WEEKLY STOCK MARKET REVIEW

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1 18-Apr Apr Apr Apr Apr Apr Apr Apr Apr Apr-16 WEEKLY STOCK MARKET REVIEW APRIL 18 APRIL 22 NSE ALL-SHARE INDEX MARKET CAP ( BILLION) VOLUME TRADED (SHARES) VALUE TRADED ( MILLION) Close 24, Close 8, Current Current 5, Open 24, Open 8, Previous 1, Previous 7, Change (%) 0.53 Change (%) 0.53 Change (%) (36.20) Change (%) (20.44) WEEKLY VOLUME & VAULE TRADED NSE INDEX & MARKET CAPITALIZATION Value Traded (RHS) Volume Traded NSE Index Market Cap 1,0 1,400 1,200 1, ,000 24,0 24,0 24,400 24,200 24,000 23,0 23,0 23,400 23,200 TOP GAINERS ( ) CHANGE (%) TIGER BRANDED CONSUMER GOODS ETERNA TRANS NATIONWIDE EXPRESS LEARN AFRICA FCMB HOLDINGS UACN PROPERTY DEVELOPMENT CO AXAMANSARD INSURANCE DANGOTE SUGAR BERGER PAINTS DIAMOND BANK MOST TRADED STOCK ( ) VOLUME GUARANTY TRUST BANK ,426,193, ZENITH BANK ,293,528, NIGERIAN BREWERIES ,683, LAFARGE CEMENT ,514, UNITED BANK FOR AFRICA ,570, FBN HOLDINGS ,137, ACCESS BANK ,711, SEPLAT PETROLEUM DEV. COMPANY ,971, DANGOTE CEMENT ,1,3.68 NESTLE ,624, TOP LOSERS ( ) CHANGE (%) LAW UNION AND ROCK INSURANCE 0.50 (18.03) FIDELITY BANK 1.21 (13.57) UNION HOMES SAVINGS AND LOANS 3.87 (9.58) AIRLINE SERVICES AND LOGISTICS 1.81 (9.50) OKOMU OIL (9.38) CONOIL (9.37) CHAMPION BREWERIES 2.81 (9.35) JOHN HOLT 0. (9.09) PORTLAND PAINTS AND PRODUCTS 2.62 (9.03) CUTIX 1.32 (8.33) LEAST TRADED STOCK ( ) VOLUME U T C NIGERIA RT BRISCOE AFRO MEDIA LINKAGE ASSURANCE COMPUTER WAREHOUSE GROUP CHAMS B.O.C. GASES SCOA AFRICA ALLIANCE INSURANCE COMPANY PS MANDEIDES & CO COMPANY NEWS Thirty-five equities appreciated during the week, er than Twenty-six equities of the previous week. Thirty-two equities depreciated in price, er than Forty-one equities of the previous week, while one hundred and twenty-two equities remained unchanged as the previous week. A total volume of 20 million, million and 40 million units were added to the foling bonds: 15.54% FGN FEB 2020, 12.50% FGN JAN 2026 and 12.40% FGN MAR 2036 respectively on Thursday 21st April, PAST RECOMMENDED STOCK PREFERRED ENTRY ( ) 12M TARGET ASHAKA CEMENT DANGOTE CEMENT DIAMOND BANK GUINNESS FIDELITY BANK FLOUR MILLS UNITED BANK FOR AFRICA NIGERIAN BREWERIES OKOMU OIL GUARANTY TRUST BANK SKYE BANK UACN ZENITH BANK

2 WEEKLY EQUITY REVIEW In the just concluded week, the domestic bourse gained some ground against the backdrop of positive Q1 corporate results. However, the volume and value of deals declined. Consequently, on a week-on-week (WoW) basis, the Benchmark Index appreciated by 0.53%, pulling back the YTD loss to 13.2%. Current Price (N) 1-Year Target Price (N) Best Entry / Exit Price (N) Rating WAPCO BUY GUARANTY BUY GUINNESS BUY UACN BUY Similarly, the NSE Banking Index and the NSE Industrial Goods Index gained by 3.8% and 0.04%, while the NSE Oil and Gas Index, and NSE Consumer index depreciated by 0.7% and 0.8% respectively. LAFARGE AFRICA Lafarge Africa ( Lafarge ) recently released its full-year (FY) 2015 financial scorecard, which showed a 2.5% year-on-year (y/y) growth in revenue and a 20.0% decline in profit after tax (PAT) over the same period. Lafarge managed to grow its topline amid the challenging market and economic headwinds it faced during the year, largely driven by the growth in its Ready-mix sales and its Nigerian South-West operations NSE-ASI & WAPCO Lafarge s revenue grew by 2.5% to 267.2bn from 2.8bn. The growth attests to the company s resilience despite the headwinds and the competitiveness in the market. Its Ready-mix operations in Nigeria continued to show great strength with a 29.0% increase in sales from the previous year which help bolster the topline growth. PAT for FY 2015 fell by 20.0% to 27.0bn from 33.5bn recorded in the prior year. The decline in PAT can be attributed to one-off restructuring/ redundancy costs and the unrealized exchange impact of the foreign currency borrowing to fund its Mfamosing operations. Excluding these costs, profits improved by 6.0% compared to the previous year. The decline of 20.0% in bottom line resulted from one-off costs undertaken during the year for restructuring the company. 70 WAPCO WAPCO Valuation remains positive for Lafarge. Lafarge Africa shares are trading on a 2016 forward P/E multiple of 12.87x and a P/BV of 3.14x. Adopting a blend of absolute and relative valuations tools, we reviewed our 12-month target for the year 2016 to 104.1, indicating a potential upside of 40.5% from its current share price of

3 GUARANTY TRUST BANK GT Bank recently released its audited financial results for the year ended December 2015 to the Nigerian and London Stock Exchanges. The bank defied the turbulent operating environment in 2015 and achieved impressive growth in all key financial indices NSE-ASI & GUARANTY The bank recorded growth in gross earnings of 301.9billion, representing an increase of 8.4% over the 278.5billion recorded in the same period of 2014 and Profit Before Tax (PBT) of.7billion, 3.7% or 4.3billion er than the 116.4billion reported in December Topline growth was buoyed by 14.3% y/y rise in interest income while non-interest income dipped by 8.2%. The major drag in non-interest income was a slump in foreign exchange revaluation gains to 5.2 billion from an exceptional income of 16.2 billion in Thus, the other income line declined by 52.4% to offset the modest rise of 8.1% in fee and commission income. Quarter-on-quarter, the banks Q PBT result of 28.6bn was down 20.1% y/y while PAT only narrowed by 15.2% y/y to 22.7bn, due to a lesser tax rate of 15.2% in Q vs 22.4% a year earlier. 70 GUARANTY GUARANTY GT Bank currently trades at a P/E ratio of 4.8x and a P/Bv of 1.2x compared with the 0.7x average multiple for tier-1 banks. Our revised 12 month price target for the lender is implying a 48.7% premium to its share price of as at April 22nd, GUINNESS GUINNESS released its unaudited Q (end-sept) results showing a mild 3.3% y/y increase in revenue, however gross earnings declined by 11.8% y/y despite the strong volume growth in the first quarter of 2015 and the success of its Orijin ready to drink (RTD). NSE-ASI & GUINNESS Given the challenging environment and monetary uncertainties, cost of sales rose to 18.5% y/y. Finance cost on the other hand drifted downwards, after Guinness issued the first tranche ( 5 billion) of its 10billion commercial paper at 13.3% in May, which was used to refinance some of its debt averaging 15% - 16%. Against the backdrop of a spike in operating expenses by 50.8% y/y and aggressive marketing of its mainstream lager brand, Guinness profit after tax (PAT) has now recorded its third consecutive y/y decline paring 76%. The pass through effect contributed to the pressure on the company s earnings. We valued GUINNESS using a blend of absolute and relative valuation models and arrived at a 2015 target price of for the counter. At its current price of 98.00, GUINNESS has potentials to deliver 40.2% upside return in 12 months. Hence, we place a BUY recommendation on the counter. 40 GUINNESS GUINNESS

4 UACN The tough business environment weighed on the UACN business performance in The full year 2015 turnover was down 14.6% year on year to 73.1 billion compared with the 85.6 billion in Similarly, gross profit fell 14.0% year on year to 16.6 billion. Operating expenses increased as rising input costs which was not passed to the consumers adversely impacted the firm s operations. NSE-ASI & UACN In addition to the rising costs, the outbreak of Avian across two-third of the states of the federation significantly reduced bird population and feed demand. In order to reduce the impact of the losses, the firm introduced Vital Gold & Aqua -Boom fish feeds and is gradually growing its Binggo dog feed brand. Furthermore, the real estate segment of the firm was affected most by the challenging business environment as business model of the real estate segment was reviewed to reflect the recent commercial and retail developments. In addition to the restructuring of the sub segment s finances, the firm impaired its 2billlion equity investment in the Hotel business and also impaired 473 million in the Hotel Plant and Equipment. 40 UACN UACN However, Festival mall opened for business during the year with Shoprite as its anchor tenant. We expect some improvement in the property sub segment in the near to middle term as the planned restructuring of the business should prop up the firm s numbers. As a result of the weak performance of the domestic capital market, UACN has suspended its planned Rights Issue and other capital rising plans. The firm plans to maximize its internally generated funds take up Rights in UPDC, Livestock feeds and Portland Paints. In the light of this, the firm also announced a dividend cut back to 1.00 per share for full year Consequently, profit before tax (PBT) and profit after tax (PAT) both dipped compared to the previous year by 44.0% and 52.0% respectively. UACN shares trade at a P/B multiple of 0.8x and a P/E ratio of 12.7x. we view the counter as a BUY due to the potential upside of 47.4% to our 12month price target of 28.0.

5 DISCLAIMER AND IMPORTANT DISCLOSURES This publication is for general information only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed in this article represent the current, good-faith views of the analyst(s) at the time of publication. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Greenwich Trust to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy, completeness or otherwise. Opinions expressed are our own unless otherwise stated. Past performance is no guarantee of future results. The inclusion of past performance figures is for illustrative purposes only. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. This is not in any sense a solicitation or offer of the purchase or sale of securities. Neither Greenwich Trust Limited nor any of its officers or employees accept any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents. Investments in general and, equities, in particular, involve numerous risks, including, among others, market risk, counterparty default risk and liquidity risk. The ratings and company profile assessments reflect the opinion of the individual analyst and are subject to change at any time. This material has been issued by Greenwich Trust Limited, which is regulated by the Securities and Exchange Commission. Further information on any security mentioned herein may be obtained by ing: research@gtlgroup.com Ratings Definition: Ratings may be defined by the foling standard: BUY (OVERWEIGHT): Target Price of the stock is above the current market price by at least 20 percent; HOLD (NEUTRAL): Target Price of the stock ranges between < -10 percent and < +20 percent from the current market price and; SELL (UNDERWEIGHT): Target Price of the stock is more than 10 percent be the current market price. Address: Greenwich Trust Limited Plot 1698A, Oyin Jolayemi Victoria Island, Lagos. Research Team Usoro Essien Usoro.essien@gtlgroup.com Oluwaseun Dosunmu Seun.dosunmu@gtlgroup.com Tolulope Adepoju Tolulope.adepoju@gtlgroup.com Nigeria research@gtlgroup.com Visit us at: