Weekly Market Review & Stock Recommendations -February 13, 2023

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Global Economic Roundup

Crude Oil Bounces Back As Earthquake In Turkey Creates Supply Concerns

Oil prices are on the rise, with WTI and Brent benchmarks both up around 3% on Tuesday following the devastating earthquake in Turkey. By 12:17 pm ET, WTI had risen $2.54 to $76.55 per barrel—a 3.43% rise on the day. The Brent benchmark was trading up $2.31 per barrel, to $83.30—a 2.85% climb. China’s reopening progress is also pressuring prices upward as the market eyes a demand boost from its zero-Covid transition. Meanwhile, Saudi Arabia has lifted the price of its flagship crude oil for Asian buyers, signaling that OPEC’s leader also views China’s reopening as legitimate. On the supply side, oil export disruptions have created a stir in the market following a pair of major earthquakes that resulted in the deaths of more than 5,000, and Norway’s shutdown of its Phase 1 535,000 bpd Johan Sverdrup oilfield due to a technical fault in a cooling system. The 1 million barrel per day Ceyhan oil terminal in southern Turkey stopped operations on Monday, according to Tribeca Shipping Agency, who added that as a whole, the ports in southern Turkey have been affected by the earthquake. Oil loadings were expected to resume today, but inclement weather caused a disruption in berthing. Key oil pipelines in the country managed to escape damage. 

Black women are gaining ground in the labor market but still face unique barriers

A decrease in the unemployment rate of Black women is heartening, but labor experts warn that the trend shouldn’t create any false notions about equity in the workforce. The unemployment rate for the entire Black population has avoided ticking up since August, coming in at 5.4% in January, according to seasonally adjusted data released by the Bureau of Labor Statistics two weeks ago. January’s drop in Black unemployment was propelled by gains made by Black women, whose unemployment rate excluding teenagers dropped to 4.7% in January from 5.5% in December. Black men, by comparison, saw unemployment tick up to 5.3% in January from 5.1% in December. Both the rate of unemployment for all Black people and for women specifically are at their lowest levels in more than a year. The last time the Black unemployment rate was below 5.5% was in September 2019, while Black women last had a sub-5% unemployment rate in November 2021. The unemployment rates of white, Asian and Hispanic/Latino workers all increased from December to January. Still, Black workers have the highest unemployment rate when compared with white, Asian and Hispanic/Latino workers. 

Bamboo secures digital broker license from SEC 

Bamboo Systems Technology Limited (Bamboo), an online brokerage firm, on Thursday, announced that it has been granted a digital sub-broker license from Nigeria’s Securities and Exchange Commission (SEC). A statement issued by the firm said the new license allows the company to operate in the Nigerian capital market and include Nigerian securities on its platform. “SEC’s issuance of the license to Bamboo ensures oversight of the relationship with its sponsoring broker, Lambeth Capital, while also empowering it to enter into partnerships with multiple brokers to serve its clients,” the statement said. It noted that the license will also enable Bamboo to deepen its relationships with financial service providers to offer its API services. Established in 2019, Bamboo is an online brokerage app that allows Africans to invest in real-time in local and foreign asset classes. On the app, users can invest fractionable amounts in their favourite publicly listed US companies from Tesla to Apple, ETFs, mutual funds, or fixed-income products. According to the statement, Bamboo is focused on its commitment to best practices and allowing its retail investors the ability to trade local securities on the Nigerian Exchange Group. In 2021, the firm said it began the rigorous application process for the SEC’s digital sub-broker license which was introduced that year. This, the brokerage firm said, included a thorough examination of its finances and governance process. Commenting on the development, the Chief Executive Officer (CEO) and Co-founder of Bamboo, Richmond Bassey, said: “We are thrilled to reach this important milestone and are fully committed to our obligations as registered digital brokers.” Since the launch of Bamboo, he said they work to provide the best technology solutions, backed by industry best practices, to allow Nigerian retail investors to access an unprecedented number of digital securities to build long-term wealth. “We are grateful for our collaboration with the SEC, which has shown its dedication to protect investors while allowing for innovation to flourish,” Mr Bassey said.

Some of our recommended stocks are mentioned below;

MTNN:

MTNN Plc FY 2022 results showed an increase in revenue by 21.64% from ₦1.65 trn in FY 2021 to ₦2.01 trn in FY 2022. Operating profit advanced from ₦584.74bn in FY 2021 to ₦733.29bn in FY 2022, reflecting an increase of 25.40%. Profit before tax grew by 22.28% from ₦436.68bn in FY 2021 to ₦533.97bn in the current period, despite a 33.19% increase in finance costs. Profit after tax rose by 20.16% from ₦298.65bn in FY 2021 to ₦358.87bn in FY 2022. EPS increased by 21.27% to
₦17.79 in FY 2022 from ₦14.67 in FY 2021. MTNN has a BVPS of ₦9.14, P/BV of 26.68x and P/E ratio of 13.71x.

NB:

Nigerian Breweries Plc is projected to have a FY 2022 revenue of N576.07bn, up by 31.74% from N437.28bn in FY 2021. Profit after tax is estimated to grow from N12.67bn in FY 2021 to N16.70bn in FY 2022 with an EPS of N2.56

Nigerian Breweries Plc Q3 2022 results showed an increase in revenue by 27.21% from ₦309.28bn in Q3 2021 to ₦393.45bn in Q3 2022. Operating profit advanced from ₦24.74bn in Q3 2021 to ₦35.39bn in Q3 2022, reflecting an increase of 43.06%. Profit before tax grew by 49.89% from ₦12.74bn in Q3 2021 to ₦19.09bn in the current period, as finance income grew by 172.63% and finance cost dropped by 48.82%. Profit after tax rose by 79.58% from ₦8.22bn in Q3 2021 to ₦14.76bn in Q3 2022. EPS increased by 78.43% to ₦1.82 in Q3 2022 from ₦1.02 in Q3 2021. Nigerian Breweries has a BVPS of ₦23.06, P/BV of 1.76x and P/E ratio of 16.75x

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