Retail views

UBA Q4 results

Nigeria

Wednesday, 11 March 2015

Daily Retail Report .

Market Review The NSE witnessed a reversal of recent upward trend as the benchmark index lost a whooping 155bps to close at 30,869.17bps. Profit taking activities led to the southward move of all sectorial indices with the banking sector leading the pack as it recorded 290bps loss by Guaranty (-4.98%), UBN (-4.98%), Zenithbank (-4.97%), Diamondbnk (-4.91%) and Skyebank (-4.82%). ASI year-to-date return currently stands at -10.57%. Among the broad indices, Volume and Value of transactions depreciated by 1% and 27% relative to previous session. Top worst performers were UBCAP (N1.73), CAVERTON (N2.95) and ASHAKACEM (N 18.79) while HONYFLOUR (N2.66), FO (N192.86) and NCR (N12.19) Furtherance to releasing their FY results, Africa Prudential Registrars ltd declared a dividend payment of N0.35kobo which represents a 10.45% dividend yield at today’s closing price. Investors should look out for opportunities as the market experiences further decline at the next trading session.

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

NSE30 -2.02 3.14 -7.91

NSE BNK10 -2.90 9.74 -3.73

NSE CNSM10 -2.18 0.02 -10.38

NSE OILG5 -1.87 -3.30 0.85

NSE INS10 -0.71 1.14 -9.34

Market Wrap

ASI -0.15% 30,869.17

Index year-to-date -10.57%

Market Cap. N10.300Tril

Traded value 3.855Bn

Key gainers (%)

UBCAP 9.49

ASHAKACEM 4.97

FIDELITY 4.64

MAYBAKER 4.40

UBA 3.93

Key losers (%)

HONYFLOUR -5.00

FO -5.00

GUARANTY -4.98

ZENITHBANK -4.97

STANBIC -4.82

NITTY

1M 14.1901

2M 14.5006

3M 14.8698

6M 14.4954

9M 15.6678

12M 16.0289

Crude oil spot price

Brent crude US$56.82

Contact information

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Mobile: 08068015502

Email: cslservice@fcmb.com

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Page 2

Retail views

0 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 6.50 7.73 19% 1.60 1.90 0.35 0.80 7.10% 11.5% 22883.00 Dec.DIAMOND BANK Buy 4.26 5.27 24% 2.00 1.70 0.30 0.60 5.40% 5.4% 14475.00 Dec.FIDELITY BANK PLC Buy 1.58 1.86 18% 0.30 0.50 0.14 0.30 7.40% 11.6% 28974.00 Dec.FBN HOLDINGS Buy 8.51 12.86 51% 2.20 2.30 1.10 0.80 10.00% 10.0% 32632.00 Dec.GUARANTY TRUST BANK Buy 24.23 28.42 17% 3.20 3.30 1.45 2.20 6.90% 7.3% 29431.00 Dec.STANBIC HOLDINGS Hold 26.65 32.37 21% 1.90 2.60 1.20 3.10 2.70% 3.5% 10000.00 Dec.STERLING BANK Hold 2.23 1.57 -30% 0.40 0.40 0.25 0.80 10.90% 8.7% 21592.00 Dec.SKYE BANK Under review 2.37 -100% 1.20 1.10 0.30 0.30 11.10% 20.7% 13219.00 Dec.U B A Buy 4.23 5.70 35% 1.40 1.50 0.50 0.70 10.10% 10.1% 32981.00 Dec.

ZENITH BANK Buy 20.67 24.60 19% 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 6.80 Under review N/A 0.89 1.20 0.60 4.70 7.40% 7.4% 12000.00 Dec.CADBURY NIG. Under review 41.28 Under review N/A 2.90 3.20 1.30 7.60 0.00% 4.7% 1878.00 Dec.FLOUR MILLS Hold 34.01 54.80 61% 2.90 3.50 1.60 8.90 3.30% 4.0% 2385.00 Mar.HONEYWELL FLOURMILLS Buy 2.66 5.20 95% 0.40 0.30 0.17 12.00 5.70% 4.7% 7930.00 Mar.NESTLE FOODS NIG. Hold 820.00 821.80 0% 28.10 31.30 24.00 24.90 2.60% 3.0% 792.00 Dec.P Z INDUSTRIES Hold 27.43 34.60 26% 1.20 1.30 0.19 7.80 2.70% 3.0% 3970.00 MayU A C N Buy 36.73 72.60 98% 2.90 3.60 1.75 5.40 4.00% 4.7% 1920.00 Dec.UNILEVER NIGERIA PLC Sell 34.86 31.80 -9% 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 89.00 Under review N/A 9.40 9.40 3.30 8.20 3.30% 3.3% 3001.00 Mar.

DANGOTE CEMENT Buy 153.55 258.50 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 128.58 111.00 -14% 7.90 5.90 7.00 14.50 4.30% 3.0% 1506.00 JuneINTERNATIONAL BREWERIES Hold 18.01 24.50 36% 0.90 1.30 0.30 16.20 1.00% 1.5% 3263.00 Mar.NIGERIAN BREWERIES Sell 140.06 121.20 -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 30.60 41.50 36% 2.20 3.00 1.00 9.00 3.20% 6.7% 953.00 Dec.PRESCO PLC Buy 29.24 42.70 46% 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 40.00 78.60 0.97 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

Daily Retail Report

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Retail views

Top Highlight

Government Revenues

A case for diversifying states’ revenues away from oil

Yesterday, Business day newspaper reported that some state governments were finding it difficult to pay monthly salaries to their workers due to a

reduction in monthly allocations from the Federal Account. Around noon yesterday, local media began to carry stories of protests by civil servants

in Osun State (South West) who were allegedly owed five months’ salary arrears.

We first understood the extent of the financial difficulties being experienced by state governments in December 2014, when it was reported that 11

state governments were unable to fund workers’ salaries. Most state governments rely on monthly allocations from the Federation Account

Allocation Committee (FAAC) to meet their monthly overheads and to finance capital projects. However, there are a few exceptions such as Lagos

and Rivers states which have been able to significantly grow their internally-generated revenues (see CSL Nigeria Daily 23 September 2014).

FAAC allocations originate mainly from crude oil sales proceeds to the federal account. Since June 2014, when crude oil prices began to slide,

monthly allocations have trended downwards. Oil has fallen by 46.5% from 1 June 2014-to-date thought it is up by some 5.0 % year-to-date.

FAAC allocations for January 2015 stood at N500.1bn (US$2.5bn), their lowest level since the beginning of 2014 and 21% lower than the one-year

median of N629.1bn. We believe the direction of oil prices will continue to serve as a useful proxy for the quantum of monthly FAAC allocations.

Today’s news headlines

Military moves to liberate Bama: The Nigerian Army has launched a major operation to liberate the strategic town of Bama, Borno State from

Boko Haram insurgents. Investigation revealed on Tuesday that deployment of ground forces and equipment was preceded by days of targeted

aerial operations in Bama and its environs. An intelligence source, who made this known, said that the military was expecting a productive result from Bama which was captured by the insurgents in September last year. Source: punchng.com

6.39 million workers register for Contributory Pension Scheme: About 6.39 million public and private sector workers in the country are

registered for the Contributory Pension Scheme, an investigation has revealed. Statistics obtained from the National Pension Commission on

Tuesday revealed that the 6.39 million contributors was for the 2014 financial year, rising progressively from 5.3 million and 5.9 million in 2012

and 2013, respectively. Source: punchng.com

Why we discourage states from borrowing – FG: The Federal Government on Tuesday explained that it was discouraging state governments from

borrowing because most of them were experiencing difficulties in servicing their existing debts. The Federal Government had last year directed that Deposit Money Banks must always get approval from the Ministry of Finance before granting loans to any state government. The directive has

made it difficult for states to get loans from the banks for developmental purposes. Figures released by the Debt Management Office put Nigeria’s

debt profile as of December 31, 2014 at $67.72bn (N11.24tn), which was about N1.2trn higher than the 2013 debt stock of N10.04tn. Source:

punchng.com

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Retail views

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