Weekly Market Review & Stock Recommendations -September 27, 2021Yahya Abdulrahman
Global Economic Roundup
Crude oil prices trade at highest levels since 2018, nearing $80 a barrel
The price of crude oil was up in London on Friday morning, climbing for a fourth day amid tighter supplies and a strong appetite for riskier assets like crude oil, as well as high hopes for an economic recovery following COVID-19. After reaching a two-month high on Thursday, Brent oil futures edged near $77 a barrel on Friday, closing at their highest level since October 2018. There seems to be no end in sight to crude prices, as they are headed upwards. Taking risks at an excessive rate.
China Injects $18.6 Billion into Banking System During Evergrande Crisis
China’s central bank boosted its gross injection of short-term cash into the financial system after concern over a debt crisis at China Evergrande Group roiled global markets. The People’s Bank of China pumped 120 billion yuan ($18.6 billion) into the banking system through reverse repurchase agreements, resulting in a net injection of 90 billion yuan. That matches the amount seen on Friday, and was just below that of Saturday. Sentiment was also boosted after Evergrande’s onshore property unit said it plans to repay interest due Thursday on its local bonds.
Nigeria raises $4 billion in Eurobond, dubbed one of the biggest financial trades in Africa
In what is seen as “one of the biggest financial trades to come out of Africa in 2021,” Nigeria raised $4 billion via Eurobond. The Order book peaked at $12.2 billion, which enabled the Federal Government to raise $1 billion more than the $3 billion it initially announced. Bids were received from Europe, America and Asia with participation from local investors. On the upcoming Eurobond issue, Nigeria chose JPMorgan, Citigroup, Standard Chartered, and Goldman Sachs, as well as local firm Chapel Hill Denham.
Some of our recommended stocks are mentioned below;
UBA Plc is projected to have a Q3 2021 interest income of N329.54bn, up by 3.91% from N317.14bn in Q3 2020. PAT is estimated to increase from N77.13bn in Q3 2020 to N80.15bn in Q3 2021, bringing the EPS up to N2.34. UBA Plc Q2 2021 result showed that Interest income advanced by 8.29% from N205.59bn in Q2 2020 to N222.63bn in the current period. Net interest income increased by 24.09% to N148.07bn in Q2 2021 from N119.32bn in Q2 2020. Likewise, profit after tax advanced by 36.35% fromN44.43 bn in Q2 2020 to N60.58 bn in Q2 2021.Consequently, EPS went up by 36.29% from N1.24 in Q2 2020 to N1.69 in Q2 2021. UBA has a BVPS of N22.00,P/BV of 0.34x and P/E ratio of 2.20x
Dangote Cement Plc is projected to have a Q3 2021 revenue of N1.06 trn, up by 39.16% from N761.44bn in Q3 2020. PAT is estimated to increase from N208.69bn in Q3 2020 to N290.40bn in Q3 2021, bringing the EPS up to N17.04 in Q3 2021 from N12.25 in Q3 2020.
Dangcem Q2 2021 results showed that revenue grew by 44.81% from N476.85bn in Q2 2020 to N690.54bn in Q2 2021.Profit before operations advanced by 74% from N173bn in Q2 2020 to N302bn in Q2 2021. Profit before tax grew by 72% to N281.25bn in Q2 2021 from N162.85bn in Q2 2020. Profit after tax grew by 51.91% from N126bn in Q2 2020 to N191.63bn in Q2 2021. Consequently, EPS rose by 50.47% from N7.45 in Q2 2020 to N11.21 in Q2 2021. Dangcem has a BVPS of N47.24, P/BV of 5.19x and a P/E ratio of 10.93x.
Please find here our Weekly Market Review & Stock Recommendations for this week.