Retail views

Nigeria

Monday, 08 June 2015

Daily Retail Report .

Market Review NSE witnessed a reversal in the upward trend seen at the last

trading session, as the benchmark index lost 22bps to close at

33,590.48bps with 3,481 deals. Sub-sectors showed mixed

performance. NSEIND and NSEINS closed positively on the back of

Wapco (+0.51%), Dangcem (+0.01%) and Wapic (+1.96%) while

OILGS, CNSM and BNK closed in negative territory on the backdrop

of Oando (-3.75%), Honyflour (-4.27%) and Skyebank (-2.70%).

ASI year-to-date return currently stands at -3.07%. Market

capitalization lost N25billion to close at N11.466Bn. At the close of

today’s session, 15 stocks advanced relative to 37 decliners while 51

remained unchanged. Top in the gainers’ chart are PZ (N30.66),

TRANSCORP (N2.97) and UBA (N5.33) while NAHCO (N5.81),

TRANSEXPR (N1.22) and BETAGLASS (N42.00) led the losers’ chart.

Great Nigeria Insurance Plc has released its Q3 unaudited financial

statements for the period ended 30th September, 2014. Gross

premium (N2.038Bn) and PAT (N380m) appreciated by 7% and 20%

respectively from prior period.

Equity Assurance released its FY results for the year ended 31st

December, 2014, Gross premium (N4.845Bn) appreciated by 5%

and PAT (N310m) appreciated by 185% from prior period.

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

NSE30 -0.21 -2.17 135.99

NSE BNK10 -0.27 -4.30 225.53

NSE CNSM10 -0.50 -0.41 113.72

NSE OILG5 -0.99 -5.61 206.34

NSE INS10 0.08 -2.04 24.42

NSE IND 0.15 0.31 28.91

Market Wrap

ASI -0.22% 33,590.48

Index year-to-date e -3.07%

Market Cap. N11.466Tril

Traded value 2.830Bn

Key gainers (%)

PZ 5.00

UBA 3.50

VITAFOAM 1.30

SEPLAT 0.30

DANGCEM 0.01

Key losers (%)

HONYFLOUR -4.27

OKOMUOIL -3.91

OANDO -3.75

GUINNESS -3.03

FIDELITY -2.67

NITTY

1M 10.5110

2M 11.4597

3M 11.4914

6M 13.4594

9M 14.1443

12M 14.3803

Crude oil spot price

Brent crude US$62.75

Contact information

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Mobile: 08068015502

Email: cslservice@fcmb.com

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Daily Retail Report

Page 2

Retail views

Stock Recommendations

Banking Comment

Current

Price

Target

Price

Potential

Upside %

EPS

FY

2014

1 Yr

forward

EPS

Last

Dividend(

N)

P/BV

2014

Yield FY

2014

Yield FY

2015e

Shares

Outstanding

(millions)

Year

End

ACCESS BANK Buy 6.05 7.70 27% 1.90 0.40 0.60 0.50 9.80% 1.0% 22883.00 Dec.DIAMOND BANK Buy 4.44 5.30 19% 1.70 0.30 0.10 0.50 2.20% 1.6% 14475.00 Dec.FIDELITY BANK PLC Buy 1.82 1.90 4% 0.20 0.10 0.18 0.30 9.60% 4.8% 28974.00 Dec.FBN HOLDINGS Buy 9.00 12.90 43% 2.50 0.00 0.10 0.60 1.10% 0.0% 32632.00 Dec.GUARANTY TRUST BANK Buy 27.29 28.40 4% 3.40 2.20 1.75 2.20 6.40% 3.9% 29431.00 Dec.STANBIC HOLDINGS Hold 28.95 32.40 12% 2.90 3.60 1.25 2.70 0.30% 3.9% 10000.00 Dec.STERLING BANK Hold 2.03 1.60 -21% 0.40 0.30 0.06 0.50 2.90% 6.3% 21592.00 Dec.SKYE BANK Under review 2.52 Under review 1.10 1.1 0.30 0.3 21.70% 21.7% 13219.00 Dec.U B A Buy 5.33 7.90 48% 1.60 0.50 0.10 0.70 1.90% 2.7% 32981.00 Dec.

ZENITH BANK Buy 19.80 24.60 24% 3.20 2.20 1.75 1.10 8.70% 4.6% 31396.00 Dec.

Food & Beverage EPS 2014EV/EBITDA (x)

2014

Yield FY 2014 Yield FY

2015eDANGOTE SUGAR REFINERY Under review 6.65 Under review 1.00 1.00 0.60 3.70 9.20% 9.2% 12000.00 Dec.CADBURY NIG. Under review 39.90 Under review 0.80 3.50 0.65 8.40 1.60% 5.2% 1878.00 Dec.FLOUR MILLS Hold 35.00 54.80 57% 1.90 3.50 1.60 6.80 2.10% 2.1% 2385.00 Mar.HONEYWELL FLOURMILLS Buy 3.81 5.20 36% 0.30 0.40 0.17 11.80 4.60% 4.6% 7930.00 Mar.NESTLE FOODS NIG. Hold 865.00 777.60 -10% 28.10 27.80 17.50 21.00 3.10% 2.8% 792.00 Dec.P Z INDUSTRIES Hold 30.66 34.60 13% 1.30 1.40 0.81 12.70 2.00% 2.2% 3970.00 MayU A C N Buy 41.70 72.60 74% 3.60 3.60 1.75 4.70 5.60% 5.6% 1920.00 Dec.UNILEVER NIGERIA PLC Sell 45.17 24.30 -46% 0.60 0.50 0.10 27.50 0.20% 0.2% 3783.00 Dec.

Building Materials EPS 2014eEV/EBITDA(x)

2014e

Yield FY

2014e

Yield FY

2015e

LAFARGE WAPCO PLC Under review 99.50 Under review 9.40 9.40 3.50 8.10 3.30% 3.3% 3001.00 Mar.

DANGOTE CEMENT Buy 177.01 198.40 12% 11.90 11.90 6.00 13.90 4.00% 4.0% 17040.00 Dec.

Breweries EPS 2014EV/EBITDA(x)

2014

Yield FY 2014 Yield FY

2015eGUINNESS NIG. Sell 160.00 111.00 -31% 6.30 6.30 7.00 9.10 1.90% 1.9% 1506.00 JuneINTERNATIONAL BREWERIES Hold 20.01 24.50 22% 1.30 1.30 0.30 16.20 2.30% 2.3% 3263.00 Mar.NIGERIAN BREWERIES Sell 147.20 127.70 -13% 5.60 5.60 3.50 13.20 3.20% 3.2% 7562.00 June

Agriculture EPS 2014EV/EBITDA(x)

2014e

Yield FY

2014e

Yield FY

2015e

OKOMU OIL Buy 29.21 41.50 42% 3.00 3.00 0.25 8.30 7.20% 7.2% 953.00 Dec.PRESCO PLC Buy 34.50 42.70 24% 1.62 1.60 0.10 10.50 1.50% 1.5% 1000.00 Dec.

Pharmaceuticals EPS 2014EV/EBITDA (x)

2013

Yield FY 2013 Yield FY

2015eGLAXOSMITHKLINE BEECHAM NIG. Buy 44.11 78.60 78% 1.90 4.30 0.75 12.30 1.70% 4.4% 957.00 Dec.

Oil & Gas EPS 2014EV/DACF(x)

2014Yield FY 2014 Yield FY

2015e

SEPLAT Buy 339.01 598.00 76% 0.58 0.87 3.10 4.70% 4.9% Dec.

Daily Retail Report

Page 3

Retail views

Top Highlight

Naira bonds

JP Morgan extends it GBI-EM deadline for Nigeria. Why?

At the beginning of this year JP Morgan announced that it was considering removing Nigeria from its index of emerging market local-currency

bonds, the GBI-EM Index, with a review period of three to five months. Nigeria had been included in the index in October 2012. Now JP Morgan is

announcing that it is extending its review period until the end of the year. The key issue for JP Morgan is liquidity in naira foreign exchange. We at CSL Stockbrokers have not encountered problems settling foreign

exchange in the equity market, so we doubt that JP Morgan’s issue lies with specific instances of remitting funds to overseas investors. Rather, it

is a matter of overall liquidity. Over-the-counter FX turnover fell from N3.3tn (US$16.6bn) in January to N1.7tn (US$8.6bn) in March according to

data from market data provider FMDQ.

The Central Bank of Nigeria in the last year has supplemented a policy of high rates and tight liquidity with multiple administrative measures.

These have stabilised the currency after its effective devaluation this year (see CSL Nigerian Monetary Policy Committee Preview – The FX

Conundrum, 23 March), but reduced liquidity.

In the political arena it is possible that the government of President Muhammadu Buhari will dramatically improve Nigeria’s fiscal outcome, with

benefits for the monetary side (eg, possibly stronger foreign exchange reserves). But the new government has only just come to power, and we

might only see benefits six months from now. JP Morgan’s has decided to wait and see.

Today’s news headlines JPMorgan may eject Nigeria from key bond index by December: JPMorgan will eject Nigeria from its Government Bond Index (GBI-EM) by the

year-end unless the country restores liquidity to its currency market in a way that will allow foreign investors tracking the benchmark to transact

with minimal hurdles.The international bank at the weekend said it had extended the deadline to eject Africa’s biggest economy by another six months to take into account the arrival of President Muhammadu Buhari. JPMorgan, which runs the most commonly used emerging debt indices

had placed Nigeria on a negative index watch in January and then said it would assess its place on the index over a three to five months period. Source: businessdayonline.com

46 stocks get revival boost in SEC’s new price-floor: The new par value rule introduced by the Securities and Exchange Commission (SEC) last

week is expected to revive the over 46 stocks that have been moribund for several years, with the attendant liquidity to both shareholders in the

stocks and the bourse, BusinessDay can now reveal. The SEC, Nigeria’s apex capital market regulator, had last week approved the Par Value Rule

submitted to it by the National Council of the Nigerian Stock Exchange, which revises the price floor of company shares traded on the Exchange to one kobo from the previous price floor of 50kobo. Source: businessdayonline.com

Sustainable practices: CBN considers incentives for banks: The Central Bank of Nigeria is working on a set of incentives for banks in the

country to apply sustainable banking practices. The Special Adviser to the CBN Governor on Sustainable Banking, Dr. Aisha Mahmood, revealed

this in Abuja during an interview with journalists to mark the World Environment Day. Source: punchng.com

Daily Retail Report

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Retail views

Important Risk Warnings and Disclaimers

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