Retail views

UBA Q4 results

Nigeria

Monday, 20 April 2015

Daily Retail Report .

Market Review

The NSE witnessed a reversal in the upward trend seen at the last

trading session, as the benchmark index lost 78bps to close at

34,730.95bps with 4,491 deals. All sub-sectors monitored by the

exchange showed mixed performance. NSEBNK and NSEINS added

gains on the back of ACCESS (3.77%), ETI (1.95%), Wapic (3.92%)

and Royalex (3.85%) while NSECNSM, NSEIND and OILGS closed in

negative terrain on the backdrop of Dangflour (-4.95%), Unilever (-

4.10%), GUINNESS (-1.18%), and FO (-2.08%)

ASI year-to-date Figure struggles to remain positive at 0.39%.

Market capitalization lost N94bn to close at 11.834Tril. At the close

of today’s session, 32 stocks advanced relative to 22 decliners while

44 remained unchanged. Top in the gainers’ chart are NASCON

(N8.92) FLOURMILL (N35.70) ASHAKACEM (N21.02) while

FIDELITYBK (N1.94) COSTAIN (N0.95) TOTAL (N171.00) led the

losers’ chart.

Dangote Sugar released its FY 2014 result for the year ended 31st

Dec. 2014. Revenue (N94.855b) and PAT (N1.635b) declined by

8.16% and 12.03% respectively from prior period. The company

proposes a 40kobo dividend payment

We believe that the current sentiment among investors, there is limited downward potential in stock prices.

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

NSE30 -0.42 11.92 27.24

NSE BNK10 0.37 12.77 50.03

NSE CNSM10 -0.40 12.43 21.22

NSE OILG5 -0.16 11.84 45.59

NSE INS10 0.28 2.00 -6.08

NSE IND -1.30 9.39 -9.84

Market Wrap

ASI -0.78% 34,730.95

Index year-to-date E 0.39%

Market Cap. N11.834Tril

Traded value 2.697Bn

Key gainers (%)

FLOURMILL 5.00

ASHAKACEM 5.00

FBNH 3.56

OANDO 2.92

ZENITH 0.87

Key losers (%)

FIDELITYBK -8.92

TOTAL -5.00

DANGFLOUR -4.95

UNILEVER -4.10

7UP -4.06

NITTY

1M 12.1072

2M 12.4877

3M 12.5992

6M 12.6797

9M 13.3708

12M 14.2491

Crude oil spot price

Brent crude US$63.27

Contact information

Phone: 01-2713923; 01-2713920

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 6.89 7.33 6% 1.90 0.40 0.60 0.70 9.19% 0.8% 22883.00 Dec.DIAMOND BANK Buy 4.50 5.27 17% 1.54* 0.30 0.10 0.43* 7.5*% 1.8% 14475.00 Dec.FIDELITY BANK PLC 1.94 1.86 -4% 0.45* 0.33 0.18 0.22* 10.8*% 6.9% 28974.00 Dec.FBN HOLDINGS Buy 10.19 12.86 26% 2.54 0.04 0.10 0.58 1.10% 0.0% 32632.00 Dec.GUARANTY TRUST BANK 28.82 28.42 -1% 3.40 2.10 1.75 1.90 7.20% 7.3% 29431.00 Dec.STANBIC HOLDINGS Hold 29.00 32.37 12% 2.98* 3.60 1.25 2.3* 3.7*% 4.3% 10000.00 Dec.STERLING BANK Hold 2.20 1.57 -29% 0.34* 0.26 0.06 0.8* 6.5*% 5.2% 21592.00 Dec.SKYE BANK Under review 2.51 Under review Under review 0.30 Under review 20.7% 13219.00 Dec.U B A Buy 5.00 5.70 14% 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 7.30 Under review 0.60 7.4% 12000.00 Dec.CADBURY NIG. Under review 41.01 Under review 0.65 4.7% 1878.00 Dec.FLOUR MILLS Hold 35.70 54.80 54% 1.93 3.50 1.60 7.10 3.60% 1.8% 2385.00 Mar.HONEYWELL FLOURMILLS Buy 3.33 5.20 56% 0.30 0.17 4.7% 7930.00 Mar.NESTLE FOODS NIG. Under review 940.00 Under review 38.00 17.50 34.5* 2.10% 4.6% 792.00 Dec.P Z INDUSTRIES Hold 27.00 34.60 28% 0.81 3.0% 3970.00 MayU A C N Buy 41.28 72.60 76% 1.75 4.7% 1920.00 Dec.UNILEVER NIGERIA PLC Sell 41.65 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 90.00 Under review 3.50 3.30% 3.3% 3001.00 Mar.

DANGOTE CEMENT Buy 174.01 198.40 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 168.00 111.00 -34% 6.30 2.70 7.00 9.30 5.40% 2.5% 1506.00 JuneINTERNATIONAL BREWERIES Hold 20.71 24.50 18% 0.30 1.5% 3263.00 Mar.NIGERIAN BREWERIES Sell 160.84 121.20 -25% 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 27.24 41.50 52% 2.20 3.00 0.25 9.00 3.20% 6.7% 953.00 Dec.PRESCO PLC Buy 26.25 42.70 63% 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

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Retail views

Top Highlight

Petrol subsidy: Government’s indebtedness to petrol marketers could create more fuel shortages

The Punch newspaper reported today that petroleum marketers in the country, under the Major Oil Marketers Association of Nigeria (MOMAN),

have protested about the governments delayed payment of outstanding obligations due to its members for the importation of Premium Motor Spirit

(petrol).

To keep the pump price of petrol fixed, the government, under the Petroleum Subsidy Fund (PSF) scheme, settles petroleum marketers’ the

difference between the landing cost (including distribution margins and foreign exchange differential on petrol imports) and the official pump price

of petrol. The price of petrol is officially set at N87/litre by the Petroleum Products Pricing Regulatory Agency (PPPRA), the principal regulator of

the downstream segment of the petroleum industry.

There has been an increase in the frequency of petrol shortages across major cities of Nigeria this year, as the delay in the payment of subsidy obligations to marketers’ had led them to halt the importation of petrol altogether. We understand that the recent fall in the price of crude oil

(which accounts for c.70% of government’s revenues) has made it increasingly difficult for the government to pay the debt it owes to petroleum

marketers.

According to a statement from MOMAN, petroleum marketers have only received approximately N30bn (US$150m) in forex differential claims out

of the N100bn (US$500m) owed them by the government. MOMAN also hinted that the total outstanding core subsidy payments due to marketers based on all claims verified by the PPPRA is in the region of N270bn (US$1.35bn).

Due to the alleged inefficiencies in the management of the PSF scheme, Nigeria’s President-elect, Muhammudu Buhari, reportedly hinted last week

of plans to abolish the subsidy scheme after he resumes office (the official handover date is 29 May 2015).

We believe that uncertainties regarding how the inherited subsidy obligations will be handled by the incoming administration could increase the

risk of fuel shortages in the coming days as marketers push to accelerate the payment of their claims.

Today’s news headlines

Fuel scarcity looms over FG’s indebtedness to marketers: Oil marketers, under the auspices of Major Oil Marketers Association of Nigeria (MOMAN), have decried the government’s inability to disburse the outstanding payments due to its members for the import of petrol under the

Petroleum Subsidy Fund scheme, warning that it could lead to another round of fuel scarcity if not promptly resolved. It is understood that the

purpose of the scheme is to ensure the reimbursement to marketers of agreed and verifiable costs of delivery of petrol to the consumer which are in

excess of the market price. Source: thisdaylive.com

Senate presidency slot sparks off intense lobby: As the leadership of All Progressives Congress (APC), plans to meet to take a final decision on the zoning of offices among the six geo-political zones, the North Central caucus of the party has asked the party to zone the position of the Senate

presidency to them. Source: vanguardngr.com

Buhari appeals to Nigerians for time to deliver on promises: The president-elect, Muhammadu Buhari, has appealed to Nigerians not to expect

instant miracles from his government to fix all the problems facing the country, but to be patient and supportive, saying he will need time to

address the Boko Haram insurgency in the North-east and other challenges confronting the nation. Buhari, who made this appeal in Kaduna at the weekend when he received a delegation of the All Progressives Congress (APC) members from Bauchi State led by the state governor-elect, said

the change which Nigerians expect from his incoming administration would not be realised overnight. Source: thisdaylive.com

Daily Retail Report

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Retail views

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