Retail views

UBA Q4 results

Nigeria

Monday, 27 April 2015

Daily Retail Report .

Market Review

Today at the Nigerian Stock Exchange, investor’s sentiment remained

negative as the benchmark index traded in negative territory for the

third session in a row. Except for NSEIND, all sectorial indices

monitored by the exchange closed negative leading to 0.49%

depreciation in the All Share Index. Wapco (4.59%) and Portpaint

(4.17%) closed strong leaving NSEIND as the only sub-sector in the

blue. On the back of sterlnbank (-4.66%), Guinness (-4.74%), Mansard

(-2.51%) and Seplat (-5.00%), NSEBNK, NSECNSM, NSEINS and

NSEOILGS shed points.

ASI Year-to-date return currently stands at -0.98%. Among the broad

indices, volume and value of transactions depreciated by 53% and 47%

relative to previous figures as 200million units of shares valued at

2.196bn were traded. For every 1 issue that added points, 2 declined;

while 54 remained unchanged. Top in the gainers’ territory are

CADBURY (N42.00), CUSTODYINS (N4.14) and DANGFLOUR (N5.08)

while SEPLAT (N378.10), LIVESTOCK (N2.20) and GUINNESS

(N160.04) led the decliners.

Fidson released their financial report for the first quarter ended 31st

March 2015. Revenue and PAT declined by 54% and 79% respectively

from prior period.

In the trader’s opinion, investors are advised to take up buying

opportunities in the face of reduced prices

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

NSE30 -0.57 10.42 48.99

NSE BNK10 -0.17 10.34 85.13

NSE CNSM10 -1.18 9.67 39.72

NSE OILG5 -1.64 9.99 77.74

NSE INS10 -0.35 3.91 0.02

NSE IND 0.29 11.64 -2.09

Market Wrap

ASI -0.49% 34,317.72

Index year-to-date -0.98%

Market Cap. N11.663Tril

Traded value 2.196Bn

Key gainers (%)

CADBURY 5.00

DANGFLOUR 4.74

WAPCO 4.59

COSTAIN 3.57

MOBIL 1.94

Key losers (%)

SEPLAT -5.00

GUINNESS -4.74

PZ -4.42

TOTAL 4.28

UBA -4.14

NITTY

1M 11.7033

2M 11.8829

3M 11.8959

6M 12.3307

9M 13.5543

12M 13.9240

Crude oil spot price

Brent crude US$64.96

Contact information

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Mobile: 08068015502

Email: cslservice@fcmb.com

Open Account: Click here to register

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Retail views

Top Highlight

Nigerian Breweries, Unilever Nigeria Bearish expectations for Nigerian Breweries and Unilever Nigeria

On Friday, 24 April, we published reports on Nigerian Breweries (NB, Sell, Price target: N127.7, Current price: N153.0) and Unilever Nigeria

(Unilever, Price target: N24.3, Current price: N40.0). We revised the target price for both companies. We remain bearish about these companies

and maintain our Sell recommendations.

Nigerian Breweries: Best brewer in a stale market

We believe Nigerian Breweries (NB) has emerged as by far Nigeria’s strongest brewer since its acquisitions of Sona group breweries (unlisted) in

2011 and of Consolidated Breweries (unlisted) in 2014, which added much-needed value brands to its product portfolio. With the enhanced

geography of these two acquisitions, it is using these brands to counter the pre-eminent competitor in the value segment, SABMiller (N/R).

We believe there is scope for c.20% y/y growth in top-line this year largely on the back of NB’s increased product portofolio of value brands.

Nonetheless, we think valuation is stretched at the current market price.

Key risks to our estimates include sales, competitive, and currency risks.

Unilever Nigeria: Survival in a tough market

The market in the North of Nigeria is important to Unilever, contributing c.30% to Sales. We believe the on-going security challenges in the North-

East of Nigeria and weak consumer spending weighed on the company’s top-line performance in 2014. In our view, Unilever faces a weak consumer environment in 2015e, and beyond.

Unilever has a durable portfolio of Home and Personal Care (HPC) and food brands, which gives it market leadership in several key segments.

However, Unilever’s product portfolio is weighted towards HPC products and this presents challenges in an environment of weak consumer

demand. Price sensitivity is greater in HPC than in food and we believe that competition is also more intense here.

We are of the view that Unilever faces specific challenges in developing top-line growth. So, we have revised down our forecast 2015e-19e Sales CAGR from 10.0% to 5.3%.

Among the risks to our investment case (which are more detailed in the report) is the possibility of a peace dividend if terror attacks by Boko

Haram are completely brought to an end.

Today’s news headlines

FCMB shareholders approve N40bn capital raising exercise: Shareholders of FCMB Group Plc last week approved the bank's plan to raise the

sum of N40 billion in debt and equity as part of its strategy to maintain its Capital Adequacy Ratio (CAR) and also facilitate transactions. The

shareholders also approved the payment of a cash dividend of 25 kobo per ordinary share, for the year ended December 31, 2014. The approvals

were given by the shareholders at the second Annual General Meeting (AGM) of FCMB Group Plc held in Lagos. Source: thisdaylive.com

Skye bank partners IFC on SME business: As part of its effort to strengthen small and medium enterprises (SMEs) operations, Skye Bank Plc said it has gone into a consultancy partnership with the International Finance Corporation (IFC), to evolve an effective lending framework for

micro, small and medium enterprises (MSMEs). The objective of the partnership, according to the bank is to produce a new lending framework for

SMEs that de-emphasises reliability on collateral by focusing primarily on evaluating business viability. Source: thisdaylive.com

Daily Retail Report

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Retail views

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