06 August 2018 ( Lagos ) : The Nigerian equity market closed on a bearish note last week with the index shedding 0.37% WoW to close the week at 36,499.67pts. The negative performance was driven by sell pressures in Dangote Sugar (-3.03%), Dangote Cement (-2.14%), Nigerian Breweries (- 0.96%) and Access (-0.50%) which masked gains in Seplat (+13.6%), Guaranty (+1.14%) and Zenith (+0.63%). 

Parsing through the reading on a sectorial basis, the sectors closed mixed with the Banking, Food, Oil & Gas and Real Estate closing in the green while Brewers, Personal Care, Cement, and Insurance sectors closed in the red. Additionally, Notore Chemical Industries (Notore) undertook a listing by the introduction of its entire ordinary shares – 1.61 billion at a per share price of N62.50.

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.

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

Dangote Cement Plc. – ( DANGCEM ) STRONG BUY (FVE: N278.54). Analysts expect Dangote Cement to sustain earnings growth over 2018, at faster pace than their earlier estimate. To be specific, analysts are now more positive on the write back of the tax provisions booked thus far.

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.

Dangote Sugar Refinery Plc – ( DANGSUGAR ) NEUTRAL (FVE: N17.01). Over 2018, analysts expect weaker revenue for DSR owing to lower refined sugar prices and volumes with the latter driven by ongoing sugar smuggling activities within the country which has impacted on DSR’s share. Consequent to this alongside higher operating expenses, analysts expect weaker earnings in 2018.

PZ Cussons Plc – ( PZ ) SELL (FVE: N16.57). Their 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.

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Last week

Notore Chemicals Industries Plc listed its ordinary shares of 1.61 billion on the NSE last week, at a share price of N62.50. Click here to read more.

Great Nigeria Insurance Plc announced its voluntary delisting from the NSE. 

Transnational Corporation of Nigeria Plc reaffirmed its intention to divest its investment in Teragro (A fruit juice processing and

packaging business). 

This Week

Closure of Register: Red Star Express Plc, Flourmills Nigeria Plc.

Reporting for EasyKobo on Monday ,06 August 2018 in Lagos, Nigeria

Source: ARM Securities Limited

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