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Markets

It’s half year and these are 7 stocks to Buy, sell or hold

Every week Nairametrics brings to you a list of stocks considered as Buy, sell or hold from some of the best Fund Managers in the country.

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These stocks have gained over 25% since we recommended them less than 6 months ago

Every week Nairametrics brings to you a list of stocks considered as Buy, sell or hold from some of the best Fund Managers in the country. This week, we take a look at 7 stocks that are considered a buy or sell by ARM Research, a leading Fund Manager in the country.

As usual, these are not a “buy or sell recommendation” for stocks. Always consult your financial advisor before making an investment decision.


ARM| The NGSE ASI reversed previous gains to decline 1.71% WoW last week, closing at 37,625.59 pts. The decline was largely due to negative performances in Forte Oil (-19.79%), Lafarge (-4.76%), Nestle (-4.76%), Zenith Bank (-2.80%), Nigerian Breweries (-2.71%), Unilever (-1.90%) and Dangote Cement (-1.75%).

On a sectorial basis, the Oil & Gas (-5.69%), Food (-4.16%), Personal Care (-3.47%), Brewers (-2.49%) and Cement (-1.94%) sectors closed in red, offsetting gains in the Construction (+4.53%) and Insurance (+0.53%) sectors.

  • United Bank for Africa Plc – STRONG BUY (FVE: N14.10). We expect meaningful improvement in UBA’s profitability over 2018 hinged on growth in its deposit, increased loan book, expansion in its trading book, healthier asset quality, lower loan-loss provision, and resilience in fee income.
  • Dangote Cement Plc – OVERWEIGHT (FVE: N256.85). We remain broadly positive on DANGCEM and expect the company to sustain earnings growth, albeit at a much slower pace than 2017. Specifically, we see volume induced revenue growth and lower energy cost as key drivers of earnings in FY 18, relative to the price-induced growth story in prior year.
  • Guinness Nigeria Plc – SELL (FVE: N88.21). Guinness is poised for further earnings recovery into 2019 underpinned by lower operating and finance expenses. However, from a valuation standpoint, we believe the stock is expensive due to the dilutive impact of the recently concluded rights issue.
  • Dangote Sugar Refinery Plc – NEUTRAL (FVE: N20.23). We are cautiously optimistic on Dangote Sugar due to the recent smuggling of cheaper refined sugar which impacted on the company’s market share and, by extension, revenue. Irrespective, we believe the moderation in input costs would provide some support to 2018 earnings.
  • PZ Cussons Plc – SELL (FVE: N16.57).  Our sell rating on PZ is premised on expected slower recovery in volumes due to weak income levels. Additionally, the recent rise in Brent crude is expected to stoke pressures on petrochemical prices which would weigh on gross profit and earnings.
  • Seplat Petroleum Development Company Plc – STRONG BUY (FVE: N975.27). The case for Seplat remains higher crude oil prices and volumes, unrecognized capital allowance, reserve accretion, higher receipt from crude oil lifted in OML 55 as well as the company’s extended debt maturity profile which feeds into an improved cash position.
  • Okomu Oil Plc – NEUTRAL (FVE: N102.33). Okomu is our most preferred pick in the Palm oil sector, as 2018 presents opportunities for stronger growth in volumes, better operating efficiency, and lower finance cost which guides to improved earnings over FY 18.

Specta

Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

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Stock Market

United Capital Plc CEO purchases additional 1.3 million shares worth N7.19 million

United Capital Plc CEO has purchased an additional 1.3 million units of the firm’s shares worth N7.19 million.

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Commercial paper, United Capital Asset Management explains mutual funds’ positive performance

The CEO of United Capital Plc, Mr. Peter Ashade has purchased an additional 1.3 million units of the firm’s shares worth N7.19 million, maintaining a 3-monthly buying streak.

This is according to a recent disclosure signed by the firm’s secretary, Leo Okafor, and sent to the Nigerian Stock Exchange market today, as seen by Nairametrics.

The recent deal which took place on the 22nd of January, 2021 saw the United Capital boss purchase an additional 1,330,613 units of the firm’s share at N5.40 per share, totaling N7, 185,310.2.

Nairametrics learned that the recent deal raises the total number of shares purchased by the CEO in the last three months by an additional 6,000,000 units.

What you should know

  • Mr. Ashade earlier purchased additional 1.5million units of United Capital Plc shares, worth N8.03 million, as reported by Nairametrics.
  • Nairametrics also reported the purchase of one million units of the United Capital Plc shares by its CEO.
  • As of the time of reporting this, United Capital Plc share price currently trades at N5.40, down by 0.92%.
  • The firm has a current market capitalization of N32.4 billion and 6million outstanding shares.
  • The recent deal might be an indicator of strong investors’ confidence in the potentials of the firm.

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Spotlight Stories

Airtel, WAPCO, MRS rally up, investors gain N46 billion

The All Share Index gained 0.21% to close at 41,088.96 index points. Year to date return and market capitalization settled at 2.03%, and N21.49 trillion respectively

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Nigerian banking stocks remain most liquid stocks, as investors gain N25.1 billion, DANGOTE CEMENT, OKOMUOIL and GUINNESS drag Nigerian Stock market down,  SEPLAT, GUINNESS, Breaks Nigerian Bourse Support Levels, Investors Lose N49 Billion  

Nigerian Stocks ended the first trading session on a bullish note.

The All Share Index gained 0.21% to close at 41,088.96 index points. Year-to-date return and market capitalization settled at 2.03%, and N21.49 trillion respectively. Investors gain N45.49 billion.

  • A total volume of 333 million units of shares, valued at N2.64billion exchanged hands in 5,640 deals. TRANSCORP (-5.26%) finished the most traded shares by volume at 48.9million, while ZENITHBANK (0.00%) topped by value at N418 million.
  • Market breadth was however inverse of the broad index with 30 losers against 19 gainers. MRS (+9.82%) led the gainer’s chart today, while CILEASING (-10.00%) was the top loser.
  • Performance across sectors was mixed; like Oil & Gas (-0.80%), Consumer Goods (-0.72%) and Insurance (-0.58%) closed in red, while the Industrial and Banking indexes improved by +0.54 and 0.49% respectively.

Top gainers

  1. MRS up 9.82%  to close at N12.3
  2. JBERGER up 3.17% to close at N19.5
  3. WAPCO up 1.92% to close at N26.5
  4. DANGCEM up 0.85% to close at N236
  5. AIRTELAFRI up 0.38% to close at N855

 

 

Specta

Top losers

  1. CILEASING down 10.00% to close at N5.13
  2. ARDOVA down 9.78% to close at N18.45
  3. INTBREW down 6.53% to close at N6.16
  4. NASCON down 5.81% to close at N16.2
  5. UNILEVER down 2.22% to close at N13.2

Outlook

Nigerian Bourse recorded an impressive winning streak this week as some NSE30 stocks including, AIRTELAFRI, DANGCEM, WAPCO triggered the upward run on Monday’s trading session.

  • The Nigerian Stock market advance to close in positive territory as buying interest was seen on stocks across the board.
  • Nairametrics however, envisages cautious buying, amid improved market conditions in Nigeria’s financial market.

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Debt Securities

UPDC moves to redeem N4.355 billion bonds

UPDC is set to redeem its N4,355 billion Series 1 Bonds on the 26th of April, 2021.

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UACN Property Development Company Plc (UPDC) is set to redeem its N4,355 billion Series 1 Bonds on the 26th of April, 2021.

This information was contained in a notice tagged “Notice to the Bondholders of UACN Property Development Plc”, issued by the Company Secretary, Folake Kalaro.

According to the information contained in the notice, UPDC, under Condition 3.2 of the Terms and Conditions of the Bonds, will redeem the N4,355,000,000 Series 1 Bonds on the 26th of April, 2021 from the bondholders, together with the accrued Coupon (the annual interest rate paid on the bond) up to, but excluding the Redemption Date.

The company revealed that the Coupon on the Bonds will cease to accrue on and after the Redemption Date.

What you should know

  • On the Bond’s Redemption Date, it is important to note that the Registrar of the Bonds, Africa Prudential Plc, shall pay to each Bondholder’s designated account, the amount payable to him/her in respect of the Redemption.
  • The Redemption payment to the Bondholders shall be equal to 100% of the principal amount together with all accrued and unpaid Coupon. Following the Redemption, the listing of the Bonds on the FMDQ Securities Exchange Limited will be canceled.
  • It is essential to understand that the N4.355 billion Series 1 Senior Guaranteed Fixed Rate Bond Due 2023 under UPDC’s N20 billion Bond Issuance Programme, was listed in 2018 following the approval of the SEC.
  • The move to issue the N4.355 billion bonds was made following an unsuccessful attempt to raise N5.16 billion via a rights issue, which recorded subscription for 879.65 million ordinary shares valued at N2.64 billion.

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