MorganCapital Group
Equity Research Nigeria
And the bulls dominate play with another week of gains
The Nigerian Equities Market sustained another week of gains. The market was up by 1% to
41,751.55 up from 41,440.19 in the just concluded trading week. The positive market sentiment is
supported by the expectation that most companies will generally turn out good performances
when the FY 2013 earnings season comes through. This expectation has given impetus to the
possibility that these companies will reward investors with good dividend payouts. Going into
the new trading week, we expect positive investor sentiments to pervade the market and sustain
another week of gains as we approach the last earnings season for the 2013 fiscal year.
We urge our subscribers to continue to invest based on the principles of sound fundamentals at
good entry prices bearing in mind that in a bear market, stocks with good fundamentals have the
capacity to retain value, and even when their prices crash, they are the quickest off the mark in
price appreciation when the market sentiment becomes bullish.
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MorganCapital Group
Equity Research Nigeria
Top 5 Nigerian Equities League for the Week commencing [20/01/2014]
FY 2012[Actual]
Ranking
For The
Week
NSE
Bloomberg
*Current
Recommended
Investment
Ticker
Ticker
Price [N}
Entry Price [N]
Horizon
JBERGER:NL
65.10
65.10or less
12 Months
Fair
Expected
Value/Exit
Returns
Price [N]
[%]
79.08
21.47
P/E
FY 2013 [Forecast]
Net Margin
[%]
EPS
[N]
Latest Result
Exit
Dividend
P/E
Yeild [%]
11.58
4.61
Turnover/
Gross Earnings
[N'm]
[9M -13]
1 JULIUS BERGER
2 FBNH
3 DANGSUGAR
4 ACCESS
5 TOTAL
10.1
4.06
6.83
PAT
EPS
[N'm)
[N]
[9M -13]
136,622
3,776
[9M- 13]
[9M -13]
3.15
FIRSTBAN:NL
16.10
16.10 or less
12 Months
19.25
19.57
6.99
26.34
2.20
7.00
6.21
288,270
[9M -13]
59,085
[9M -13]
1.81
DANGSUGAR:NL
12.23
12.23 or less
12 Months
14.30
16.93
11.62
10.33
1.10
13.00
4.91
77,701
[9M -13]
9,628
[9M -13]
0.80
ACCESS:NL
9.57
9.57 or less
12 Months
10.64
11.18
5.02
18.43
1.87
5.69
5.22
1.08
TOTAL:NL
180.00
180.00 or less 12 Months
197.79
9.88
10.90
2.14
15.11
13.09
6.94
154,427
27,597
[9M -13]
[9M -13]
174,331
3,260
*Price as at 17/01/2014.
Commentary
Julius Berger comes in at number one on the log this week after the construction company shed some weight in the
course of the week. The Company currently has an upside potential of 21.47% and our dividend expectation is N3.00. The
Company was in the news recently when the US Justice Department charged the Company N5.1billion ($32million) for
bribing Nigerian Officials to obtain and retain contracts contacts related to work for the Eastern Gas Gathering System
(EGGS), a project valued at $387million. We think this may have impacted on the price given the expected cash outflow.
However, it is our opinion that the Company may have already adjusted its cash flow to reflect this position as the case
has lingered for quite a while before the ruling was delivered. We therefore do not expect any huge unexpected cash
outflow for 2013.
[email protected]
9.60
MorganCapital Group
Equity Research Nigeria
FBNH, drops to the second position on the log for this week with a potential upside of 19.57% from current price to our
estimate fair value. Our dividend expectation for FY 2013 is N1.00 per share
Dangote Sugar comes in at the third position on our league table. The company currently has an upside potential of
16.93% from current price to our estimate fair value. Our dividend forecast for the stock is 60K
Access Bank comes in at the fourth position on the top-5 league table this week after the stock made its debut on the
league table some weeks back.
The Bank currently has an upside potential of 11.18% and our dividend expectation is
50K
Total Nigeria takes up the fifth position on the league table for this week. The stock remains well positioned in the
downstream oil marketing sector despite its many challenges. Total stock has a potential upside of 9.88% from current
price to our estimate fair value. Our forecast dividend for FY 2013 is N12.50
For other stocks that make up the top ten on our league table and other company specific research reports, investors can send their enquires to
[email protected]. Our research is based purely on fundamentals and emerging verifiable information. Kindly note that
our league table is subject to change based on fluctuations of market prices and/or a review of our fair value estimates. These reviews are based on
fundamentals and verifiable information coming from the companies.
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