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17 May

Weekly Market Review & Stock Recommendations – May 17, 2021

Dear Client/Reader,

Global Economic Roundup

Crude oil falls further on India Covid-19 cases, US pipeline restart•Oil prices fell on Friday after dropping about 3% a day earlier as coronavirus cases remained high in major oil consumer India and as a key fuel pipeline in the United States resumed operations after being shut due to a cyber attack.

US open: Stocks advance despite weaker-than-expected retail sales report

• Wall Street stocks opened higher on Friday despite market participants digesting a weaker-than-expected monthly retail sales report.

CBN Erases Exchange Rate on Its Website as Naira Falls

•The Naira fell against the U.S. Dollar on Friday as the Central Bank of Nigeria erased from its website the exchange rate that for about a year was seen as the government’s official rate.

Equities Market

The Nigerian Bourse closed bullish last week as the ASI advanced by 0.72% week-on-week to close at 39,481.89 points. Year-to-date returns closed at -1.96% at the end of the week.

Some of our recommended stocks are mentioned below;

ACCESS PLC :

Access bank delivered strong bottom-line figures despite a challenging and fast-changing macro and banking landscape occasioned by the COVID-19 pandemic. Access Bank has been driving its revenue growth through retail expansion, which has grown consistently across all income lines, driven by a strong focus on consumer lending, payments and remittances, digitisation of customer journeys, and customer acquisition at scale. Based on their performance over the years we see Access bank sustaining their positive results through the year.

The Q1’2021 result of ACCESS Plc showed that;

  • Interest income advanced by 10.74% from N113.75 bn in Q1’2020 to N125.97 bn in the current period.
  • Net interest income advanced by 30.12% from N72.21bn in Q1’2020 to N93.96 bn in the current period. 
  • Profit before tax grew by 29.73% from N46.29bn in Q1’ 2020 to N60.05bn in the current period           
  • Profit after tax advanced by 28.39% from N40.93 bn in Q1’2020 to N52.55 bn in the current period
  • Earnings per share EPS went up by 23.14% to N1.49 in the current period from N1.21 in Q1’2020.               
  • Access has a BVPS of  N22.31, a P/BV of  0.38x and a P/E of 5.67x.

UCAP PLC :

UCAP has over the years increased focus on the mass retail segment of the economy, which has been the center of their  product development initiatives as well as marketing activities. Products such as mutual funds allows the company to pool the investments of several investors and invest the pool in high yield, risk free instruments. In 2021, we see them growing their earnings through the optimisation of their channels and digitization of their platforms thereby maintaining impressive growth in their Profit after tax thereby impacting their EPS positively.

The Q1′ 2021 result of UCAP Plc result showed that:

  • Gross earnings increased by 62.50% from N1.92 bn in Q1’2020 to N3.12 bn in Q1’2021.       
  • Net operating income rose by 64.02% from N1.89 bn in Q1’2020 to N3.10 bn in Q1’2021.
  • Profit before tax rose by 66.95% from N1.18 bn in Q1’2020 to N1.97 bn in the current period.
  • Profit after tax increased by 67.68% to N1.66 bn in the current period from N991 mn in Q1’2020.       
  • Earnings per share went up by 68.18% from N0.66 in Q1’2020 to N1.11 in the current period.
  • UCAP has a BVPS of N3.61, P/BV of 1.73x and P/E ratio of 5.63x

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

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15 Apr

Headline Inflation Increases to 18.17% in March 2021; 0.82% higher than February 2021

Dear Client/Reader,

The National Bureau of Statistics just reported that the consumer price index, (CPI) which measures inflation increased to 18.17% (year-on-year) in March 2021. This is 82 basis points higher than the rate recorded in February 2021 (17.33%).

The percentage change in the average composite CPI for the twelve months period ending March 2021 over the average of the CPI for the previous twelve months period was 14.55%, representing a 0.50 percentage point increase over 14.05% recorded in February 2021.

Food Index Rose to 22.95%

Food index rose to 22.95% in March 2021. The average annual rate of change of the Food sub-index for the twelve-month period ending March 2021 over the previous twelve-month average was 17.93 percent, 0.68 percent points from the average annual rate of change recorded in February 2021 (17.25%). This rise in the food index was caused by increases in prices of Bread and cereals, Potatoes, Yam and other tubers, Meat, Fruits, Vegetable, Fish and Oils and Fats. On a month-on-month basis, the food sub-index increased to 1.90% in March 2021, up by 0.01 percent points from 1.89% recorded in February 2021.

Core Index stood at 12.67%

Price movements recorded by the Core index stood at 12.67% (year -on-year) in March 2021, up by 29 basis points as against 12.38% recorded in February 2021. The highest increases were recorded in prices of Passenger transport by air, Hospital services, Passenger transport by road, Pharmaceutical products, Paramedical services, Vehicle spare parts, Dental Services, Motor cars,  Maintenance and repair of personal transport equipment and Hairdressing saloons and personal grooming establishment.

Urban Index increased to 18.76%

The Urban index increased to 18.76% (year-on-year) in March 2021 compared to 17.92% recorded in February 2021, while the Rural index increased to 17.60% (year -on-year) in March 2021 as against 16.77% in February 2021. On a month-on-month basis, the urban index rose to 1.60% in March 2021, up by 0.02 percent compared to the rate recorded in February 2021, while the rural index also rose to 1.52% in March 2021, up by 0.02 percent above the rate that was recorded in February 2021 (1.50%).

Regards.

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08 Apr

Daily Financial Market Report for April 7, 2021

Equities market closes on a Positive note…ASI Gains 2 Basis Point

The Nigerian Stock Exchange (NSE) closed positive as bulls dominated proceedings in the market today. The benchmark All Share Index (ASI) appreciated marginally by 0.02% to close at 38,774.03. Similarly, Market Capitalization increased by N3 billion to close at N20.29 trillion while the Year-to-Date (YtD) returns settled at -3.72%.

Sectors performance was Significantly Bearish

Performance across sectors was significantly bearish as 4 out of the 5 sectors closed in the red zone. Insurance, Banking, Oil and gas and Industrial indices declined by 1.71%, 3.12%, 0.28% and 0.14% respectively, on the back of sell pressures recorded in the shares of STERLING (-9.47%), ZENITH (-4.11%), TRANSCORP (-3.66%), FIDELITY (-3.47%), GUARANTY (-3.28%), ACCESS (-2.47%), WAPCO (-2.33%), UBA (-0.83%), FBNH (-0.68%) and DANGSUGAR (-0.29%) among others. While Consumer goods sector advanced on the back of buy interests recorded in the shares of FLOURMILL (6.90%) and NESTLE (3.27%).

NASD Market

The NASD market closed positive after today’s trading activities as the Unlisted Securities Index (USI) increased by 0.13% to close at 749.57. Consequently, Market Capitalization also closed positive at N532.80 billion. Market activity measured by aggregate volume increased by 28.73% while value increased by 92.61%. Investors traded a total of 109,420 units of shares valued at N27.09 million in 7 deals. 

Please find here our Daily Financial Market update for today, April 7th, 2021.

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30 Mar

Daily Financial Market Report for March 30, 2021

Equities market closes on a Negative note…ASI Loses 57 Basis Point

The Nigerian Stock Exchange (NSE) closed negative as bears dominated proceedings in the market today. The benchmark All Share Index (ASI) depreciated by 0.57% to close at 39,267.11. Similarly, Market Capitalization decreased by N118 billion to close at N20.54 trillion while the Year-to-Date (YtD) returns settled at -2.49%.

Sectors performance was Broadly Bearish

Performance across sectors was broadly bearish as 2 out of the 5 sectors closed in the red zone. Insurance and Industrial indices declined by 0.16% and 1.90% respectively, on the back of sell pressures recorded in the shares of ETI (-4.72%), SOVRENINS (-4.17%), DANGCEM (-4.02%), FIDELITY (-2.92%), JBERGER (-2.68%), TRANSCORP (-2.50%), JAPAUL (-2.22%), JAIZ (-1.56%), INTBREW (-0.87%) and DANGSUGAR (-0.61%) among others. However, Banking and Consumer goods indices advanced by 0.94% and 0.07% respectively, on the back of buy interests recorded in the shares of LIVESTOCK (9.66%), UBA (4.35%), UACN (3.45%), ZENITH (2.95%), CHAMPION (2.27%), CADBURY (1.85%), STERLING (1.80%), STANBIC (0.91%) and GUARANTY (0.15%). Oil and Gas index remained unchanged.

NASD Market

The NASD market closed positive after today’s trading activities as the Unlisted Securities Index (USI) increased by 1.27% to close at 740.22. Consequently, Market Capitalization also closed positive at N526.16 billion. Market activity measured by aggregate volume decreased by 55.43% while value increased by 22.83%. Investors traded a total of 342,892 units of shares valued at N106 million in 13 deals. 

Please find here our Daily Financial Market update for today, March 30th, 2021.

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