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Buy/Sell/Hold: Fix your eyes on these stocks for next week

Stocks on our Buy/Sell/Hold list are picked from the gainers and losers of the previous week.

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Buy Sell Hold Stocks, This is why you need international stocks in your portfolio

Stocks on our Buy/Sell/Hold list are picked from the gainers and losers of the previous week, as well as various analyst reports.

PZ Cussons Nigeria: SELL

Recent results

Results for the first quarter ended August 2018 show that revenue fell from N18.5 billion in 2017 to N15.8 billion in 2018. The company’s losses worsened year on year from N181 million in 2017 to N204 million in 2018.

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Price Information

Current Share Price: N11.40
Price to Earnings ratio: 11.89X
Price to Book ratio: 1.08
Year to date return: -44.46%
One Year return: -48.19%

External View

Analysts at United Capital have a Buy rating on the stock. They have a one year target price of N20.6. This represents a potential upside of 93.4% from the stock’s price of N10.7 as at when the report was prepared.

Analysts at FBNQuest have an underperform rating on the stock. They have a target price of N18.7. This represents a potential upside of 75.7% from the stock’s price of N9 as at when the result was prepared.

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Our View

Nairametrics maintains its SELL recommendation on PZ Cussons, despite the stock rebounding from a low. The company has yet to state clear strategies to counter its poor string of results.

Presco: HOLD

Recent results

Results for the third quarter ended September 30, 2018, show that revenue fell from N16.9 billion in 2017 to N16.2 billion in 2018. Profit before tax dropped from N7.9 billion in 2017 to N7.4 billion in 2018. Profit after tax also dipped from N5.3 billion in 2017 to N5.2 billion in 2018.

Price Information

Current Share Price: N62.15
Price to Earnings ratio: 2.45X
Price to Book ratio: 0.78
Year to date return: -9.27%
One Year return: -5.83%

External View

Analysts at FBNQuest have a Neutral rating on the stock. They have a target price of N76.9, which represents a potential upside of 23.7% from the stock’s price of N62.2 as at when the report was prepared.

Analysts at United Capital have a 12 month target price of N76.9. This represents a potential upside of 23.7% from the stock’s price of N62.2 as at when the report was prepared.

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Our View

Presco Plc is a HOLD in Nairametrics opinion, as there remains sufficient room for decline in the current bear market. The stock is down 9.27% year to date, much more lower than the All Share Index which is down 19%.

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11 Plc: HOLD

Recent results

Results for the third quarter ended September 30, 2018 show revenue jumped from N88 billion in 2017 to N125 billion in 2018. Profit before tax jumped from N6.8 billion in 2017 to N11.6 billion in 2018. Profit after tax also increased from N4.5 billion in 2017 to N7.8 billion in 2018.

Price Information

Current Share Price: N160
Price to Earnings ratio: 5.34X
Price to Book ratio: 1.78
One Year return: 5.09
Year to date return: -17.78%

External Views

Analysts at FBNQuest have a Neutral rating on the stock. They have a target price of N292.4, which represents a potential upside of 77.2% from the stock’s price of N165 as at when the report was prepared.

Analysts at United Capital have a Buy rating on the stock. They have a one year target price of N184.5. This represents a potential upside of 11.8% from the stock’s price of N165 as at when the report was prepared.

Our View

11 Plc is a Hold in Nairametrics opinion, as the stock is currently trading at par with its peers such as Total Nigeria, which is trading at 6.8 times earnings.

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Investors keen on taking a position, may have to wait for a further decline in price before doing so.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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FEATURED

Pension Fund Managers dump Nigerian Treasury Bills

Pension fund managers redeemed treasury bills worth N512 million Naira in the two months combined but did not invest any additional kobo into treasury bills within the same period.

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Pension funds, Treasury Bill Investment: Ghana Vs Nigeria, Further rate decline expected as N405 billion worth of treasury bills mature , CBN’s N225.45 billion T-bills auction records oversubscription, as rate fall below 5% , Nigeria’s 364-day treasury bills falls to 3.84% per annum

Analysis of the recently released summary of Pension Fund Asset data for the first two months of 2020 by the Pension Commission of Nigeria has shown that pension fund managers are no longer in love with Treasury Bills like they used to be in the past.

Time was when fund managers allocated much of their assets to treasury bills, but that seems to be waning as yields on treasury bills head towards subzero.

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According to the analysis, pension fund managers redeemed treasury bills worth N512 million in the two months combined but did not invest any additional kobo into treasury bills within the same period.

READ ALSO: Nigeria’s pension contributors add N186.43 billion to pension asset

Prior to this event, the pension fund had invested a combined sum of N1.88 trillion into treasury bills, representing 18.4% of total pension fund assets.

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With that development, pension fund managers allocation to treasury bills now stands at 13%. This is about the first time, in over 5 years that PFM’s are shying away from treasury bills.

The love seems to have shifted to bank placements which attracted additional investment if N420 million from pension fund managers. FGN Bonds continue their camaraderie with pension fund managers as they pumped additional N352 million into FGN bonds in January and February, combined. This seeming reallocation to bank placements is indicative of pension fund managers’ desire to hold on to their cash, while waiting and hoping that yields will trend up anytime soon.

READ MORE: Pension fund multi fund structure performance

Yield Analysis: Fund managers who are out to seek ways to generate positive alpha or returns for their investors are running away because of the low treasury bill yields. The last Treasury Bill option that was conducted on May 13th, 2020, had stop rates of 2.5%, 2.85% and 3.84% for 91-day, 182-day and 364-day treasury bills respectively. Those rates were not enticing enough for the fund managers.

Strong Market Demand: This does not mean that Nigerian Treasury Bills are no longer in demand because, according to the NTB Auction Results sheet of May 13th, 2020, all the three tenors of treasury bills were oversubscribed.

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While the 91-day Treasury Bill had N4,384,80,000 on offer, it attracted a total subscription of N22,334,588,000, the 182-day tenor which had N12,920,900,000 on offer saw N41,194,993,000 being subscribed for, while investors bid N102,030,671,000 for the 364-day tenor which had N16,536,720,000 on offer.

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READ ALSO: Pension contributions from Nigerians under 30 dwindling at an alarming rate

Pension Fund Asset Allocation: All said and done, FGN bonds continue to be the asset type with the highest allocation from pension managers. Out of the N10.5 trillion total pension fund asset value as at February, 29th 2020, N5.6 trillion sits with FGN Bonds, while bank placements come second with an allocation of N1.48 trillion leaving Treasury Bills in the third position with an asset allocation of N1.37 trillion.

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Infrastructural financing in Nigeria: Why bonds are better than loans

Structuring project financing through the capital markets to ensure that the transactions are bankable, and the costs reflect reality.

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Infrastructural financing in Nigeria: Why bonds are better than loans

If Nigeria is to make up for the infrastructural deficit in the country, the government should consider resorting to bonds rather than loans for infrastructural financing.

Structuring all transactions in a local currency, rather than dollars, would help to drive infrastructural development at a greater speed.

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These were some of the suggestions made by Mr. Bolaji Balogun, Chief Executive Officer, Chapel Hill Denham, while speaking on the theme: “Financing Infrastructure Development in Nigeria – Challenges, Opportunities and the Way Forward,” at the virtual Financial System Strategy (FSS) 2020 Pension Sector Second Quarter Forum.

Balogun noted that driving infrastructural development would start by creating an enabling environment and embracing private capital.

“Only if investment in infrastructure grows from 15% to 18% a year, we can reach 8% economic growth,” he said.

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He advised that structuring the financing through the capital markets to ensure that the transactions are bankable, and the costs reflect reality.

(READ MORE: U.S.A calls for an independent probe of AfDB president, Akinwumi Adesina)

Balogun noted that the country would experience a boost in financial inclusion, improvement in the balance of trade, long-term macro, and price stability with a well-developed infrastructure.

Other gains of well-developed infrastructure, according to him, are greater production competitiveness, enhanced housing, significant import substitution, and robust pensions.

Mr. Effiok Ekpenyong, Head, Investment Management Department, Securities and Exchange Commission (SEC), in his presentation, stated that the capital market apex regulator has existing regulations and guidelines that would help participants in infrastructure development.

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He also called for collaboration among the agencies to remove regulatory bottlenecks and build capacity for the country to achieve expected growth and development.

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(READ MORE: Meet Dr. Lamido Yuguda, the new SEC DG)

Crowdfunding for infrastructure

In his presentation, Mr. Chinua Azubuike, Chief Executive Officer, InfraCredit, called for crowdfunding domestic credit and public-private partnerships for infrastructural development.

This was in line with an earlier presentation from Mr. Chidi Izuwah, Director-General, Infrastructure Concession Regulatory Commission (ICRC), who stated that the government alone cannot provide the needed infrastructure for economic growth and development.

READ ALSO: Senate moves to upgrade ibadan Airport

Also speaking at the online forum, Mr. Farouk Aminu, Head, Investment Services Department, National Pension Commission, stressed the need for creating infrastructure instruments that would attract Pension Fund Administrators (PFAs) to the market.

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He opined that the diversification of investment products would boost PFAs participation in infrastructure development, thus hastening Nigeria’s infrastructural development.

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Coronavirus

Covid-19 Update in Nigeria

On the 28th of May 2020, 182 new confirmed cases and 5 deaths were recorded in Nigeria bringing the total confirmed cases recorded in the country to 8,915.

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COVID-19: FCMB reschedule operations

The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to rise as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 8,915 confirmed cases.

On the 28th of May 2020, 182 new confirmed cases and 5 deaths were recorded in Nigeria.

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To date, 8915 cases have been confirmed, 2592 cases have been discharged and 259 deaths have been recorded in 35 states and the Federal Capital Territory having carried out 49,966 tests.

Covid-19 Case Updates- May 28th 2020

  • Total Number of Cases – 8,915
  • Total Number Discharged – 2,592
  • Total Deaths – 259
  • Total Tests Carried out – 49,966

The 182 new cases are reported from 16 states- Lagos (111), FCT (16), Akwa Ibom (10), Oyo (8), Kaduna (6), Delta (6), Rivers (5), Ebonyi (4), Ogun (4), Kano (3), Plateau (2), Gombe (2), Kebbi (1), Kwara (2), Bauchi (1), Borno (1).

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

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The latest numbers bring Lagos state total confirmed cases to 4123, followed by Kano (939), Abuja at 535, Katsina (358), Oyo (260), Borno (258), Ogun (246), Jigawa (241), Edo (240), Bauchi (234), Kaduna (221),  Rivers (176), Gombe (154), Sokoto (116), Plateau (99).

Kwara State has recorded 87 cases, Zamfara (76), Nasarawa (62), Delta (57), Yobe (47), Akwa Ibom (45), Osun (44), Ebonyi (40), Adamawa (38), Imo (34), Kebbi (33), Niger (30), Ondo (24), Ekiti (20), Taraba and Enugu (18), Bayelsa (12), Anambra (11), Abia (10), Benue (7), while Kogi state has recorded 2 cases.

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, President Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

 

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READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

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DateConfirmed caseNew casesTotal deathsNew deathsTotal recoveryActive casesCritical cases
May 28, 202089151822595259260647
May 27, 202087333892545250159787
May 26, 2020834427624916238557107
May 25, 202080682292337231155247
May 24, 202078393132265226353607
May 23, 202075262652210217451317
May 22, 2020726124522110200750337
May 21, 2020701633921111190748987
May 20, 202066772842008184046377
May 19, 202064012261921173444757
May 18, 202061752161919164443407
May 17, 202059593881826159441837
May 16, 202056211761765147239737
May 15, 202054452881713132039544
May 14, 202051621931683118038154
May 13, 202049711841646107037374
May 12, 20204787146158695936704
May 11, 202046412421521090235894
May 10, 202043992481421777834794
May 9, 202041512391271174532784
May 8, 202039123861181067931154
May 7, 20203526381108460128184
May 6, 20203145195104553425071
May 5, 2020295014899548123704
May 4, 2020280224594641722912
May 3, 2020255817088240020702
May 2, 20202388220861735119522
May 1, 20202170238691035117512
April 30, 2020193220459731715562
April 29, 2020172819652730713692
April 28, 2020153219545425512322
April 27, 20201337644102559942
April 26, 20201273914152399942
April 25, 20201182873632229252
April 24, 202010951143312088552
April 23, 20209811083231977532
April 22, 2020873912931976482
April 21, 20207821172631975602
April 20, 2020665382311884662
April 19, 2020627862221704362
April 18, 2020541482021663562
April 17, 2020493511841593172
April 16, 2020442351311522772
April 15, 2020407341211282672
April 14, 202037330111992632
April 13, 202034320100912422
April 12, 20203235100852282
April 11, 202031813103702382
April 10, 20203051770582402
April 9, 20202881471512302
April 8, 20202742260442262
April 7, 20202541661442042
April 6, 2020238650351982
April 5, 20202321851331942
April 4, 2020214540251850
April 3, 20202092542251800
April 2, 20201841020201620
April 1, 2020174352091630
March 31, 202013982091280
March 30, 2020131202181210
March 29, 2020111221031070
March 28, 20208919103850
March 27, 2020705103660
March 26, 20206514102620
March 25, 2020517102480
March 24, 2020444102410
March 23, 20204010112370
March 22, 2020308002280
March 21, 20202210001210
March 20, 2020124001110
March 19, 20208000170
March 18, 20208500170
March 17, 20203100030
March 16, 20202000020
March 15, 20202000020
March 14, 20202000020
March 13, 20202000020
March 12, 20202000020
March 11, 20202000020
March 10, 20202000020
March 9, 20202100020
March 8, 20201000010
March 7, 20201000010
March 6, 20201000010
March 5, 20201000010
March 4, 20201000010
March 3, 20201000010
March 2, 20201000010
March 1, 20201000010
February 29, 20201000010
February 28, 20201100010

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