Retail views

UBA Q4 results

Nigeria

Thursday, 02 April 2015

Daily Retail Report .

Market Review

The Nigerian Stock Exchange re-awakens its losing spree as profit

taking activities engulfed today’s session. All-Share-Index dropped

by 2.20% to return 34,941.79bps. The lackluster performance was

witnessed across board as all sub-indices closed in the red.

NSEBNK suffered the most by falling 4.90% on the backdrop of

most large caps: Guaranty (-9.69%), Zenithbank (-4.99%),

Skyebank (-4.92%), Wemabank (-4.50%) and UBA (-2.90%).

ASI year-to-date figure currently stands at 0.94% as market

capitalization fell by N268Bn to hit N11.867Tril. Among the broad

indices, Volume and value of transactions declined greatly by 41%

and 56% relative to previous figures as 581million units of shares

valued at N11.867bn exchanged hands. Top in the gainers’ territory

are GLAXOSMITH (N56.26), BERGER (N9.98) and CHAMPION

(N8.11) while SEPLAT (N400.71), GUARANTY (N28.79) and

FLOURMILL (N34.01) led the losers’ territory.

We expect further decline this week as speculators cash out of the market having returned circa 17% in one week.

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

NSE30 8.76 0.00 -7.21

NSE BNK10 8.88 0.00 -8.53

NSE CNSM10 7.24 0.00 -6.38

NSE OILG5 7.35 0.00 -12.55

NSE INS10 1.42 0.00 -22.34

NSE IND 9.76 0.00 -11.53

Market Wrap

ASI -2.20% 34,941.79

Index year-to-date e 0.94 %

Market Cap. N11.867Tril

Traded value 8.313Bn

Key gainers (%)

GLAXOSMITH 10.23

JBERGER 10.15

DANGFLOUR 4.92

NESTLE 4.63

UBCAP 4.88

Key losers (%)

SEPLAT -9.75

GUARANTY -9.69

FLOURMILL -7.63

ZENITH -4.99

OKOMUOIL -4.98

NITTY

1M 10.3201

2M 13.7024

3M 14.2437

6M 14.6268

9M 15.1478

12M 15.4580

Crude oil spot price

Brent crude US$57.81

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

Top Highlight

PZ Cussons Nigeria, FX PZ buys out Glanbia’s stake in Nutricima

PZ Cussons Nigeria (PZ, Hold, Target Price N34.6, Current Price N29.19) has bought out Glanbia's (N/R) stake in Nutricima (unlisted). This

makes Nutricima a wholly-owned subsidiary of PZ Nigeria. Nutricima produces dairy products in Nigeria. Some of its brands include Yo, Bliss, Coast and Nunu. These products are value brands.

PZ does not provide substantial financial information about the JV but in recent trading updates, the company disclosed that Nutricima has been

recording growth.

In March PZ announced its plan to merge with two of its subsidiaries. We believe the buy-out paves the way for a possible merger between PZ and

Nutricima. In our view, a merger will give PZ direct entry into the food business.

Consumer companies have been under pressure in recent years but food producers appear to have fared better than most. Nestle Nigeria's 2014 revenue grew 8% y/y, PZ’s 9M revenue was flat while Unilever Nigeria's 2014 revenue declined.

The decline in Unilever's revenue was largely due to declines in its Home and Personal Care (HPC) segment.

The Buhari effect: naira traded at N165.0-N167.0/US$ in Abuja last week

Following the announcement of Major General Muhammadu Buhari as the winner of the presidential election, the street naira/US$ rate has

strengthened.

On Thursday last week street exchange rates in Lagos hovered between N188.0-N189.0/US$, implying an appreciation of 16.0% in under a week. However, we have learned from Bureaux de Change (BDC) that the naira traded between N165.0-N167.0/US$ last week in Abuja.

This indicates a spread of N33.5 between the interbank exchange rate of N198.5/US$ and the street rates in Abuja. The explanation appears to be

that individuals and businesses gradually increased their US dollar FX holdings prior to the presidential election, and have been reversing those

trades.

Today’s news headlines

Amni terminates production sharing, technical services agreement with Afren: The crisis-ridden United Kingdom-listed Afren Plc is facing

fresh trouble as its Nigerian partner, Amni International Petroleum Development Company Limited has allegedly terminated the Production

Sharing and Technical Services Agreement (PSTSA) with Afren Energy Resources Limited, the Nigerian subsidiary of the UK firm. THISDAY gathered that the relationship between Amni and Afren, a technical service provider to Amni in the operation of Okoro Oilfield had hit the rocks

following the reported termination of the Okoro further field development project in Oil Mining Lease (OML) 112 by Afren allegedly without Amni’s

consent. Source: thisdaylive.com

Afren gets new deadline for payment of $50m: United Kingdom-listed Afren has stated that it has obtained from the lenders of the $300 million Ebok debt facility a further deferral of the $50 million amortisation payment originally due on January 31, 2015 until April 30, 2015. In an update

on interim funding issued at the weekend, the company said it was making good progress on satisfying the relevant conditions precedent to the

provision of the interim funding, adding that it expects to finalise arrangements for completion of the deal imminently. Source: thisdaylive.com

Daily Retail Report

Page 3

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