Weekly Market Review & Stock Recommendations – July 12, 2021
Dear Client/Reader,
Global Economic Roundup
Oil prices rise over 2% as U.S. inventories decline
Oil prices rose for a second day on Friday as the market reacted to falling US inventories, and signs of strong Asian demand from both China and India added support. Brent crude oil futures were up $1.43, 1.93%, at $75.55. U.S. West Texas Intermediate futures were up $1.62, or 2.2%, at $74.56.
Still, prices on both sides of the Atlantic ended the week little changed, despite significant daily fluctuations. Prices were weighed down early in the week by the collapse of output talks between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+. Gains in oil prices were capped by worries that members of the OPEC+ group could be tempted to abandon output limits that they have followed during the COVID-19 pandemic.
UK’s trade minister to meet U.S. counterpart on free trade threats
Britain’s international trade minister Liz Truss will discuss how to tackle threats to free and fair trade with U.S. Trade Representative Katherine Tai during a five-day visit to the United States .
She will visiting the U.S. to build on the progress already made on tackling market-distorting practices that threaten the future progress and prosperity we can make around the world through free and fair trade. She will also travel to the West Coast to meet businesses in a bid to promote Britain as a destination for tech investment. Britain and the United States had started talks on a post-Brexit bilateral free trade deal while former President Donald Trump was in office but failed to reach an accord before Joe Biden entered the White House in January.
Twitter ban: ECOWAS court merges four suits against Nigerian government
The Community Court of Justice of the Economic Community of West African States, ECOWAS, has merged all the four cases brought before it by different applicants against the Federal Government of Nigeria over the suspension of the microblogging platform, Twitter in Nigeria.
These cases were filed by the Socio-Economic Rights and Accountability Project, SERAP, and 196 others, Media Rights Agency and eight others, Patrick Elohor and Malcolm Omirhobo, respectively.
In the suit against the Nigerian government, the applicants sought to challenge the action of the respondent in suspending Twitter in Nigeria. The ECOWAS also adjourned to September 29, 2021, for a hearing to enable all parties to organize themselves for trial.
Some of our recommended stocks are mentioned below;
DANGSUGAR PLC:
Dangsugar Q1 2021 results showed that revenue grew by 41.46% from N47.63bn in Q1 2020 to N67.39bn in Q1 2021. Similarly, gross profit increased by 41.82% to N18.04bn in Q1 2020 from N12.72 bn in Q1 2020. Profit from operations advanced by 47.72% from N10.75bn in Q1 2020 to N15.88bn in Q1 2021. Profit before tax grew by 25.66% to N9.51bn in Q1 2021 from N11.95bn in Q1 2020. Profit after tax grew by 30.30% from N6.37bn in Q1 2020 to N8.30bn in Q1 2021, despite a 16.24%increase in income tax expenses. Consequently, EPS rose by 28.30% from N0.53 in Q1 2020 to N0.68 in Q1 2021. Dangsugar has a BVPS of N10.95,P/BV of 1.55x and a P/E ratio of 6.25x.
PRESCO PLC:
Presco Plc Q1 2021 result showed that Revenue grew by 47.40% from N5.38bn in Q1 2020 to N7.93bn in the current period. Similarly, gross profit increased by 52.86% from N4.20bn in Q1 2020 to N6.42bn in the current period. Operating profit went up by 84.21% from N2.85bn in Q1 2020 to N5.25 in the current period. Profit before tax rose by 110.64% to N4.95bn in Q1’2021 from N2.35 bn in Q1’2020, supported by an 40.92% decline in finance cost. Profit after tax advanced by 113.33% from N1.80 bn in Q1’2020 to N3.80 bn in Q1’2021. Consequently, earnings per share grew by 113.33%, from N1.80 in Q1’2020 to N3.84 in Q1’2021. Presco has a BVPS of N34.89, P/BV of 2.18x and a P/E ratio of 0.94x. Please find attached.
Please find here our Weekly Market Review & Stock Recommendations for this week.
