Weekly Market Review & Stock Recommendations – May 17, 2021

Weekly Market Review & Stock Recommendations – May 17, 2021

Dear Client/Reader,

Global Economic Roundup

Crude oil falls further on India Covid-19 cases, US pipeline restart•Oil prices fell on Friday after dropping about 3% a day earlier as coronavirus cases remained high in major oil consumer India and as a key fuel pipeline in the United States resumed operations after being shut due to a cyber attack.

US open: Stocks advance despite weaker-than-expected retail sales report

• Wall Street stocks opened higher on Friday despite market participants digesting a weaker-than-expected monthly retail sales report.

CBN Erases Exchange Rate on Its Website as Naira Falls

•The Naira fell against the U.S. Dollar on Friday as the Central Bank of Nigeria erased from its website the exchange rate that for about a year was seen as the government’s official rate.

Equities Market

The Nigerian Bourse closed bullish last week as the ASI advanced by 0.72% week-on-week to close at 39,481.89 points. Year-to-date returns closed at -1.96% at the end of the week.

Some of our recommended stocks are mentioned below;

ACCESS PLC :

Access bank delivered strong bottom-line figures despite a challenging and fast-changing macro and banking landscape occasioned by the COVID-19 pandemic. Access Bank has been driving its revenue growth through retail expansion, which has grown consistently across all income lines, driven by a strong focus on consumer lending, payments and remittances, digitisation of customer journeys, and customer acquisition at scale. Based on their performance over the years we see Access bank sustaining their positive results through the year.

The Q1’2021 result of ACCESS Plc showed that;

  • Interest income advanced by 10.74% from N113.75 bn in Q1’2020 to N125.97 bn in the current period.
  • Net interest income advanced by 30.12% from N72.21bn in Q1’2020 to N93.96 bn in the current period. 
  • Profit before tax grew by 29.73% from N46.29bn in Q1’ 2020 to N60.05bn in the current period           
  • Profit after tax advanced by 28.39% from N40.93 bn in Q1’2020 to N52.55 bn in the current period
  • Earnings per share EPS went up by 23.14% to N1.49 in the current period from N1.21 in Q1’2020.               
  • Access has a BVPS of  N22.31, a P/BV of  0.38x and a P/E of 5.67x.

UCAP PLC :

UCAP has over the years increased focus on the mass retail segment of the economy, which has been the center of their  product development initiatives as well as marketing activities. Products such as mutual funds allows the company to pool the investments of several investors and invest the pool in high yield, risk free instruments. In 2021, we see them growing their earnings through the optimisation of their channels and digitization of their platforms thereby maintaining impressive growth in their Profit after tax thereby impacting their EPS positively.

The Q1′ 2021 result of UCAP Plc result showed that:

  • Gross earnings increased by 62.50% from N1.92 bn in Q1’2020 to N3.12 bn in Q1’2021.       
  • Net operating income rose by 64.02% from N1.89 bn in Q1’2020 to N3.10 bn in Q1’2021.
  • Profit before tax rose by 66.95% from N1.18 bn in Q1’2020 to N1.97 bn in the current period.
  • Profit after tax increased by 67.68% to N1.66 bn in the current period from N991 mn in Q1’2020.       
  • Earnings per share went up by 68.18% from N0.66 in Q1’2020 to N1.11 in the current period.
  • UCAP has a BVPS of N3.61, P/BV of 1.73x and P/E ratio of 5.63x

Please find here our Weekly Market Review & Stock Recommendations for this week.

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