WEEKLY STOCK MARKET REVIEW AND STOCK RECOMMENDATION

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1 29-Aug Aug Aug-16 1-Sep-16 2-Sep Aug Aug Aug-16 1-Sep-16 2-Sep-16 WEEKLY STOCK MARKET REVIEW AND STOCK RECOMMENDATION WEEKLY STOCK MARKET REVIEW AND STOCK RECOMMENDATION AUGUST 29 SEPTEMBER 02 NSE ALL-SHARE INDEX MARKET CAP ( BILLION) VOLUME TRADED (SHARES) VALUE TRADED ( MILLION) Close 27, Close 9, Current 1, Current 13, Open 27, Open 9, Previous 1, Previous 112, Change (%) 1.11 Change (%) 1.13 Change (%) (0.75) Change (%) (0.88) WEEKLY VOLUME & VAULE TRADED NSE INDEX & MARKET CAPITALIZATION Volume Traded Value Traded (RHS) NSE Index Market Cap (RHS) 350 6, , , , , , , ,200 26,200 25, , , , TOP GAINERS NEWS PRICE ( ) CHANGE (%) 7-UP BOTTLING COMPANY WEMA BANK SEPLAT PETROLEUM DEV COMPANY PRESCO SKYE BANK NPF MICROFINANCE BANK FCMB HOLDINGS AIICO INSURANCE MOBIL FBN HOLDINGS ZENITH INTERNATIONAL BANK PLC PRICE MOST TRADED STOCK VOLUME LEAST TRADED STOCK PRICE ( ) VOLUME AIRLINE SERVICES AND LOGISTICS PLC ( ) NIGERIAN BREWERIES ,080,334, U T C NIGERIA NESTLE ,820,057, COURTEVILLE BUSINESS SOLUTIONS GUARANTY TRUST BANK ,549,394, PORTLAND PAINTS & PRODUCTS NIGERIA ZENITH BANK ,452, INFINITY TRUST MORTGAGE BANK ECOBANK TRANSNATIONAL INCORP ,970, DN MEYER DANGOTE CEMENT ,896, FTN COCOA PROCESSORS , MOBIL ,840, STANDARD TRUST ASSURANCE , PRESCO ,281, ROYAL EXCHANGE , ACCESS BANK ,179, CORNERSTONE INSURANCE COMPANY , UNITED BANK FOR AFRICA ,506, GREAT NIGERIAN INSURANCE , The under listed security was adjusted for dividend payment as recommended by their Board of Directors; Company Closure Date Divided ( ) Payment Date Guaranty Trust Bank 01/09/ (interim) 09/09/2016 TOP LOSERS PRICE ( ) CHANGE (%) MAY & BAKER 0.81 (19.80) UNITY BANK 0.75 (10.71) JULIUS BERGER (9.71) CUTIX 1.50 (9.09) CAVERTON OFFSHORE SUPPORT GROUP 1.33 (8.90) AFRICA PRUDENTIAL REGISTRARS 2.52 (8.36) N.E.M INSURANCE 0.83 (7.78) FIDELITY BANK 0.92 (5.15) CONOIL (4.99) OANDO 4.76 (4.80) PAST RECOMMENDED STOCKS PREFERRED ENTRY/EXIT PRICE PRICE ( ) 12M TARGET PRICE DANGOTE CEMENT DIAMOND BANK GUINNESS FIDELITY BANK FLOUR MILLS UNITED BANK FOR AFRICA NIGERIAN BREWERIES GUARANTY TRUST BANK UACN ZENITH BANK LAFARGE CEMENT ACCESS BANK NESTLE OKOMU OIL SEPLAT PET. DEV. COM

2 Recommendation for the Week Current Price (N) 1-Year Target Price (N) Best Entry / Exit Price (N) Rating Latest Support Latest Resistance 52 Week High 52 Week Low GT BANK SELL ZENITH BUY WAPCO BUY SEPLAT BUY GUARANTY TRUST BANK Guaranty Trust Bank plc is a Top tier Nigerian financial institution with business outlays spanning Anglophone/Francophone, West Africa, East Africa and the United Kingdom. The Bank presently has an asset base of over N2.5 Trillion, Net Assets in excess of N433.4 Billion and employs over 10,000 people in Nigeria, Cote d'ivoire, Gambia, Ghana, Kenya, Liberia, Rwanda, Sierra Leone, Uganda and the United Kingdom. GROSS EARNINGS(bn) 301, , ,873 NET INTEREST INCOME(bn) 160,046 80,120 79,115 PBT(bn) 232,472 63,112 91,382 PAT(bn) 98,678 53,374 77,461 TOTAL ASSETS(tn) 2,524,593 2,524,594 2,930,996 RATIOS (%) Q FORECAST COST OF RISK COST TO INCOME CAPITAL ADEQUACY ROAE ROAA GT Bank currently trades at a P/E ratio of 6.3x and a P/Bv of 1.8x compared with the 0.7x average multiple for tier-1 banks. We recommend a sell given its current price at N27.0, exceeding our revised 12 month price target for the lender. NSE-ASI & GTB /31/2015 9/2/2016 GUARANTY

3 ZENITH BANK Zenith Bank is a dominant player in Nigerian Banking Industry, operating within the Tier-1 space with Strong earnings capacity and growth and solid/liquid capital base. The International Finance Corporation (IFC), a member of the World Bank Group, signed a bilateral agreement to provide a US$ million loan facility to Zenith Bank in order to increase the bank s lending capacity to the various economic sectors. GROSS EARNINGS(bn) 432, , ,812 NET INTEREST INCOME(bn) 224, , ,023 PBT(bn) 125,616 39,073 31,160 PAT(bn) 105,663 25,500 18,270 TOTAL ASSETS(tn) 4,006,842 4,006,842 4,357,296 RATIOS (%) Q FORECAST COST OF RISK COST TO INCOME CAPITAL ADEQUACY ROAE ROAA The bank proposed an interim dividend of N0.25. Zenith Bank trades at a P/E ratio of 4.8x and a P/Bv of 0.8x compared with the 0.7x multiple for tier-1 banks. Our revised 12-month price target for the lender is N20.9, above its share price of 14.8 as at September 2, NSE-ASI & ZENITH /31/2015 9/2/2016 ZENITH

4 LAFARGE CEMENT Lafarge Africa Plc is a leading Sub-Saharan African building solutions company and also a subsidiary of the LafargeHolcim group. Lafarge Africa currently has an installed capacity of 12MMT, which is expected to grow to 17.5MMT by This is in addition to the strong market leading positions in aggregates, ready mix concrete and fly ash. TURNOVER (bn) 267,234 LATEST FY RESULT 152,178,868 PREVIOUS QUARTER 107,364,799 CURRENT QUARTER TURNOVER COST OF SALES (bn) (184,703) (98,001,304) (92,225,127) COST GROSS OF PROFIT SALES (bn) 82,530 54,177,564 15,139,672 GROSS PBT (bn) 29,274 30,847,724 (30,184,199) PROFIT PBT PAT (bn) 28,632 27,316,394 (30,246,243) RATIOS PAT Recent (%) activities RATIOS EBITDA MARGIN EV/EBITDA PBT MARGIN PBT GROSS MARGIN MARGIN ROAA GROSS MARGIN RETURN ROAE ON EQUITY Q RETURN ON ASSET Lafarge Cement currently trades at an EPS ratio of 5.7x and a P/Bv of 2.2x. Our revised 12 month price target for the lender is N78.0 implying a 38.3% upturn to its share price of N56.4 as at September 2, NSE-ASI & WAPCO /31/2015 9/2/2016 WAPCO

5 SEPLAT PETROLEUM DEV. COMPANY Seplat is an indigenous Nigerian upstream exploration and production company with an attractive portfolio of assets (oil and natural gas reserves) in the prolific Niger Delta region. Seplat s latest unaudited numbers display a loss before tax of -US$43.0m in Q vs. PBT of US$17.0m in corresponding period of 2015, as crude oil sales declined by 49% y/y to US$60m due to oil production disruptions on the Trans Forcados System (TFS). In contrast, gas sales grew 28% y/y to US$20m boosted by an 11% y/y hike in gas prices. Total working interest production declined by -21% y/y to 25,695boepd. From an asset perspective, OMLs 4, 38 & 41 still account for a significant (86%) proportion of production at 22,148boepd, down from 93% in Q Production from OPL 283, OML 53 and OML 55 were reported at 685boepd, 1,163boepd and 1,699boepd vs. 962boepd, 1,145boepd and 2,292boepd respectively in Q Seplat is reviewing its previous FY LATEST 2016 production FY RESULT guidance of PREVIOUS 41,000 to 48,000 QUARTER boepd and would CURRENT be communicated QUARTER once force majeure is lifted and exports have resumed via the TFS terminal. TURNOVER COST OF SALES GROSS TURNOVER PROFIT (bn) 465, , 59,600 PBT COST Recent OF SALES activities (bn) GROSS PAT Recent PROFIT activities (bn) (266,500) 199,400 (58,400) 72,700 (30,000) 29,600 RATIOS PBT (bn) (11,700) 24,800 (42,500) EV/EBITDA PAT (bn) (30,600) 23,300 (43,700) PBT RATIOS MARGIN (%) Q GROSS EBITDA MARGIN RETURN PBT MARGIN ON EQUITY RETURN GROSS MARGIN ON ASSET ROAA 2.55 ROAE 4.65 Seplat shares are trading on a 2016E P/E multiple of 8.4x and a 54.4% discount to our 12month price target of N NSE-ASI & SEPLAT /31/2015 SEPLAT 9/2/2016

6 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 following 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 below the current market price. Address: Greenwich Trust Limited Plot 1698A, Oyin Jolayemi Victoria Island, Lagos. Nigeria research@gtlgroup.com Visit us at: Research Team Usoro Essien Usoro.essien@gtlgroup.com Oluwaseun Dosunmu Seun.dosunmu@gtlgroup.com Tolulope Adepoju Tolulope.adepoju@gtlgroup.com Somto Okeke Somto.okeke@gtlgroup.com