Retail views

UBA Q4 results

Nigeria

Tuesday, 14 April 2015

Daily Retail Report .

Market Review

The Nigerian Stock Exchange could not sustain the positive trend that has prevailed the market in three straight sessions. Sectorial indices monitored by the Exchange showed mixed performance leading to 42bps depreciation in the All Share Index. NSEBNK and NSECNSM closed in red as a result of the fall in UBN (-4.93), Zenithbank (-2.93) and heavyweight NESTLE (-4.42) while NSEINS, NSEIND and OILGS closed in positive terrain on the back of Wapco (+1.27%) Mansard (+4.92%) and FO (+3.61%). ASI year-to-date return currently stands at 1.27% as market capitalisation lost N50bn to close at 11.941Tril. Among the broad indices, volume and value of transactions depreciated by 28% and 21% respectively relative to previous figures as 248million units of shares valued at N3.664bn exchange hands. Top in the gainers territory are LIVESTOCK (N2.41), VITAFOAM (N4.43) and AIRSERVICE (N2.10) while FIDSON (N3.23), UBN (N10.41), PORTPAINT (N3.33) led the losers’ list We reiterate that these are buying times for investors with long term perspective, engage defensive stocks with healthy performance.

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

NSE30 -0.59 12.47 22.89

NSE BNK10 -2.34 10.40 43.01

NSE CNSM10 -0.02 14.65 17.52

NSE OILG5 0.32 11.03 39.16

NSE INS10 1.11 2.97 -7.30

NSE IND 0.65 12.90 -11.39

Market Wrap

ASI -0.42% 35,043.44

Index year-to-date e 1.27%

Market Cap. N11.941Tril

Traded value 3.664Bn

Key gainers (%)

LIVESTOCK 6.17

VITAFOAM 5.48

OKOMUOIL 5.00

GUINNESS 4.99

INTBREW 4.99

Key losers (%)

UBN -4.93

TOTAL -4.44

NESTLE -4.42

PRESCO -3.75

UBA -3.27

NITTY

1M 12.6672

2M 13.8368

3M 13.9793

6M 14.2487

9M 15.0803

12M 15.2859

Crude oil spot price

Brent crude US$58.23

Contact information

Phone: 01-2714834 ; 01-2713920(3)

Mobile: 08068015502

Email: cslservice@fcmb.com

Open Account: Click here to register

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 6.60 7.33 11% 1.90 0.40 0.60 0.70 9.19% 0.8% 22883.00 Dec.DIAMOND BANK Buy 4.54 5.27 16% 1.54* 0.30 0.10 0.43* 7.5*% 1.8% 14475.00 Dec.FIDELITY BANK PLC 2.13 1.86 -13% 0.45* 0.33 0.18 0.22* 10.8*% 6.9% 28974.00 Dec.FBN HOLDINGS Buy 9.50 12.86 35% 2.54 0.04 0.10 0.58 1.10% 0.0% 32632.00 Dec.GUARANTY TRUST BANK Buy 28.00 28.42 2% 3.40 2.10 1.75 1.90 7.20% 7.3% 29431.00 Dec.STANBIC HOLDINGS Hold 30.00 32.37 8% 2.98* 3.60 1.25 2.3* 3.7*% 4.3% 10000.00 Dec.STERLING BANK Hold 2.29 1.57 -31% 0.34* 0.26 0.06 0.8* 6.5*% 5.2% 21592.00 Dec.SKYE BANK Under review 2.58 Under review Under review 0.30 Under review 20.7% 13219.00 Dec.U B A Buy 4.74 5.70 20% 1.29* 0.44 0.10 0.44* 11.3*% 4.0% 32981.00 Dec.

ZENITH BANK Buy 23.20 24.60 6% 3.17 2.16 1.75 1.20 8.20% 4.3% 31396.00 Dec.

Food & BeverageEV/EBITDA (x)

2014

Yield FY 2014

DANGOTE SUGAR REFINERY Under review 7.18 Under review 0.60 7.4% 12000.00 Dec.CADBURY NIG. Under review 41.52 Under review 0.65 4.7% 1878.00 Dec.FLOUR MILLS Hold 34.00 54.80 61% 1.93 3.50 1.60 7.10 3.60% 1.8% 2385.00 Mar.HONEYWELL FLOURMILLS Buy 3.20 5.20 63% 0.30 0.17 4.7% 7930.00 Mar.NESTLE FOODS NIG. Under review 948.00 Under review 38.00 17.50 34.5* 2.10% 4.6% 792.00 Dec.P Z INDUSTRIES Hold 27.20 34.60 27% 0.81 3.0% 3970.00 MayU A C N Buy 39.00 72.60 86% 1.75 4.7% 1920.00 Dec.UNILEVER NIGERIA PLC Sell 41.62 31.80 -24% 0.64 2.11 0.10 0.30% 5.0% 3783.00 Dec.

Building Materials EPS 2014eEV/EBITDA(x)

2014e

Yield FY

2014e

LAFARGE WAPCO PLC Under review 94.20 Under review 3.50 3.30% 3.3% 3001.00 Mar.

DANGOTE CEMENT Buy 180.00 198.40 9.07 9.87 6.00 13.00 3.60% 3.5% 17040.00 Dec.

Breweries EPS 2014EV/EBITDA(x)

2014

Yield FY 2014

GUINNESS NIG. Sell 154.34 111.00 -28% 6.30 2.70 7.00 9.30 5.40% 2.5% 1506.00 JuneINTERNATIONAL BREWERIES Hold 20.63 24.50 19% 0.30 1.5% 3263.00 Mar.NIGERIAN BREWERIES Sell 172.00 121.20 -30% 5.62 6.40 3.50 10.80 4.50% 3.5% 7562.00 June

Agriculture EPS 2013eEV/EBITDA(x)

2014e

Yield FY

2014e

OKOMU OIL Buy 27.31 41.50 52% 2.20 3.00 0.25 9.00 3.20% 6.7% 953.00 Dec.PRESCO PLC Buy 25.70 42.70 66% 1.29 1.60 0.10 9.20 0.40% 1.7% 1000.00 Dec.

PharmaceuticalsEV/EBITDA (x)

2013

Yield FY 2013

GLAXOSMITHKLINE BEECHAM NIG. Buy 56.26 78.60 40% 3.10 4.30 0.75 8.90 2.50% 3.8% 957.00 Dec.

Oil & GasEV/DACF(x)

2014Yield FY 2014

SEPLAT Buy 385.00 756.00 96% 0.58 0.87 3.10 4.70% 4.9% Dec.

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

Daily Retail Report

Page 3

Retail views

Top Highlight

Telecoms- MTN set to acquire Visafone Communications Limited.

According to reports from Bloomberg, the Mobile Telephone Networks (MTN) Group (MTN, N/R) has begun the process of acquiring Visafone

Communications Limited. MTN Group, Africa’s biggest mobile phone company, has been exploring acquisitions as it seeks to boost revenue from

data outside South Africa. Out of four existing mobile operators in Nigeria, MTN Nigeria is the leader with c.44% market share as of December 2014.

Although details of the deal have not been disclosed by either of the firms, it is believed that MTN is investing in Visafone’s data services. With

increased competition within the mobile operations market, especially in the areas of voice calls and short message services, MTN Nigeria has

increasingly turned to opportunities in data sales, e-commerce, and mobile money banking to defend its market share.

Visafone was set up eight years ago by the Ex-managing director and current chairman of Zenith Bank Jim Ovia, and has grown its subscriber

base to 2.2m as at December 2014 from the 30,000 in December 2007. It is currently the only Code Division Multiple Access (CDMA) service

provider in Nigeria. We believe Visafone’s CDMA technology platforms, being smaller, is struggling to compete with the larger top-tier GSM

networks. The company also faces competition in the data business from LTE service providers such as Spectranet, Swift Networks, and Smile

Nigeria.

News Headlines

Power supply falls to 2,988MW: Power supply from the national grid again slumped below the 3,000-megawatts mark to 2,988.72MW on Sunday

on the back of gas shortfall and lower water supply to the nation’s thermal and hydropower plants respectively, our correspondent learnt on Monday. Gas-fired power plants generate about 70 per cent of the nation’s electricity, while the balance is derived from hydro power plants,

including the Kainji and Jebba power stations, which have a combined installed capacity of 1,330MW. The downturn in power generation has

exacerbated outages and load-shedding being experienced in many parts of the country, and reversed the recent slight improvement seen after

supply fell to 2,767.45MW exactly one month ago. Source: punchng.com

World Bank backs Buhari to probe NNPC, others: The World Bank has thrown its weight behind President-elect, Maj.-Gen. Muhammadu Buhari (retd.), to probe the Nigerian National Petroleum Corporation over allegations of missing funds. Speaking in a video conference from Washington to

journalists from across Africa on the release of the bank’s analysis of issues shaping the continent entitled, ‘Africa’s Pulse’, top officials of the bank

commended President Goodluck Jonathan for exhibiting political maturity after the 28 March presidential election that would end the tenure of his

administration on 29 May. The World Bank’s Chief Economist for Africa, Mr. Francisco Ferreira, said looking into financial records of the country,

especially allegation of corruption at the NNPC, would check impunity and build public institutions in the future. Source: punchng.com

29 May: FG transition committee meets: Ahead of the May 29th handover, the transition committee on Monday held its inaugural meeting to

develop the needed modalities. The transition committee is expected to see to the smooth exit and handover of the outgoing government to the

incoming, in respect of briefs and handover notes. Source: businessdayonline.com

Daily Retail Report

Page 4

Retail views

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.

The information contained in this document is confidential and is solely for use of those persons to whom it is addressed and may not be reproduced, further distributed to any other person or published, in whole or in part, for any purpose.

© CSLS 2013. All rights reserved CSL STOCKBROKERS LIMITED Member of the Nigerian Stock Exchange First City Plaza, 44 Marina, PO Box 9117, Lagos State, NIGERIA