Q1 Q2 Q3 (QtD) YtD. Projected PAT (N' Billion) Projected EPS (N) ACCESS

Transcription

1 THE RISE OF THE NIGERIAN STOCK MARKET Thursday August 30, The Nigerian All Share Index () continues to soar amidst inflationary pressures within the Nigerian economy and the European debt crisis on the global scene. As at August 29,, the had risen by as against a decline of in the comparable period of The increase in the has been primarily driven by significant capital appreciation of the shares of Nestle, Nigerian Breweries, Guaranty Trust Bank, Zenith, UBA, Access, First Bank, Cadbury, Unilever and Dangote Flour amongst others. Encouraging as this is, investors should consider the positive return from the stock market with cautious optimism. The disposable income of the majority of Nigerian investors have been eroded by the partial removal of oil subsidy, the increase in electricity tariff and the attendant upward pressure on the prices of goods and services. Evidently, the stock market is driven primarily by foreign institutional investors who are interested in particular stocks that satisfy their predetermined criteria. This is buttressed by our analysis which revealed that less than 20 of listed stocks have exhibited capital appreciation to date. In a more balanced market, relative pricing of stocks would have had a pull effect on other stocks resulting in the capital appreciation of more stocks than is presently the case. NSE RETURN PROFILE JUNE 2.12 JULY 6.77 AUGUST (MTD) 2.64 Q Q Q3 (QTD) 9.59 YTD Source: The Nigerian Exchange, CBP Research (MTD) 01 August, 29 August, Furthermore, the performance of some listed companies, particularly the banks have been encouraging. However, the sustenance of these good performances should be weighed in the light of the high contribution of interest income to gross income. It is noteworthy that the high interest income is usually not from significant increase in banks loan portfolio but from active trading by banks in Government Bonds and Treasury Bills which currently provide high and attractive yields. Are these high yields sustainable and for how long? Notwithstanding the foregoing, we maintain a positive outlook for the market. This opinion is predicated on relative stability of the Nigerian economy, the various reforms being undertaken by the new management of The Nigerian Exchange to deepen the market and engender investors confidence, the activities of the appointed Primary Market Makers and the investment of part of the Sovereign Wealth Fund (SWF) in the Nigerian Capital Market when the Fund becomes operational. Sector Return Profile June July August (MtD) Q1 Q2 Q3 (QtD) YtD NSE NSE Consumer Goods NSE Banking NSE Insurance NSE Oil & Gas Source: CBP Research Below is our analysis and recommendation on ten selected stocks Price as at Aug 29, (N) Price as at Jan 3, (N) Return (N) Return () Excess of Return over Market Return () Projected PAT (N' Billion) Projected EPS (N) Current Dividend Yield () Projected Price Comment Recommendation ACCESS Outperform Buy DANGCEM Underperform Buy FIRSTBANK Outperform Buy GUARANTY Outperform Buy GUINNESS Underperform Hold NB Outperform Buy NESTLE Outperform Hold UACN Underperform Hold UBA Outperform Buy ZENITHBANK Outperform Buy Source: CBP Research NSE Return as at August 29, Returns here refers to capital appreciation only; dividends and bonus issues where not considered in its computation CBP Research Page 1

2 60 NESTLE PLC YtD PRICE MOVEMENT NESTLE NIGERIA PLC Turnover 28, , , ,6 70, , PBT 7, , ,10 9, ,69 18,53 Tax 1, , ,77 3,55 1,73 NESTLE PAT 6, , , , , ,80 FIRST BANK OF NIGERIA PLC FIRST BANK NIGERIA PLC YtD PRICE MOVEMENT Gross Earnings 93, , , ,08 211, ,32 PBT 28, , , ,09 49,01 50, Tax 4, , ,14 3,61 6,12 5, FIRSTBANK PAT 24, , ,16 20, ,89 44, UBA PLC YtD PRICE MOVEMENT Gross Earnings UNITED BANK FOR AFRICA PLC , , ,5 91,26 132, , PBT 16, , ,83 12,29 12, ,35 Tax 2, , ,99 2,03 18,84 UBA PAT 13, , ,89 10,30 10,10 27, ZENITH BANK PLC ZENITH BANK PLC YtD PRICE MOVEMENT 2011 Turnover 72, , ,25 123,19 182,95 244,07 PBT 23, , ,35 36, , ,69 Tax 3, , ,08 4, , ,50 PAT 19, , , ,10 42,95 44,18 ZENITH BANK CBP Research Page 2

3 NIGERIAN BREWERIES PLC YtD PRICE MOVEMENT NIGERIAN BREWERIES PLC 2011 Turnover 67, , ,02 110, ,96 230,1 PBT 14, , , , , , Tax 4, , , ,2 12,45 18,34 NB PAT 9, , , ,95 24,82 38,02 DANGOTE CEMENT PLC DANGOTE CEMENT PLC YtD PRICE MOVEMENT 2011 N' Million Turnover 64, , ,50 112, , PBT 30, , ,89 58, , Tax , PAT 30, , , ,90 DANGCEM UAC OF NIGERIA PLC U.A.C OF NIGERIA PLC YtD PRICE MOVEMENT Turnover 14, , , ,26 44,60 63,58 PBT 1, , ,27 3,1 11,04 12, Tax , ,30 1,4 2, UACN PAT , ,8 9,63 10, GUINNESS NIGERIA PLC GUINESS NIGERIA PLC YtD PRICE MOVEMENT GUINNESS 2011 QTR.1 QOQ QTR.2 QOQ QTR.3 QOQ QTR.1 QTR.2 QTR.3 QTR.4 Turnover 25, , , , ,22 89, , PBT 3, , , , , , , Tax 1, , , ,06 3, ,6 8,24 PAT 2, , , , ,33 11, ,92 CBP Research Page 3

4 1 1 GTBANK PLC YtD PRICE MOVEMENT GUARANTY TRUST BANK PLC 2011 Turnover 52, , ,58 84,76 126, ,8 PBT 24, , , , ,39 65, EI 2,57 2,22 2,76 GUARANTY Tax 5, , , ,64 9,47 15,70 PAT 19, , ,63 25, ,9 52, ACCESS BANK YtD PRICE MOVEMENT ACCESS BANK PLC 2011 QTR.1 QOQ QTR.1 QTR.2 QTR.3 QTR.4 Turnover 62, , ,16 138,94 PBT 15, , , , Tax 3, , ,6 3, ACCESS PAT 11, , , ,70 CBP Research Page 4

5 DISCLAIMER & DISCLOSURE The value of any investment is subject to fluctuations, i.e. may arise and fall. Past performance is no guide to the future. The rate of exchange between currencies may cause the value of investment to increase or decrease. Hence investors may not get back the full value of their original investment. This document is not 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. This document is based on information received from publicly available reports and industry sources. Capital Bancorp Plc may not have verified all of this information with third parties. Neither nor its advisors, shareholders, directors or employees can guarantee the accuracy, reasonableness or completeness of the information received from any sources consulted for this publication, and neither nor its advisors, shareholders, directors or employees accepts any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document. This document is not to be relied upon and should not be a substitute for the exercise of independent judgment. This document includes certain statements, estimates and projections with respect to the anticipated future performance of securities listed on The Nigerian Exchange and as to the market for these shares. Such statements, estimates and projections are based on information that we consider reliable and may reflect various assumptions made concerning anticipated economic developments, which have not been independently verified and may or may not prove correct. No representation or warranty is made as to the accuracy of such statements, estimates and projections or as to their appropriateness for the purpose intended and it should not be relied upon such. Opinions expressed are current opinions as of the date appearing on this material only and may change without notice. Other third parties may have issued other reports that are inconsistent with, and reach different conclusions from, the information presented in this report. Those reports reflect the different assumptions, views and analytical methods of the analysis who prepared them. 3 rd & 4 th Floors,9/11 Macarthy Street, Onikan,Lagos. TEL: , CBP Research Page 5