Weekly Market Review & Stock Recommendations – May 24, 2021

Weekly Market Review & Stock Recommendations – May 24, 2021

Dear Client/Reader,

Global Economic Roundup

Crude oil jumps on weather concerns in Gulf of Mexico•Oil prices jumped 2% on Friday after three days of losses, driven higher as a storm formed in the Gulf of Mexico, but were on track for a weekly fall as investors braced for the return of Iranian crude supplies after officials said Iran and world powers made progress a nuclear deal.

US open: Stocks trade higher as tech stocks attempt rebound

• Wall Street stocks traded higher amid a rebound in tech shares.

The Dow Jones Industrial Average was up 0.27% at 33,986.80, while the S&P 500 was 0.62% firmer at 4,141.30 and the Nasdaq Composite came out the gate 1.20% stronger at 13,458.99.

GDP: Agriculture sector grows by 2.28% in Q1 2021

•Nigeria’s agricultural sector grew by 2.28% in real terms in Q1 2021 compared to a growth of 3.42% in Q4 2020 and 2.20% in Q1 2020.

This was disclosed in the Q1 2021 GDP report, released by the National Bureau of Statistics (NBS) on Sunday. Real GDP grew 0.51% in Q1 2021 compared to 0.11% in Q4 2020.

Equities Market

The Nigerian Bourse closed bearish last week as the ASI declined by 2.93% week-on-week to close at 38,324.07 points. Year-to-date returns closed at -4.83% at the end of the week.

Some of our recommended stocks are mentioned below;

GUARANTY BANK PLC :

GTB holds a well structured and appropriately positioned balance sheet which has assisted in delivering reasonable and sustainable returns, despite the macroeconomic uncertainties that persist in the business environment. Guaranty is expected to benefit from the move to holdco structure by tier 1 banks to improve their revenue sources. The Bank has clearly distinguished itself in the Nigerian financial services industry through superior service quality, unique customer experience and sound financial indices.

The Q1’2021 result of GTB Plc showed that;

  • Interest income declined by 26.85% from N75.36 bn in Q1’2020 to N55.13bn in the current period. 
  • Net interest income went down by 18.43% from N64.28bn in Q1’2020 to N52.44 bn in Q1’2021
  • Profit before tax declined by 7.77% from N58.21bn in Q1’2020 to N53.68bn in the current period.         
  • Profit after tax went down by 9.03% from N50.07 bn in Q1’2020 to N45.55bn in the current period.
  • Earnings per share from N1.77 in Q1’2020 to N1.60 in Q1’2021.               
  • GTB has a BVPS of N24.50, a P/BV of 1.18x and a P/E ratio of 18.13x.

DANGOTE SUGAR PLC :

Dangote Sugar’s revenue drew strength from the performance of its flagship brand, the 50kg sugar, which accounted for N206.444 billion or at least 96 per cent of its share of the sugar market. We see their revenue from the retail and industrial sale of sugar increase significantly through out the year, hence supporting a bottom-line growth. 

The Q1′ 2021 result of Dangote Sugar Plc result showed that:

  • Revenue grew by 41.46% from N47.63 bn in Q1’2020 to N67.39 bn in Q1’2021.        
  • Gross profit increased by 41.82% to N18.04 bn in Q1’2021 from N12.72 bn in Q1’2020. 
  • Profit from operations advanced by 47.72% from N10.75 bn in Q1’2020 to N15.88 bn in Q1’2021. 
  • Profit before tax grew by 25.66% to N9.51bn in Q1’2021 from N11.95 bn in Q1’2020. 
  • Profit after tax grew by 30.30% from N6.37 bn in Q1’2020 to N8.30 bn in Q1’2021, despite a 16.24% increase in income tax expenses.          
  • Earnings per share rose by 28.30%, from N0.53 in Q1’2020 to N0.68 in Q1’2021. 
  • Dangote Sugar has a BVPS of N10.95, P/BV of 1.55x and P/E ratio of 25.00x.

Please find here our Weekly Market Review & Recommendations update for today, May 24th, 2021

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