0.30 0.60 5.40% 5.4% 14475.00 Dec.FIDELITY BANK PLC Buy 1.48 1.90 28% 0.30 0.50 0.14 0.30 7.40% 11.6% 28974.00 Dec.FBN HOLDINGS Buy 8.59 12.90 50% 2.20 2.30 1.10 0.80 10.00% 10.0% 32632.00 Dec.GUARANTY TRUST BANK Buy 22.60 28.40 26% 3.20 3.30 1.45 2.20 6.90% 7.3% 29431.00 Dec.STANBIC HOLDINGS Hold 29.00 32.40 12% 1.90 2.60 1.20 3.10 2.70% 3.5% 10000.00 Dec.STERLING BANK Hold 2.18 1.60 -27% 0.40 0.40 0.25 0.80 10.90% 8.7% 21592.00 Dec.SKYE BANK Under review 2.45 Under review #VALUE! 1.20 1.10 0.30 0.30 11.10% 20.7% 13219.00 Dec.U B A Buy 4.03 5.70 41% 1.40 1.50 0.50 0.70 10.10% 10.1% 32981.00 Dec.

ZENITH BANK Buy 17.00 24.60 45% 3.00 3.00 1.75 1.30 8.10% 8.3% 31396.00 Dec.

Food & BeverageEV/EBITDA (x)

2013

Yield FY

2013eDANGOTE SUGAR REFINERY Under review 6.45 Under review N/A 0.89 1.20 0.60 4.70 7.40% 7.4% 12000.00 Dec.CADBURY NIG. Under review 39.23 Under review N/A 2.90 3.20 1.30 7.60 0.00% 4.7% 1878.00 Dec.FLOUR MILLS Hold 33.06 54.80 66% 2.90 3.50 1.60 8.90 3.30% 4.0% 2385.00 Mar.HONEYWELL FLOURMILLS Buy 3.00 5.20 73% 0.40 0.30 0.17 12.00 5.70% 4.7% 7930.00 Mar.NESTLE FOODS NIG. Hold 800.00 777.60 -3% 28.10 31.30 24.00 24.90 2.60% 3.0% 792.00 Dec.P Z INDUSTRIES Hold 25.55 34.60 35% 1.20 1.30 0.19 7.80 2.70% 3.0% 3970.00 MayU A C N Buy 33.48 72.60 117% 2.90 3.60 1.75 5.40 4.00% 4.7% 1920.00 Dec.UNILEVER NIGERIA PLC Sell 34.00 31.80 -6% 1.30 1.60 1.25 13.70 3.80% 3.8% 3783.00 Dec.

Building Materials EPS 2013eEV/EBITDA(x)

2013e

Yield FY

2013e

LAFARGE WAPCO PLC Under review 84.00 Under review N/A 9.40 9.40 3.30 8.20 3.30% 3.3% 3001.00 Mar.

DANGOTE CEMENT Buy 152.60 198.40 N/A 11.80 11.90 7.00 16.10 3.40% 3.5% 17040.00 Dec.

Breweries EPS 2013eEV/EBITDA(x)

2013e

Yield FY

2013eGUINNESS NIG. Sell 127.00 111.00 -13% 7.90 5.90 7.00 14.50 4.30% 3.0% 1506.00 JuneINTERNATIONAL BREWERIES Hold 18.00 24.50 36% 0.90 1.30 0.30 16.20 1.00% 1.5% 3263.00 Mar.NIGERIAN BREWERIES Sell 136.00 121.20 -11% 5.70 5.60 4.50 13.30 2.90% 2.1% 7562.00 June

Agriculture EPS 2013eEV/EBITDA (x)

2013e

Yield FY

2013e

OKOMU OIL Buy 28.42 41.50 46% 2.20 3.00 1.00 9.00 3.20% 6.7% 953.00 Dec.PRESCO PLC Buy 27.78 42.70 54% 1.29 1.60 0.10 9.20 0.40% 1.7% 1000.00 Dec.Pharmaceuticals EV/EBITDA (x)

2013

Yield FY 2013

GLAXOSMITHKLINE BEECHAM NIG. Buy 42.00 78.60 0.87 3.10 4.30 1.30 8.90 2.50% 3.8% 957.00 Dec.

Note – for full report on the recommended stocks kindly send an email to cslcsu@firstcitygroup.com

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Retail views

Top Highlight

MPC meeting- Calm for now, but we expect action soon after elections

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) concluded its regular two-day meeting yesterday with a unanimous

vote to retain the Monetary Policy Rate (MPR) at 13.0%, the Cash Reserve Requirement (CRR) on private sector deposits at 20.0%, the CRR on

public sector deposits at 75.0%, and to retain banks’ mandatory liquidity ratios at 30.0%.

In other words, no change, just as we (see CSL, Nigerian Monetary Policy Committee Preview, the FX conundrum, 23 Mar 2015), and

doubtless the rest of the market, expected. National banks tend not to make dramatic changes just before elections (general elections are due on

28 March and 11 April). A fair proportion of the communiqué was taken up with the recent rise in inflation from 8.2% y/y in January to 8.4% y/y

in February.

This is an interesting stance in view of the fact that gross foreign exchange reserves have fallen from US$34.47bn at the beginning of the year to

US$29.92bn currently (as reported by Bloomberg), and have fallen by US$2.52bn since the CBN made a significant administrative adjustment –

the withdrawal of its retail of the retail dutch auction system (RDAS) – on 18 February. (FX reserves were US$37.88bn a year ago.)

Post-elections, we believe the CBN will be more outspoken than before in managing currency expectations. Depending on the

state of security, politics and capital flows at that time we expect the CBN either to stick to the current naira rate (today N199.0/US$1.0) or to choose a new rate to defend, using interest rates and further administrative tools as necessary. Our base

case is an exchange rate of N220.0/US$1.0 to emerge in H1 2015.

News Headlines

CBN holds rates at 13 pct, worried by economic growth outlook: The Central Bank of Nigeria left its benchmark interest rate unchanged at

13% as expected on Tuesday, saying tight monetary policy should offset the inflationary effects of elevated spending ahead of a 28 March election.

Governor Godwin Emefiele said the Monetary Policy Committee was also satisfied with the bank’s attempts to stabilise the naira. Source:

businessdayonline.com

Skye Bank issues N100bn(US$500m) Commercial Paper: Skye Bank Plc Tuesday signed an agreement with Stanbic IBTC and the Financial Market Dealers Quotation System (FMDQ) to issue N100 billion in commercial paper to increase its ability to do more transactions. The first

tranche of the transaction in the size of N20 billion, opened on Monday and is expected to close on March 27th, 2015. Group Managing

Director/Chief Executive Officer of the bank, Mr. Timothy Oguntayo explained that the bank took advantage of the commercial paper window to

expand the number of instruments on its balance sheet. Source: thisdaylive.com

FG’s revenue hits N711 billion (US$3.6bn) in January: Nigeria’s estimated federally collected revenue stood at N710.78 billion as at January 2015, the Central Bank of Nigeria (CBN) has revealed. According to the central bank’s economic report for January 2015 obtained from its website,

the amount generated by the federal government was above the receipts in the preceding month as well as the the corresponding period of 2014,by

4.6 and 4.3 per cent, respectively. The increase relative to receipts in the preceding month was due to the respective increase of 3.9 and 6.2 per

cent in gross oil and non-oil revenue during the review period. Source: thisdaylive.com

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Important Risk Warnings and Disclaimers CSL STOCKBROKERS LIMITED (CSLS) is regulated and authorized by the Securities and Exchange Commission (SEC) of Nigeria and the Nigerian Stock Exchange (NSE). The details of the authorization can be viewed at the SEC Website at http://www.sec.gov.ng/consolidated-list-of-capital-market-operators.html and at the NSE Website at http://www.nse.com.ng/Regulation/ForBrokers/Pages/Dealing-Members.asp. RELIANCE ON THIS NOTE FOR THE PURPOSE OF ENGAGING IN ANY INVESTMENT ACTIVITY MAY EXPOSE YOU TO A SIGNIFICANT RISK OF LOSS. By receiving this document, you will not be deemed a client or provided with the protections afforded to clients of CSLS. When distributing this document, CSLS or any member of the First City Group is not acting for any recipient of this document and will not be responsible for providing advice to any recipient in relation to this document. Accordingly, CSLS will not be responsible to any recipient for providing the protections afforded to its clients. If you are in the UK, the protections of the Financial Services and Markets Act 2000 (FSMA) or Financial Conduct Authority (FCA) do not apply to any investment activity engaged in as a result of this communication; and any resulting transaction would not fall within the jurisdiction of any FSMA or FCA dispute resolution or compensation scheme. By accepting this document you confirm that you are so aware of the above stated. If you do not accept the above stated and/or if the distribution of this document is otherwise unlawful where you are, you are required to return the document immediately to CSLS. This document is not an offer to buy or sell or to solicit an offer to buy or sell any security. This document does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The appropriateness of a particular investment will depend on an investor’s individual circumstances and objectives. The investments and shares referred to in this document may not be suitable for all investors. CSLS is a member of the FCMB Group Plc (“the Group”), a group of companies which includes First City Monument Bank Ltd., FCMB Capital Markets Ltd, First City Asset Management and FCMB UK. Either CSLS or any other member of the Group may effect transactions in shares mentioned herein, may take proprietary trading positions in those shares, and may receive remuneration for the publication of its research and for other services. Accordingly, this document may not be considered as objective or impartial. Additionally, information may be available to CSLS or the Group, which is not reflected in this material. Further information on CSLS’ policy regarding potential conflicts of interest in the context of investment research and CSLS’ policy on disclosure and conflicts in general are available on request. This document is based on information obtained from sources it believes are reliable but which it has not independently verified. Neither CSLS nor its advisors, directors or employees make any guarantee, representation or warranty as to its accuracy, reasonableness or completeness and neither CSLS nor its advisors, directors or employees accepts any responsibility or liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. The opinions contained in this document are subject to change without notice and not to be relied upon and should not be used in substitution for the exercise of independent judgment. Past performance is not a guarantee of future performance. Investments may go down in value as well as up and you may not get back the full amount invested. Where an investment is denominated in a currency other than the local currency of the recipient of the research report, changes in the exchange rates may have an adverse effect on the value, price or income of that investment. In case of investments for which there is no recognized market it may be difficult for investors to sell their investments or to obtain reliable information about its value or the extent of the risk to which it is exposed.

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