daily retail report
TRANSCRIPT
Retail views
UBA Q4 results
Nigeria
Thursday, 26 March 2015
Daily Retail Report .
Market Review
The Nigerian Equity market continues to sustain the positive trend that
has prevailed the market in five straight sessions. The benchmark
index appreciated by 61bps to return 30,073.10 with 4,531 deals. Most
sub-sectors monitored by the NSE moved northward, except NSEIND
and NSEINS. On the back of gains recorded by Seplat (5.00%), FO
(2.26%), Mobil (0.71%) OILGAS led the gainers chart.
ASI year-to-date return currently stands at -11.01%, while market
capitalization added N61billion to return N10.035trillion. At the close of
today’s session, 26 stocks advanced relative to 30 decliners while 42
remained unchanged. Top in the gainers’ chart are UNILIVER (N37.48),
DANGFLOUR (N3.66) and TRANSEXPR (N1.06) while UBA (N3.83),
ETERNA (N2.59) and PRESCO (N26.47) led the losers’ chart.
See below for results announced today;
Company PAT Change% Dividend Closure Date
TOTAL NIGERIA PLC. 4.423bn -17 N9.00K 20 - 24 April 2015
UBA PLC 47.907bn 2.8 10K 07 - 09 April 2015
DANGOTE CEMENT PLC. 159.501bn -20.72
UNILEVER NIGERIA PLC. 2.412bn 49 10K 13 - 17 April 2015
The Trader still reiterates 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 0.93 1.69 -7.49
NSE BNK10 0.97 5.59 -6.61
NSE CNSM10 2.25 1.41 -7.98
NSE OILG5 2.02 -4.47 -7.19
NSE INS10 -0.36 3.20 -17.14
NSE IND -0.39 -2.03 -12.94
Market Wrap
ASI +0.61% 30,073.10
Index year-to-date e -11.01%
Market Cap. N10.035Tril
Traded value 7.188Bn
Key gainers (%)
UNILEVER 10.24
DANGFLOUR 9.91
SEPLAT 5.00
PZ 4.97
DANGSUGAR 4.96
Key losers (%)
UBA -4.96
PRESCO -4.72
STERLNBANK -4.59
STANBIC -3.45
DIAMONDBNK -2.68
NITTY
1M 14.4323
2M 14.5382
3M 15.0196
6M 15.4919
9M 15.8146
12M 16.4979
Crude oil spot price
Brent crude US$57.77
Contact information
Phone: 01-2713923; 01-2713920
Mobile: 08068015502
Email: [email protected]
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Daily Retail Report
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Retail views
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 5.65 7.70 36% 1.60 1.90 0.35 0.80 7.10% 11.5% 22883.00 Dec.DIAMOND BANK Buy 3.99 5.30 33% 2.00 1.70 0.30 0.60 5.40% 5.4% 14475.00 Dec.FIDELITY BANK PLC Buy 1.54 1.90 23% 0.30 0.50 0.14 0.30 7.40% 11.6% 28974.00 Dec.FBN HOLDINGS Buy 8.51 12.90 52% 2.20 2.30 1.10 0.80 10.00% 10.0% 32632.00 Dec.GUARANTY TRUST BANK Buy 23.20 28.40 22% 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 3.83 5.70 49% 1.40 1.50 0.50 0.70 10.10% 10.1% 32981.00 Dec.
ZENITH BANK Buy 17.01 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 6.77 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 33.50 54.80 64% 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 26.82 34.60 29% 1.20 1.30 0.19 7.80 2.70% 3.0% 3970.00 MayU A C N Buy 33.49 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 151.35 198.40 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 140.07 121.20 -13% 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 26.47 42.70 61% 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 [email protected]
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Retail views
Top Highlight
Credit Rating (2) - Standard & Poor’s downgrade of banks follows sovereign downgrade
On Friday, after market close, we published on Nigerian banks. It may come as a surprise, given the mounting risks facing the Nigerian economy,
but we are now positive on bank stocks, moving from six Hold and three Buy recommendations to seven Buy and two Hold recommendations. We
believe that the market is currently over discounting the risks facing the sector.
To test this thesis we model in an aggregate cost of risk (COR) for the sector, of 4.5% of Gross Loans in 2015e, which has the effect of reducing our
forecasts of Net Profits in 2015e by 56% in aggregate. This cost of risk is much higher than our previous forecast (1.1%), and much higher than recent guidance (which is generally below 1.5%), though significantly lower than what the same banks reported during the 2008-9 banking crisis
(in aggregate 6.9%).
Our point is that, in most cases, the banks will be able to absorb charges for non-performing loans (which is the COR) within their 2015e earnings,
according to our new forecasts.
By contrast the market, in some cases, is pricing in not only a loss of all earnings in 2015, but a contraction in equity bases too. The result is that some banks are trading at extremely low price-to-book (P/BV) valuations. For example, FBNH (Buy, current price N7.09/s, target price N12.86/s),
at 0.5x P/BV, is priced as if it will lose roughly half its equity. It trades at almost three standard deviations below its four-year average historic
P/BV rating.
Among the many risks to our investment thesis (which are detailed in the report) is the threat of currency devaluation. But we would term this the
threat of further currency devaluation, since at N189.7/US$1, the currency has already fallen 16.7% from the average N162.5/US$1 level of the first nine months of 2015e. We think that the medium-term floor to its value is N220.0/US$1, which is a further 16.0% lower. By contrast we see
much more potential upside in some bank stocks. The report, Nigerian Bank, Disaster Price in. Buy, 30 Jan 2015, is available to clients.
News Headlines
Buhari cleared to contest, eligibility suit deferred: By adjourning further hearing in the suit seeking to disqualify the presidential candidate of
the All Progressives Congress (APC), Major-General Muhammadu Buhari, to April 22 and 23, a Federal High Court in Abuja has finally cleared the
hurdle for him to participate in Saturday’s presidential poll. Four different plaintiffs had approached the court seeking to disqualify Buhari from
participating in the presidential poll over alleged certificate forgery and perjury. Source: thisdaylive.com
FG to secure $2bn World Bank, AfDB loan to fund budget: The Federal Government has said it will source $2 billion from the World Bank and
the African Development Bank (AfDB) under the 2012-2015 External Borrowing Plan to help in the implementation of the 2015 budget. The loan is
primarily targeted at addressing foreign exchange demand and strengthening of the naira, which has been devalued by the Central Bank of Nigeria
(CBN) following the increasing pressure on the local currency largely precipitated by a fall in the price of oil. Source: thisdaylive.com
Shell sells $1.7bn Nigerian assets to Aiteo: The Shell Petroleum Development Company of Nigeria Limited has announced the completion of the sale of its interest in Oil Mining Lease 29, the Nembe Creek Trunk Line and related facilities in the eastern Niger Delta. The company said its
interests in OML 29 and the NCTL were sold to Aiteo Eastern E&P Company Limited, with total cash proceeds of $1.7bn. The NCTL, which is
Nigeria’s major onshore pipeline, has been frequently attacked by oil thieves who drill holes into the pipeline to siphon off fuel. The persistent
sabotage of the pipeline, according to industry analysts, may have triggered the company’s divestment of its interest. Source: punchng.com
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Retail views
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