nigerian equities weekly - investment one advise medium to long-term investment horizon as market...

-13.80%

-17.83%

-8.44%

-6.51%

-14.65%

-11.02%

-0.63%

-20%

-15%

-10%

-5%

0%

Economy: During the week, the federal government signalled a slight change

in its plan to fund the 2016 budget deficit with the planned visit of the Finance

Minister to China with a view to open negotiation with China Export-Import Bank

for a $2billion loan facility at concessionary rate of around 1.5%, temporarily

putting the proposed $1bn Euro Bond issuance on hold till March. This move is

part of the government’s strategy to finance its proposed N3tr deficit at the

lowest cost possible with a view to reduce the burden of interest payment.

Given the debt-to-GDP ratio at 11.9% as against 40% threshold set by IMF for

developing countries (according to data from DMO), we believe that the current

debt level is modest. With this said, it is our opinion that the government’s

ability to fund the budget will be enhanced if the facility is granted coupled with

the fact that there is N2.2trillion saving from the TSA account. Hence, we see

this as a positive for the macroeconomic prospect.

Equities: The equities market closed positive in the just concluded week with a

5.05% w/w gain after a five-day rally which strengthened benchmark indicator

by 1,187.92points. Both the NSE-ASI and market capitalisation closed higher

ending the week at 24,689.69pt and N8.491trillion respectively. Market

sentiment was positive with renewed active bargain tendency displayed toward

large and medium cap stock, probably in anticipation of positive earnings

release and likelihood of dividend announcement. Market turnover was

estimated at c.N18.48bn as investors exchanged about 5bn units of stocks in

16,711 deals. DANGCEM led the list of 26 equities that appreciated in value

during the week against 36 stocks that closed negative topped by CONNOIL

(-17.95%).With more corporate results expected to trickle in any time soon, we

expect investors to sustain the anticipatory bargain hunting witnessed in the

just-concluded week, probably on account of dividend expectation. We

however advise medium to long-term investment horizon as market

performance will continue to reflect the challenging macro environment.

Currency: The Naira traded in a range of N197-199/$ this week due to

continued support from the CBN. However the local currency closed mixed

gaining +0.81% w/w against the Pound Sterling but shedding -0.45% w/w

against the Euro to close at N286.33/£ and N222.66/€. In the official market, the

Naira fell N335/$ on Friday. This was mainly due to speculation that CBN had

added overseas school fees and medical expenses to the 41 banned items.

CBN latter clarified that these items had not been banned but the priority for FX

going forward will be for the importation of critical raw materials, plants and

machinery for the real sector. Allocation of FX for overseas school fees and

medical expenses will be done at the discretion and ability of banks not the

CBN.

Fixed Income & Money Market: The call rate rose as high as 2.93%

Wednesday from about 1% at the start of the week due to FX provisioning on

Tuesday draining system liquidity from N950bn to 350bn. The call rate later fell

below 1% on Friday as N234bn worth of OMO maturities hit the system on

Thursday, in addition to FX refunds on Friday. All other market rates contracted

w/w with the 1month and 6month NIBOR rate falling by 30bps to 7.94% and

11.12% respectively while the 3month NIBOR rate shed 50bps to 9.38%. In the

bond market, investors were bullish the majority of the week in anticipation of

the Federal Government bond auction on Wednesday. As a result, average

bond yields contracted by 17bps w/w to 11.89%, despite expanding by 5bps

on Friday. The 5yr and 7yr benchmark bonds contracted by 35bps to 11.85%

and 11.87% respectively, while the 10yr benchmark bond declined by 20bps to

11.95%. On Wednesday, the DMO reopened the 15.54% Feb 2020, selling

N40bn at a marginal rate 12.19% while also reopening the 12.50% Jan 2026,

selling N50bn at a marginal rate of 12.39%. Both bonds were at least 2x

oversubscribed. We expect liquidity levels to determine market activity during

the next week.

Top Stocks Y-t-d

SEPLAT N252.11 24.19%

TIGERBRANDS N1.20 6.19%

CADBURY N18.08 5.42%

FO N342.00 3.64%

PRESCO N34.00 3.03%

Y-t-d Performance

Week-on-week Performance

Contacts:

Olumide Awe

+234 812 992 1016

[email protected]

Ayodeji Dawodu

+234 812 992 1017

[email protected]

Ahmed Babajide

+234 812 992 1010

[email protected]

5.05%

-0.53%

4.47%

1.27%

-0.54% -0.81%

0.00%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

NIGERIAN EQUITIES WEEKLY

Market wrap | 12th

February 2016

mailto:[email protected]



2

0.0

2.0

4.0

6.0

8.0

10.0

P/E P/BV

0.74%

-1.01%

3.50% 3.19%

-4.91% -6%

-4%

-2%

0%

2%

4%

WoW Return

-15.46%

-23.39%

-8.97%

-13.91% -13.17%

-32.00%

-24.00%

-16.00%

-8.00%

0.00%

YTD Return

Banking sector

Our Banking tracker closed negative again this week, as investors

continued to exit positions. This may have been due to the news that

banks have begun restructuring loans to upstream Oil and Gas

companies, extending tenures from five to ten years with a $30pb

benchmark. We may see non-performing loans build up in the oil

sector due to suspension or cancelled projects in reaction to the slide

in crude oil prices. Consequently, the tracker fell -0.53% w/w as

declines in ETI (-6.05%), ZENITHBANK (-4.91%) and DIAMONDBNK

(-3.45%) offset gains in FCMB (+4.55%), and GUARANTY (+3.50%)

and UBA (+3.19%).

GUARANTY’s performance may not be unconnected to its

announcement that 25% of its $500m 7.50% May 2016 Eurobond was

tendered following its offer on the 5th

of Feb. This shows the banks FX

liquidity and confidence from it’s debt investors.

While we believe the announcement that banks will be charging a

Negotiable Account Maintenance fee will be supportive of earnings;

our outlook on the sector remains negative as we expect limited loan

book growth due to the fragile macro environment, despite CBN’s

liquidity easing. Furthermore, asset quality is likely to deteriorate

specifically due to their exposure to the Oil and Gas sector given the

slide in crude oil prices. This will likely negatively impact

performances in the medium term which may have a knock on effect

on ROE. Sector performance is also likely to be reflective of

diminishing FX and other non-interest income which aided results in

the early period of 2015 and an increase in loan loss provisioning. In

the long term, pressures on net interest margin may force banks to

seek alternative strategies of boosting income, which may involve

lending to the real sector. We see this as a possibility as the positive

impact of the increased CAPEX spending by the government kicks in.

Our rating for the Banking stocks under our universe are: Guaranty

Trust (BUY), FBNH (HOLD), Access Bank (BUY), Zenith Bank (BUY)

and UBA (BUY).

Source: Bloomberg, Investment One Research

3

0

20

40

P/E P/BV

14.00%

8.11%

-0.26%

0.00%

3.75%

-10%

0%

10%

20%

FO MOBIL OANDO TOTAL SEPLAT

WoW Return

3.64%

-0.25%

-35.93%

-4.77%

-10% -11%

-2%

-11%

-40.00%

0.00%

40.00%

FO

MO

BIL

OA

ND

O

TO

TA

L

Gru

pa

Lo

to

s

Hin

du

sta

n

Pe

t. C

orp

Sh

ell

Om

an

Tu

rca

s P

etro

l

YTD Return

Oil & Gas sector

The Oil and Gas tracker gained +1.27% w/w following the +1.55%

appreciation last week as Brent crude oil prices remained firmly above

$30pb. This performance was driven by FO (+14.00%) which

announced on Tuesday that it had joined the United Nations Compact

corporate responsibility initiative. There were also price appreciations

in MOBIL (+8.11%) and SEPLAT (+3.75%) while there were

significant sell offs in CONOIL (-17.95%).

The CBN’s FX management regime has led to marketers owing a total

sum of $1.29bn to foreign suppliers and such are blacklisted for

further orders. This led to the decision by the Petroleum Products

Pricing Regulatory Agency to allocate 78% of total sector volume,

3.1m metric tons of petrol import in Q1 2016, to the NNPC as

independent marketers were unable to meet their import volume

quota. This is likely to offset the gains from changes made to the PMS

pricing template, which increased retailers’ margin to N5per litre from

N4.60per litre.

The administration stated its primary focus will be on onshore oil

production in terms of investment while trying to reduce the cost of

production from $13pb. This maybe a benefit to upstream players in

the medium term as it could allow them to maintain production

onshore as offshore production, which cost c.$34pb, is unlikely to be

profitable.

On the whole, we reiterate our near term negative outlook on the

space on the back of; declining import quota, falling oil prices,

infrastructure sabotage, oil theft and regulation. However, as long-

drawn efforts to pass the PIB (to be split into two) seem to come to a

head, we see opportunities for investments in the upstream petroleum

sector for the likes of Seplat, FO and OANDO in the medium to longer

term.


4

0.0

10.0

20.0

30.0

40.0

P/E P/BV

0.00% 0.00%

0%

20%

40%

60%

80%

100%

OKOMU PRESCO

WoW Return

-4.29%

3.03%

40%

1%

6%

1%

-10%

0%

10%

20%

30%

40%

50%

YTD Return

Agriculture sector

The Agriculture tracker was neutral this week as both OKOMUOIL and

PRESCO closed flat w/w. Although there was no movement in

PRESCO over the week, OKOMUOIL fell -3.48% on Monday before

regaining it loses towards the end of the week.

The administration reaffirmed its focus on the sector by commencing

the second phase of the Agricultural Equipment Hiring Enterprise

scheme. This will provide necessary tools for farmers to expand

cultivated areas and improve efficiency. We see more upside in the

sector on the back of increased domestic and international

investment, in addition to CBN’s FX restriction and import substitution

strategy.


5

0

5

10

15

20

25

P/E P/BV

1.41%

-2.48% -3%

-2%

-1%

0%

1%

2%

NB GUINNESS

WoW Return

-28%

-1%

-7%

-11%

2%

-11%

-30%

-20%

-10%

0%

10%

YTD Return

Breweries sector

The Breweries sector closed lower returning -0.54% w/w to reverse

the positive momentum of the earlier weeks despite prevailing

market-wide positive sentiment. Sell-off on the stock of GUINNESS,

with -2.48% w/w loss drove the sector to a negative close offsetting

+1.41% gain in NB.

During the week, Nigerian Breweries plc (NB) released its Q4 2015

results which came in mixed. While sequential trends were stronger,

the y/y performance was still reflective of the challenging macro

environment.

In another development, Guinness Nigeria Plc notified the exchange

of the plan to list its N10bn worth Commercial paper on the FMDQ

OTC platform as a way of increasing visibility of the debt instrument

with a view to increase demand for future issues. This is expected to

help GN reduce finance charge burden going forward.

While both GN and NB have responded with innovative products

including Ace Root, Orijin and the likes, the continous pressure on

disposable income and the impact of FX restrictions on capacity

utilisation, which saw manufacturing GDP in Q3’15 declined by 1.8%,

suggests corporate earnings will remain depressed in the near term.

While we see support from seasonal pick-up in household spending,

we are however inclined to believe that the outlook for earnings of

tickers in the Breweries space could at best neutral when earnings are

released. This is so as declining sales volume have led to weakeness

in sector’s opex/sales ratio. However, in the longer term, we believe

both GN and NB are poised to benefit from recent investments in

capacity expansion, attempts at increasing local sourcing of input

material to c.60% as well as strides in diversifying their portfolio to

impact on performance.

We rate both NB and GUINNESS a SELL based on our 2015/2016

target prices of N91.76 and N90.8


6

4.78%

-2.67%

0.17%

-2.40%

2.58% 2.05%

-1.14%

-6.65% -10%

-5%

0%

5%

10%

PZ

UN

ILE

VE

R

CA

DB

UR

Y

DA

NG

SU

GA

R

FLO

UR

MIL

L

HO

NY

FLO

UR

NE

STLE

UA

CN

WoW Return

-32%

5%

-6%

-19%

-6% -7% -13%

30%

13%

-4%

-60%

-30%

0%

30%

60%

UN

ILE

VE

R

CA

DB

UR

Y

FLO

UR

MIL

L

NE

STLE

UA

CN

Stra

uss

Nestle

In

dia

Illovo

su

ga

r

To

ng

att H

ulle

t

Jo

llibee

Fo

od

YTD Return

0

8

16

24

32

40

48

PZ

UN

ILE

VE

R

CA

DB

UR

Y

FLO

UR

MIL

L

NE

STLE

UA

CN

Stra

uss

Illovo

su

ga

r

To

ng

att H

ulle

t

Jo

llibee

Fo

od

P/E P/BV

Consumer Goods sector

Despite the market-wide positive sentiment, the consumer goods

tickers under our coverage closed negative w/w, shedding -0.81 %

dragged by losses in UACN (-6.65%), UNILEVER (-2.67%),

TIGERBRAND (-4%) and DANGSUGAR (-2.40%) (as investors booked

profit on recent gains) which outweighed gains in CADBURY

(+0.71%), FLOURMILL (+2.58%) and HONYFLOUR (+2.05%).

In the immediate ter m, we are underweight on the Consumer Goods

tickers as fiscal weakness at sub-national levels of government

occasione d by declining FAAC allocation which hamper the ability of

the states to pay salaries had resulted in weakened demand across

board. This is expected to impact the earnings and profitability of

tickers in this space. In similar vein, we see CBN’s continued FX

demand mangement regime, which has impacted manufacturing

output in the last three quarters (Q1’15 -0.70%, Q2’15 -3.82% and

Q3’15 -1. 8%), further impacting the real sector’s capacity utilisation;

putting upward pressure on opex/sales ratio. As such, our earnings

outlook for tickers in the consumer goods space appears less

inspiring. On the positive, we see government’s planned N300billion

Special Intervention Program serving as a boost to consumer names

earnings.

However, in the medium to long-term, we see government focus on

infrastructure spending leading to the overall improvement in

economic activity and consequently aggregate demand as supportive

of the sector’s outlook.

Ratings across our universe of consumer goods stocks are: PZ

(SELL), UNILEVER (SELL), FLOURMILL (SELL) while we have

NESTLE as HOLD.


7

0

6

12

18

24

30

AS

HA

KA

CE

M

DA

NG

CE

M

WA

PC

O

CC

NN

Sia

m C

em

en

t

Ultra

tech

Ce

me

nt

Se

me

n P

erse

ro

PP

C

Ho

lcim

(In

do

nesia

)

P/E P/BV

0.00%

17.78%

0.00% 0.00%

0%

5%

10%

15%

20%

WoW Return

0%

-14%

-17%

-3%

-7%

2%

-6%

-15%

-8%

-30%

0%

30%

AS

HA

KA

CE

M

DA

NG

CE

M

WA

PC

O

CC

NN

Sia

m C

em

en

t

Ultra

tech

C

em

en

t

Se

me

n P

erse

ro

PP

C

Ho

lcim

(In

do

nesia

)

YTD Return

Industrial sector

The Industrial sector returned 4.47% w/w buoyed by gain in

DANGCEM (+17.78%) as WAPCO, CCNN and ASHAKACEM closed

flat. This week positive posture represents an improvement over the

penultimate week return of -1.97%.

While we have a cautios stance on the cement tickers in the

immediate term, we however feel that the sector appears strategically

positioned to benefit from: (1) recent campaign for concrete-made

road, (2) the government’s plan to continue road projects inherited

from the outgone regime and (3) proposed infrastructure spending

(increase in capex to 30% in the proposed 2016 budget, against 15%

in 2015 budget). In keeping with reality though, we feel it is too early

to celebrate the gain that may accrue to this sector as it is difficult at

the moment to accurately predict the successful implementation of the

budget, given the revenue challenge posed by free fall in crude oil

prices.

In similar vein, DANGCEM recently announced an expansion plan with

the construction of a $500mn cement plant in Edo state. The

expected productive capacity of the proposed Edo cement plant is

estimated at around 3million metric tonnes and largely oriented for

export to neighbouring countries. We are encouraged by the

competitive positioning of the two names. We expect cement needs

for some ongoing projects such as the planned expansion of Ibese

cement plant by Dangote serve to drive demand and hence impact

revenue performance for DANGCEM.

On the flip side, we are concerned by recurring challenges the

sector still grapples with relating to insufficient gas supply and

reliance on expensive LFPO, which has continued to put pressure on

OPEX and depress bottom line of firms in this space even with the

recent attempt at migrating to the use of coal.

While our short term outlook for the sector appears dim in the light of

the recurring challenges however, we expect improved performance

on account of increased infrastructure spending by the government in

the medium to longer term.


8

AFRICA*** Value DOD% MOM% YTD (%) 52 WK LO. 52 WK HI. DAILY VOL. MKT CAP. P/E P/BV DY (%)

NGSEINDX INDEX 24,689.69 0.10 5.00 -13.80 22,330.96 35,843.39 311.60 8,572.19 15.57 1.30 4.31

JALSH INDEX 49,654.51 2.19 5.74 -2.05 45,975.78 55,355.12 244.47 10,177.84 37.66 2.00 3.39

NSEASI INDEX 140.49 0.06 -0.97 -3.58 135.71 177.51 17.62 1,985.85 12.40 1.98 4.19

EGX 30 INDEX 5,793.74 0.70 -1.09 -17.30 5,526.02 9,833.48 114.07 246.86 7.25 0.76 2.35

MAURITIUS 1,850.00 -0.18 2.04 2.15 1,790.03 2,025.15 4.70 206.41 14.63 0.89 3.21

MOROCCO 263.65 -0.33 3.29 2.80 252.08 309.03 1.05 318.02 16.66 2.55 4.72

MSCI FM 478.31 0.04 2.59 -5.44 449.79 611.61 256.50 250.18 9.71 1.31 4.36

EMERGING** Value DOD% MOM% YTD (%) 52 WK LO. 52 WK HI. DAILY VOL. MKT CAP. P/E P/BV DY (%)

SHANGHAI SE 2,746.20 -0.63 -13.82 -22.41 2,638.30 5,178.19 14,118.50 23,204.57 14.48 1.59 2.24

S&P BSE SENSEX 23,569.81 2.54 -3.62 -9.75 22,600.39 30,024.74 25.94 39,202.16 18.13 2.54 1.58

KARACHI 100 31,896.84 1.38 2.89 -2.80 28,648.23 36,471.68 86.60 5,718.06 9.10 1.60 6.32

IBOV INDEX 39,808.05 1.25 3.21 -8.17 37,046.07 58,574.79 343.07 1,336.81 20.99 0.94 4.26

INDEXCF INDEX 1,731.83 0.34 7.68 -1.68 1,569.69 1,873.53 11,463.27 25,175.39 9.59 0.66 4.83

MSCI EM 711.24 -0.25 0.29 -10.44 686.74 1,069.13 17,943.88 6,310.59 10.89 1.22 3.18

DEVELOPED Value DOD% MOM% YTD (%) 52 WK LO. 52 WK HI. DAILY VOL. MKT CAP. P/E P/BV DY (%)

DOW JONES 15,973.84 2.00 -0.09 -8.33 15,370.33 18,351.36 132.57 4,892.09 14.49 2.74 2.82

S&P 500 INDEX 1,864.78 1.95 -0.83 -8.77 1,810.10 2,134.72 803.72 16,931.40 16.82 2.51 2.37

FTSE 100 INDEX 5,812.44 1.84 0.14 -6.89 5,499.51 7,122.74 1,083.60 1,603.72 25.70 1.65 4.58

CAC 40 INDEX 4,115.83 3.02 -2.24 -11.24 3,892.46 5,283.71 162.26 1,092.75 19.31 1.28 3.76

DAX INDEX 9,200.22 2.60 -3.61 -14.36 8,699.29 12,390.75 160.47 882.81 20.04 1.44 3.27

NIKKEI 225 16,022.58 7.16 -6.56 -15.82 14,865.77 20,952.71 3,405.22 269,783.87 17.62 1.42 2.00

HANG SENG 18,918.14 3.27 -3.09 -13.67 18,278.80 28,588.52 2,082.28 11,425.87 8.24 1.00 4.58

FTSE STR TIMES 696.09 1.65 3.00 0.02 651.85 824.62 138.70 57.64 11.71 0.90 6.52

MSCI U.S 1,768.52 1.98 -1.18 -9.29 1,716.31 2,044.90 901.05 17,927.39 17.34 2.52 2.33

EQUITY MARKET INDICES

Source: Bloomberg, Investment One Research.

9

52 Wk High 52 Wk Low 1M (%) 3M (%) 6M (%) 12M (%) YTD (%) 2015 (%)

All Share Index 35843.39 22330.96 5.00 -14.40 -19.59 -10.50 -13.80 -17.36

Sector 52 Wk High 52 Wk Low 1M (%) 3M (%) 6M (%) 12M (%) YTD (%) 2015 (%)

ACCESS Banking 7.09 3.48 8.75 -12.77 -5.75 -22.93 -15.46 -26.52

DIAMONDBNK Banking 4.91 1.50 -7.18 -35.38 -49.70 -52.00 -26.96 -58.78

FIDELITYBK Banking 2.27 1.13 -4.65 -12.14 -8.21 -1.60 -18.00 -7.41

FBNH Banking 9.95 3.28 9.17 -21.87 -39.72 -32.14 -23.39 -41.70

GUARANTY Banking 31.88 13.16 23.78 -29.21 -28.20 -2.65 -8.97 -27.80

STANBIC Banking 33.19 12.23 3.40 -32.98 -29.54 -43.78 -15.31 -38.78

SKYEBANK Banking 2.90 0.92 13.13 -38.46 -40.74 -35.38 -29.11 -40.60

UBA Banking 6.00 2.48 11.92 -23.02 -13.91 -3.00 -13.91 -21.40

FCMB Banking 3.74 0.84 -22.03 -54.00 -62.75 -54.00 -45.56 -32.13

ZENITHBANK Banking 25.48 8.83 29.24 -28.24 -24.13 -21.90 -13.17 -23.68

ETI Banking 23.02 14.20 -3.91 -16.19 -24.82 -2.70 -12.20 -9.58

STERLNBANK Banking 2.48 1.58 -2.23 -10.26 -18.60 -24.57 -4.37 -27.95

UBN Banking 11.74 4.70 1.92 -6.69 -27.30 -39.77 -23.19 -18.82

UNITYBNK Banking 5.00 0.58 9.68 -41.38 -61.58 -86.40 -39.29 124.00

WEMABANK Banking 1.12 0.77 0.00 2.04 11.11 6.38 0.00 4.17


ASHAKACEM Industrials 26.50 17.22 -5.66 13.58 6.38 43.93 0.00 14.16

DANGCEM Industrials 188.68 122.90 10.15 -10.08 -18.84 3.24 -13.82 -15.00

WAPCO Industrials 105.00 75.10 -7.78 -11.11 -22.71 1.90 -17.36 20.25

CCNN Industrials 13.23 7.31 -5.10 13.73 4.11 -10.69 -2.57 -10.01


FO Oil & Gas 342.00 146.51 3.64 17.93 59.07 93.50 3.64 44.80

CONOIL Oil & Gas 42.00 18.33 -25.91 -33.13 -44.92 -43.77 -25.91 -35.08

MOBIL Oil & Gas 175.00 118.06 10.07 14.83 3.64 6.40 -0.25 1.27

OANDO Oil & Gas 20.48 3.43 -0.53 -50.97 -67.64 -72.00 -35.93 -63.38

TOTAL Oil & Gas 188.89 134.05 -6.67 -2.10 -11.39 4.44 -4.77 3.16

SEPLAT Oil & Gas 481.57 151.74 42.47 11.06 -11.54 NA 24.19 -45.28


NB Breweries 184.99 88.00 0.52 -23.73 -23.26 -24.50 -28.38 -17.73

GUINNESS Breweries 192.00 92.87 4.66 -11.62 -1.40 4.65 -0.91 -28.40


PZ FMCG 35.00 19.08 9.06 -15.77 -33.74 -18.86 -14.79 7.98

UNILEVER FMCG 47.00 29.53 -31.72 -18.83 -27.98 -13.17 -31.72 20.81

CADBURY FMCG 44.00 12.00 35.94 -5.34 -45.71 -57.93 5.42 -57.13

DANGFLOUR FMCG N/A N/A N/A N/A N/A N/A N/A N/A

DANGSUGAR FMCG 8.12 5.20 0.18 -9.52 -5.00 -7.17 -5.47 -5.04

FLOURMILL FMCG 38.53 15.93 3.83 -11.32 -30.43 -32.38 -6.25 -46.94

HONYFLOUR FMCG 4.15 1.34 -17.22 -38.93 -48.08 -52.70 -27.32 -40.75

NESTLE FMCG 1102.50 670.00 -6.09 -14.20 -19.00 -6.87 -19.19 -15.00

UACN FMCG 44.49 15.58 13.70 -28.04 -47.30 -43.61 -6.02 -38.97


OKOMUOIL Agriculture 39.37 18.70 -11.15 0.35 16.79 -0.99 -4.29 19.53

PRESCO Agriculture 36.00 25.00 3.03 11.48 6.25 21.43 3.03 34.69

Sector Per formance


10

Name

Banks

TP Pr ice Up/Downside MCap. (US$'m)

P/E

2015E

P/E

2016E

EPS Growth

2015 P/BV 2015E ROE 2015E DY (%)

Access Bank Nigeria 6.24 4.10 52.13 595.85 2.13 3.00 26.46 0.34 18.05 13.63

FBNH Nigeria 6.20 3.93 57.87 708.71 2.31 2.17 18.06 0.25 14.62 2.88

GTBank Nigeria 24.21 16.55 46.28 2447.05 4.86 4.66 9.46 1.23 29.03 10.27

Diamond Bank Nigeria 2.97 1.68 77.04 195.48 2.01 1.63 -11.45 0.17 11.17 8.81

UBA Nigeria 10.70 2.91 267.66 530.39 1.83 1.97 2.63 0.33 22.20 12.92

Zenith Bank Nigeria 19.42 12.20 59.16 1924.33 3.75 3.62 8.59 0.67 20.35 13.63

Barclays South Africa 15131.46 15316.00 -1.20 8221.87 9.04 8.57 10.33 1.55 17.05 6.49

Nedbank South Africa 19955.21 19030.00 4.86 5957.79 8.46 8.22 12.36 1.37 15.96 5.89

Equity Bank Kenya 47.78 39.75 20.21 1473.66 8.25 6.82 28.97 2.11 29.24 4.87

KCB Kenya 57.01 40.00 42.52 1188.81 6.35 5.28 15.56 1.48 23.69 5.63

ADCB UAE 7.98 6.12 30.40 9323.46 7.14 6.83 25.68 1.38 20.35 7.27

Gulf Bank Kuwait N/A 208.00 N/A 2121.71 10.40 N/A 5.00 1.12 7.43 4.81

BPI Phillipines 92.04 89.65 2.67 7424.24 17.75 15.70 -9.28 2.34 13.25 2.03

SHB Saudi Arabia 33.03 24.20 36.50 3687.43 6.88 5.88 11.20 1.19 18.55 4.10

Average 2722.64 2485.36 53.55 3271.48 6.51 5.34 10.97 1.11 11.75 7.37

STOCK VALUATIONS AND PEERS

Industr ials


EV/EBITDA

2015E

P/E

FY 2014

P/E

FY 2015E

EPS Growth

2015/14 DY (%)

Ashaka Cement Nigeria 25.53 25.00 2.14 281.27 5.48 20.11 11.21 61.90 2.10

Dangote Cement Nigeria 178.85 146.50 22.08 12541.74 8.82 13.35 10.80 -20.51 4.83

Lafarge Wapco Nigeria 104.45 80.00 30.56 1830.66 6.75 11.50 8.96 -45.19 4.41

Siam Cement Thailand 548.11 428.00 28.06 14406.73 8.91 11.31 10.78 35.06 3.91

Cemex Mexico 12.71 8.47 50.11 6026.01 6.58 279.22 15.07 N/A 0.00

Ultratech Cement India 3171.84 2831.05 12.04 11403.28 13.30 37.02 23.85 -4.93 0.34

Semen Persero Indonesia 12251.50 10725.00 14.23 4753.46 8.40 13.60 12.89 3.60 3.46

PPC Ltd South Africa 2165.00 1287.00 68.22 493.36 4.69 8.88 7.51 -16.88 4.45

Holcim Indonesia 1045.91 920.00 13.69 526.78 7.95 N/A 19.59 -29.98 3.90

Average 1951.48 1646.01 26.09 5232.08 7.44 44.58 12.69 0.72 3.32

Agr iculture


EV/EBITDA

2015E

P/E

FY 2014

P/E

FY 2015E

EPS Growth

2015/14 DY (%)

Okomu Oil Palm Nigeria 30.15 29.00 3.97 138.98 7.04 16.40 12.48 -25.68 3.25

Presco Nigeria 32.38 34.00 -4.76 170.81 5.61 8.65 9.23 107.75 2.46

BW Plantation Indonesia 196.20 193.00 1.66 454.64 8.79 N/A 33.54 -27.82 N/A

United Malacca Malaysia 6.94 6.05 14.71 306.41 8.77 27.79 15.32 -33.28 2.64

Sampoerna Agro Indonesia 1842.00 1800.00 2.33 254.20 7.94 15.13 13.16 185.71 2.50

Kwantas Malaysia N/A 1.53 N/A 115.44 N/A N/A N/A 41.47 N/A

Average 421.53 343.93 N/A 240.08 7.63 16.99 16.75 41.36 2.71


11

Oil & Gas


EV/EBITDA

2015E

P/E

FY 2014

P/E

FY 2015E

EPS Growth

2015/14 DY (%)

Forte Oil Nigeria 145.57 342.00 -57.44 2237.87 28.43 75.62 35.89 124.18 N/A

Conoil Nigeria 26.45 18.33 44.30 63.90 N/A 21.31 N/A -72.85 N/A

Mobil Nigeria 135.47 159.60 -15.12 289.13 6.33 14.22 10.88 83.73 5.32

Oando Nigeria 8.21 3.78 117.28 228.54 16.18 N/A 34.36 -3434.57 11.64

Total Nigeria 146.15 140.00 4.39 238.80 5.60 12.16 8.36 -17.06 7.08

Seplat Nigeria 321.62 252.11 27.57 713.64 4.89 2.53 5.44 -63.77 7.03

Zhejiang Haiyue China N/A 11.23 N/A 667.64 N/A 198.06 10.07 81.25 N/A

Grupa Lotos Warsaw 29.94 24.40 22.70 1147.58 5.55 N/A 8.38 N/A 0.00

Erg Spa Italy 14.07 11.42 23.20 1920.94 4.84 140.50 19.32 -46.50 4.38

Hindustan Pet. Corp India 950.52 733.90 29.52 3647.71 6.55 16.59 7.53 38.71 3.80

Shell Oman 2.13 1.97 8.14 498.57 9.05 13.88 13.10 15.45 5.60

Turcas Petrol Turkey 1.78 1.33 34.21 121.76 44.08 N/A 5.86 N/A 2.78

Average 161.99 141.67 N/A 981.34 13.15 54.99 14.47 -329.14 5.29

Brewer ies


EV/EBITDA

2015E

P/E

FY 2014

P/E

FY 2015E

EPS Growth

2015/14 DY (%)

Nigerian breweries Nigeria 137.01 97.40 40.66 3879.90 7.47 20.19 15.26 -14.23 4.98

Guinness Nigeria 126.15 119.30 5.74 902.55 8.21 261.05 20.12 -18.55 2.09

Heineken Netherlands 80.47 73.55 9.41 47406.43 10.42 22.27 17.88 25.38 1.89

Ghana Breweries Ghana N/A 1.97 N/A 104.61 N/A N/A N/A -424.39 N/A

AEFES Turkey 20.36 16.73 21.72 3358.74 9.37 N/A 19.32 N/A 1.27

EABL Kenya 356.75 279.00 27.87 2167.46 9.80 24.76 19.55 37.36 3.03

CCU Chile 8070.33 6907.50 16.83 3624.20 7.62 21.13 15.94 1.05 2.73

Average 1465.18 1070.78 N/A 8777.70 8.82 69.88 18.01 -65.56 2.67

Consumer Goods


EV/EBITDA

2015E

P/E

FY 2014

P/E

FY 2015E

EPS Growth

2015/14 DY 2015E (%)

PZ Nigeria 24.16 21.90 10.32 436.84 9.71 25.60 19.64 -12.07 2.70

Unilever Nigeria 23.29 29.53 -21.14 561.27 15.11 147.65 42.92 -48.80 0.76

Cadbury Nigeria 17.74 18.08 -1.87 170.60 10.38 N/A 18.24 -76.56 1.57

DSR Nigeria 7.25 5.70 27.12 343.63 2.89 5.78 5.47 7.78 8.88

FMN Nigeria 31.24 19.50 60.23 257.08 5.75 2.07 8.70 95.58 11.18

Nestle Nigeria 837.54 695.00 20.51 2767.63 14.16 24.37 22.35 -0.11 3.63

UACN Nigeria 36.72 19.50 88.29 188.18 6.26 8.94 6.36 11.15 5.85

Strauss Group Israel N/A 5370.00 N/A 1484.48 N/A 27.23 15.30 0.46 N/A

Illovo sugar South Africa 2122.50 2202.00 -3.61 642.42 8.68 27.66 13.99 -9.85 2.18

Tongatt Hullet South Africa 13761.67 10290.00 33.74 880.38 7.19 14.02 9.36 -16.42 4.10

Jollibee Food Phillipines 220.91 209.60 5.40 4725.53 14.60 46.52 28.25 -11.25 1.15

Average 1424.55 1453.19 N/A 988.37 9.28 34.45 15.99 -4.65 111.77


Company Dividend Script *Dividend Interim/ Event Dates

2014/2015FYE Issue Yield Final Declaration Closure Payment AGM

ACCESS N0.35k Nil 5.37% FYE'14 final 13-Mar-15 24-Apr-15 7-May-15 27-May-15

ACCESS* N0.25k Nil 5.85% H1'15 Interim 20-Aug-15 3-Sep- 2015 10-Sep- 2015 Nil

AFRIPRUD N0.30k Nil 9.81% FYE'14 final 23-Mar-15 20-Mar-15 10-Apr-15 8-Apr-15

AFRIPRUD N0.17k Nil 6.14% FYE'15 Interim 29-Jul-15 19-Aug-15 TBA TBA

ASHAKACEM N0.45k Nil 2.10% FYE'14 final 28-Mar-15 21-Apr-15 6-May-15 5-May-15

BETAGLASS N0.62k Nil 3.48% FYE'14 final 30-Mar-15 12-Jun-15 10-Jul-15 09-Jul-15

BERGER PAINTS N0.75k Nil 7.50% FYE'14 final 5-Mar-15 17-Jun-15 23-Jul-15 21-Jul-15

CADBURY N0.65k Nil 1.63% FYE'14 final 30-Mar-15 15-May-15 11-Jun-15 10-Jun-15

CAP N0.88k Nil 2.47% FYE'14 final 30-Mar-15 TBD TBD TBD

CAVERTON N0.10k Nil 3.18% FYE'14 final 31-Mar-15 23-Apr-15 6-May-15 6-May-15

CCNN N0.35k Nil 2.83% FYE'14 final 31-Mar-15 24-Jul-15 18-Aug-15 13-Aug-15

COURTVILLE N0.04k Nil 8.00% FYE'15 Interim 23-Jul-15 10-Aug-15 31-Aug-15 TBA

CUSTODIAN N0.12k Nil 2.88% FYE'14 final 12-Apr-15 24-Jul-15 18-Aug-15 13-Aug-15

DANGCEM N6.00k Nil 3.33% FYE'14 final 26-Mar-15 20-Apr-15 30-Apr-15 13-Apr-15

DIAMONDBNK N0.10k Nil 2.21% FYE'14 final 31-Mar-15 16-Apr-15 4-May-15 30-Apr-15

ETI Nil 1 for 15 Nil FYE'14 final 21-Apr-15 25-Jun-15 TBA TBA

FBNH N0.10k 1 for 10 1.05% FYE'14 final 8-Apr-15 4-May-15 25-May-15 TBA

FCMB N0.25k Nil 7.74% FYE'14 final 23-Mar-15 3-Apr-15 24-Apr-15 23-Mar-15

FIDELITY N0.18k Nil 8.91% FYE'14 final 30-Mar-15 20-Apr-15 4-Jul-15 TBA

FIDSON N0.15k Nil 4.46% FYE'14 final 26-Mar-15 TBD TBD TBD

FO N3.45k Nil 1.01% FYE'15 final 01-Feb-16 6-Apr-16 14-Apr-16 7-Apr-16

GLAXOSMITH N0.75k 1 for 4 1.33% FYE'14 final 30-Mar-15 14-May-15 12-Jun-15 11-Jun-15

GUARANTY N1.50k Nil 5.21% FYE'14 final 5-Mar-15 17-Mar-15 31-Mar-15 31-Mar-15

GUARANTY* N0.25k Nil 1.14% H1'15 Interim 20-Aug-15 8-Sep- 2015. 21-Sep- 2015 Nil

GUINNESS N3.20k Nil 2.50% FYE'15 final 7-Sept-15 12-Oct-15 27-Nov-15 26-Nov-15

JBERGER N2.70k Nil 5.37% FYE'14 final 23-Mar-15 29-May-15 18-Jun-15 17-Apr-15

LEARNAFRICA N0.12k Nil 7.95% FYE'14 final 30-Mar-15 TBD 5-Jun-15 4-Jun-15

LIVESTOCK N0.10k Nil 4.41% FYE'14 final 27-Mar-15 28-May-15 18-Jun-15 17-Jun-15

MOBIL N6.60k Nil 4.18% FYE'14 final 25-Mar-15 30-May-15 4-Apr-15 TBD

MRS N0.88k Nil 1.74% FYE'14 final 30-Mar-15 TBD TBD TBD

NASCON N0.50k Nil 6.31% FYE'14 final 2-Apr-15 26-May-15 12-Jun-15 10-Jun-15

NAHCO N0.20k Nil 10.26% FYE'14 final 27-Mar-15 18-May-15 11-Jun-15 11-Jun-15

NB N3.60k Nil 3.7% FYE'15 final 10-Feb-16 9-Mar-16 12-May-16 11-May-16

NESTLE N17.50k Nil 1.68% FYE'14 final 25-Feb-15 27-Apr-15 TBD 11-May-15

OKOMUOIL N0.25k Nil 0.96% FYE'14 final 31-Mar-15 18-May-15 29-Jun-15 TBD

PZ N0.61k Nil 2.04% FYE 15 final 24-Aug-15 14-Sep- 2015 30-Sep- 2015 25-Sep-15

REDSTAREX N0.35k Nil 7.04% FYE'15 final 28-Jul-15 05-Aug-15 14-Sep-15 03-Sep-15

SEPLAT N18.00k Nil 4.63% FYE'14 final 26-Mar-15 TBD TBD 2-Jun-15

STANBIC N0.15k Nil 0.50% FYE'14 final 31-Mar-15 14-Apr-15 TBD TBD

STANBIC N0.90k Nil 3.46% H1'15 Interim 09-Jul-15 31-Jul-15 28-Aug-15 06-Aug-15

STERLNBANK N0.06k Nil 2.61% FYE'14 final 25-Mar-15 17-Apr-15 30-Apr-15 30-Apr-15

TOTAL N9.00k Nil 5.00% FYE'14 final 26-Mar-15 24-Apr-15 12-Jun-15 10-Jun-15

TRANSCORP N0.06k Nil 1.89% FYE'14 final 7-Apr-15 21-Apr-15 11-May-15 8-May-15

UNITED CAPITAL N0.20k Nil 9.25% FYE'14 final 25-Mar-15 27-Mar-15 20-Apr-15 16-Apr-15

UBA N0.10k Nil 2.08% FYE'14 final 26-Mar-15 9-Apr-15 27-Apr-15 24-Apr-15

UBA N0.20k Nil 6.06% H1'15 Interim 3-Sep-15 10-Sep-15 16-Sep-15 Nil

UNILEVER N0.10k Nil 0.24% FYE'14 final 26-Mar-15 13-Apr-15 15-May-15 12-May-15

WAPCO N3.60k Nil 4.00% FYE'14 final 13-Mar-15 1-May-15 TBD 22-May-15

ZENITHBANK N1.75k Nil 7.44% FYE'14 final 5-Mar-15 15-Mar-15 27-Mar-15 13-Mar-15

ZENITHBANK* N0.25k Nil 1.57% H1'15 Interim 13-Aug-15 24-Aug-15 28-Aug-15 TBD

Closure(s) & Payment(s) for the Year

Corporate Actions

Source: Company Filings and Investment One Research

13

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