2 July 2018 ( Lagos ) :All opinions and recommendations on below stocks are from analysts at ARM Securities limited. Easykobo does not endorse or oppose any recommendations expressed in this article. 

According to analysts at ARM Securities Limited the Nigerian equity market ended last week positive, gaining 1.10% WoW. For the quarter ended June 2018, the market was down 7.8% QoQ, however, YTD performance is positive (+0.09%) supported by a strong Q1 (+8.5% QoQ). The positive run over the week was driven by gains in bellwether stocks: TOTAL (+8.64%), NESTLE (+5.35%), WAPCO (+5.00%), STANBIC (+6.67%) and NB (+3.35%). On a sectorial basis, the Food (+3.72%), Personal Care (+3.18%), Brewers (+2.05%), Cement (+1.87%) and Oil & Gas (+0.53%) sectors reported positive return WoW.

United Bank for Africa Plc – ( UBA ) STRONG BUY (FVE: N14.10). Analysts expect meaningful improvement in UBA’s profitability over 2018 on the back of deposit growth, increased loan book, expansion in its trading book, healthier asset quality, lower loan-loss provision, and resilience in fee income.

First Bank of Nigeria Holdings Plc –( FBNH ) STRONG BUY (FVE: N14.40). FBNH looks increasingly attractive underpinned by improving asset quality. Precisely, analysts see further potential upside from lower provisioning, resilience in NIM, operational efficiency and possible streamlining of branches.

Dangote Cement Plc ( DANGCEM ) OVERWEIGHT(FVE:N256.85).Analysts remain broadly positive on DANGCEM and expect the company to sustain earnings growth, albeit at a much slower pace than 2017. Specifically, they see volume induced revenue growth and lower energy as key drivers of earnings in FY 18, relative to the price-induced growth story in prior year.

Guinness Nigeria Plc – ( GUINNESS ) SELL (FVE: N88.21). Guinness is poised for further earnings recovery into 2019 underpinned by lower operating and finance expenses. However, from a valuation standpoint, analysts believe the stock is expensive due to the dilutive impact of the recently concluded rights issue.

PZ Cussons Plc – ( PZ ) SELL (FVE: N16.57). Analyst’s sell rating on PZ is premised on expected slower recovery in volumes due to weak income levels. Additionally, the recent rise in Brent crude is expected to stoke pressures on petrochemical prices which would weigh on gross profit and earnings.

Seplat Petroleum Development Company Plc ( SEPLAT ) – STRONG BUY (FVE: N975.27). The case for Seplat remains higher crude oil prices and volumes, unrecognized capital allowance, reserve accretion, higher receipt from crude oil lifted in OML 55 as well as the company’s extended debt maturity profile which feeds into an improved cash position.

Okomu Oil Plc – ( OKOMUOIL ) NEUTRAL (FVE: N102.33). Okomu is analyst’s most preferred pick in the Palm oil sector, as 2018 presents opportunities for stronger volumes growth, better operating efficiency, and lower finance cost which guides to improved earnings over FY 18.

Corporate Benefit Tracker

Last week

The NSE announced the final list of Incoming and Outgoing companies for the various indices following the completion of the Mid-Year Review of the NSE indices.

Dangote Cement Plc announced a proposed capital raising of up to N150 billion through the issuance of a Commercial Paper.

CCNN Plc announced a proposed merger of the Company’s business and Kalambaina Cement Company Ltd.

This Week

Closure of Register: Trans-Nationwide Express Plc, UPDC REIT.

AGM: Beta Glass Plc, Learn Africa Plc, Presco Plc, Lasaco Assurance Plc, Eterna Plc.

Dividend Payment: Eterna Plc, NPF Microfinance Bank Plc, The Initiates Plc.

Source: Analysts at ARM Securities Limited.

Reporting for EasyKobo on Monday , 2 July 2018 2018 in Lagos, Nigeria

Note: THIS ARTICLE PUBLICATION IS COPYRIGHT OF ARM SECURITIES LIMITED AND NOT TO BE REPRODUCED OR REPRINTED IN ANY FORM WITHOUT THE EXPRESS PERMISSION OF ARM SECURITIES LIMITED.