Weekly Market Review & Stock Recommendations – August 16, 2021

Weekly Market Review & Stock Recommendations – August 16, 2021

Dear Client/Reader,

Global Economic Roundup

Oil price falls below $70 per barrel, as OPEC urged to increase output

Oil fell below $70 a barrel as the United States urged the Organisation of Petroleum Exporting Countries, OPEC, and its oil-producing partners to boost output, saying current production was not enough and could threaten the global economic recovery. Brent Crude traded at $69.83, a decline of 0.80 cent, while the United States West Texas Intermediate (WTI) crude dropped $0.62, or 0.92 per cent, to $67.69 a barrel. Nigeria’s grade of crude oil Bonny Light traded at $69.79 per barrel. The OPEC and non-OPEC producers, at a joint meeting last month agreed to boost output by 400,000 barrels a day starting in August until the rest of their output cuts are phased out. Eurozone business activity soars to 15-year high in July.

Senate Passes $1 Trillion Infrastructure Bill, Handing Biden a Bipartisan Win

The Senate gave overwhelming bipartisan approval on Tuesday to a $1 trillion infrastructure bill to rebuild the nation’s deteriorating roads and bridges and fund new climate resilience and broadband initiatives, delivering a key component of President Biden’s agenda. With $550 billion in new federal spending, the measure would provide $65 billion to expand high-speed internet access; $110 billion for roads, bridges and other projects; $25 billion for airports; and the most funding for Amtrak since the passenger rail service was founded in 1971. It would also renew and revamp existing infrastructure and transportation programs set to expire at the end of September.

World Bank donates $15m to FCT for economic recovery

The Federal Capital Territory Administration FCTA has received $15m from the World Bank support through the Federal Government to cushion the effects of the COVID-19 pandemic on the territory, especially its impact on lives and livelihoods of the poor and vulnerable. The federal government World Bank-assisted economic recovery fund is put at $750 million for Nigeria’s 36 states and the FCT. The FCTA is especially eager to support the acceleration and expansion of this recovery to help businesses regain markets, income, and confidence.

Some of our recommended stocks are mentioned below;

HONYFLOUR PLC:

Honyflour Q1 2021 results showed that revenue grew by 25.23% from N26.39bn in Q1 2020 to N33.06bn in Q1 2021. Similarly, gross profit decreased by 12.18% to N3.67bn in Q1 2021 from N4.18 bn in Q1 2020. Profit after tax grew by 233% from N21 million in Q1 2020 to N70 million in Q1 2021, along with an 18% decrease in Sales and Administrative Expenses. Consequently, EPS rose by 231.58% from N0.06 in Q1 2020 to N0.19 in Q1 2021. Honyflour has a BVPS of N7.33, P/BV of 0.28x and a P/E ratio of 3.59x.

MAYBAKER PLC:

Maybaker Q2 2021 results showed an increase in revenue by 35.67% from N4.07bn in Q2 2020 to N5.52 bn in Q2 2021. PBT went up by 26.52% from N645 million in Q2 2020 to N816 million in the current period, despite a 103.98% increase in Administrative Expenses. PAT grew by 26.52% from N438 million in Q2 2020 to N555 million in Q2 2021, despite a 26% surge in taxes. EPS grew by 26%  to N0.32 in Q2 2021 from N0.25 in Q2 2020. Maybaker has a BVPS of N3.93, P/BV ratio of 1.12x and P/E ratio of 13.75x.

Please find attached.

Thank you.

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

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