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Okomu Oil Palm is a SELL

Okomu Oil Palm is a SELL in Nairametrics opinion for the trading week ending August 2, 2019 on the @nsecontact

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Buy/Sell/Hold, Guaranty Trust Bank, Nigeria Stock Excahnge

Stocks to Buy/Sell/Hold are drawn from the top gainers and losers of the previous week, as well as various analysts’ reports. 

 Dangote Sugar: HOLD  

Recent ResultsResults for the first quarter ended March 2019, show that revenue fell from N41.1 billion in 2018 to N38.1 billion in 2019. Profit before tax however rose from N8.3 billion in 2018 to N10.7 billion in 2019. Profit after tax also increased from N5.2 billion in 2018 to N7 billion in 2019. 

Price Information  

Current Share Price: N10.6  

Price to Earnings Ratio5.32X 

Price to Book Ratio: 1.19  

Year to Date: -30.49%  

One Year Return: -25.34% 

External View  

Analysts at United Capital have a Hold’ recommendation. They have a 12 month target price of N16.80. This represents a potential upside of 49.3% from the stock’s price of N11.3 as at when the report was prepared.  

Analysts at FBNQuest have a Neutral rating on the stock. They have a one year target price of N14.90. This represents a potential upside of 33.1% from the stock’s price of N11.20, as at when the report was prepared.  

Our View  

Dangote Sugar Refinery is a HOLD in Nairametrics’ opinion. Though the stock is trading quite cheaply, the year to date decline is not sufficient to warrant entry.  

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 Nestle Nigeria: HOLD  

Recent ResultsResults for the first quarter ended March 2019, show that revenue increased from N67.4 billion in 2018 to N70 billion in 2019. Profit before tax jumped from N13.6 billion in 2018 to N19.1 billion in 2019. Profit after tax also increased from N8.6 billion in 2018 to N12.8 billion in 2019.  

Price Information  

Current Share Price: N1300  

Price to Earnings Ratio: 21.81X 

Price to Book Ratio: 16.3  

Year to Date: -12.46%  

One Year Return: -6.77%  

External View 

Analysts at FBNQuest have a neutral recommendation on Nestle. They have a target price of N1431. This represents a potential upside of 14.5% from the stock’s price of N1250, as at when the report was prepared.

Analysts at United Capital have a Buy recommendation on the stock. They have a 12month target price of N1636.10. This represents a potential upside of 30.9% from the stock’s price of N1250, when the report was prepared.  

Our View 

Nestle Nigeria is a HOLD in Nairametrics opinion. While the stock is trading at a PE ratio nearly 4 times the average PE ratio on the exchange, such premiums are not uncommon with blue chip stocks. The thin liquidity also means that a significant price decline may take a while.  

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 FCMB Group: HOLD  

Recent ResultsResults for the first quarter ended March 2019, show that revenue increased from N42.1 billion in 2018 to N43.9 billion in 2019. Profit before tax increased from N3.2 billion in 2018 to N4.2 billion in 2019. Profit after tax also increased from N2.5 billion in 2018 to N3.6 billion in 2019.  

Price information  

Current Share Price: N1.73  

Price to Earnings Ratio2.16X

Price to Book Ratio: 0.18 

Year to Date: -8.47%  

One Year Return: 3.59%  

External View 

Analysts at FBNQuest have a Neutral recommendation on the stock. They have a target price of N2.80, which represents a potential upside of 72.8% from the stock’s price of N1.6 as at when the report was prepared.  

Analysts at United Capital have a Buy recommendation on the stock. They have a target price of N2.50, which represents a potential upside of 56.3% from the stock’s price of N1.6 as at when the report was prepared.  

Our View  

FCMB is a HOLD in Nairametrics’ opinion, even though the stock is trading at a price earnings ratio lower than its peersSterling Bank which is trading at 6.9 times earnings and Fidelity Bank which is trading at 1.9 times earnings.  

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The stock has not declined sufficiently year to date, to an attractive entry point.  

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 Okomu Oil Palm: SELL 

Recent ResultsResults for the first quarter ended March 2019, show that turnover fell sharply from N7.3 billion in 2018 to N4.2 billion in 2019. Profit before tax fell from N3.9 billion in 2018 to N1.2 billion in 2019. Profit after tax also declined from N3.4 billion in 2018 to N1 billion in 2019.  

Price Information 

Current Share Price: N55.80 

Price to Earnings Ratio: 8.82X 

Price to Book Ratio: 1.8  

Year to Date: -26.77%  

One Year Return: -30.05%  

External View 

Analysts at FBNQuest have a Neutral recommendation on the stock. They have a target price of N64.7, which represents a potential upside of 16.1% from the stock’s price of N55.8, as at when the report was prepared.  

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Analysts at United Capital have a Buy recommendation on the stock. They have a 12 month target price of N92.1, which represents a potential upside of 65.1% from the stock’s price of N55.8 as at when the report was prepared.  

Our View  

Okomu is a SELL in Nairametrics’ opinion. While the decline in performance is also present in Presco Plc its peer, Okomu’s numbers may come in significantly lower. Investors with a long term view, may decide to HOLD, or renter after its H1 2019 results are released. 

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 [email protected]

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Hospitality & Travel

Biden reverses US immigration ban on Nigeria, others

US President, Joe Biden has signed an executive order to repeal the immigrant visa ban on Nigeria and others.

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What would a Joe Biden Presidency mean for Nigeria?

Newly-elected President, Joe Biden has signed his first executive orders as US President including reversing a Donald Trump-administration travel ban on 13 countries which were mainly Muslim and African nations.

Biden’s executive orders, amongst other acts, also returns the US back to the Paris Climate agreement and stopping the construction of the border wall with Mexico.

This was disclosed in a report by Reuters after Biden signed 15 executive actions immediately after his inauguration.

“In the coming days and weeks, we will be announcing additional executive actions that confront these challenges and deliver on the president-elect’s promises to the American people,” Jen Psaki, Biden’s press secretary said.

Other actions by Biden include reversing the Presidential permit for the controversial Keystone XL oil pipeline.

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What you should know

  • Donald’s Trump administration introduced a ban on citizens from countries which was upheld at the US Supreme Court, barring citizens of seven countries — Iran, Libya, Somalia, Syria, Yemen, Venezuela, and North Korea — from obtaining any kind of visas, and largely preventing them from entering the US.
  • Nairametrics reported that the US subsequently added six more countries to its travel ban list. They were Nigeria, Eritrea, Sudan, Tanzania, Kyrgyzstan and Myanmar. The extra ban meant citizens were allowed to visit but were banned from settling permanently in the United States.
  • US government gave conditions to get it to review Nigeria’s status on the ban list, including getting Nigeria to improve on its data intelligence such that it would be easy to investigate any immigrant wishing to visit the United States and meet information-sharing systems.
  • In August 2020, President Muhammadu Buhari disclosed that it will take enormous resources to reverse the ban on immigrant visas for Nigerians by the United States Government. He also noted that the country was making some progress in that regard.

Biden’s reversal of Trump’s policies is part of an aggressive push to roll back some of his predecessor’s strict and controversial immigration policies which have been condemned by world leaders and civil groups in the past.

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Spotlight Stories

African tech startups raise over $700 million in 2020 despite pandemic

African tech startups raised more funding from more investors than ever before in 2020 despite the Covid-19 pandemic.

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Despite the Covid-19 outbreak, African tech startups raised a record high of $701.5 million from investors in 2020. This is according to the African Tech Startups Funding 2020 report released by Disrupt Africa.

According to the report, 2020 was a record year for investment into the African tech startup ecosystem, with more startups raising more money, from more investors than ever before.

Specifically, 397 startups raised $701.5 million in total funding in 2020, indicating a 27.7% and 42.7% increase compared to 311 startups that raised $491.6 million in the previous year.

Highlights of the report

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  • The number of startups that received investments in 2020 grew by 217.6% compared to 125 tech startups in 2015, when the first edition of the report was published.
  • Kenya, Nigeria, South Africa, and Egypt remain emphatically Africa’s “big four” from a funding perspective, accounting for 77% of funded startups and 89.2% of total investment.
  • Nigeria (85), Egypt (82) and South Africa (81) lead the way from the perspective of the number of ventures.
  • However, when it comes to total combined raised capital, it is Kenya that is Africa’s leader, with startups from the East African country raising over US$190 million in funding in 2020.
  • The financial technology sector was the most attractive to investors in 2020, with more startups securing funding than any other sector and a combined total that dwarfed all others

Though these markets remain clear leaders, there are signs of growing activity elsewhere on the continent, with startups backed in 24 African countries, up from 19 in 2019, 20 in 2018, and 18 in 2017 respectively.

Meanwhile, a recent report by Nairametrics revealed that African startups raised over $1 billion in funding in 2020, with Nigerian startups raising 17% of the total amount. The report showed a list of notable startups that raised funds in the year, some of which include; Flutterwave, 54gene, Aella Credit, Helium Health, Kuda Bank amongst others.

Why this matters

  • Nigeria recorded significant growth in the number of startups securing funding in 2020, as the country saw a 77% increase compared to 2019. This is a welcomed development, as it indicates that the Nigerian tech space is on an upward trajectory.
  • More businesses will look to explore the tech industry considering the growing attention received by investors in recent times.

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Coronavirus

AMSP, AVATT to facilitate COVID-19 vaccines pre-orders for AU member states

The African Union has secured a provisional 270 million COVID-19 vaccine doses for African union members.

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South Africa High commission in Nigeria shuts its offices, South Africa announces 21-day lockdown following spike in Coronavirus cases

African Vaccine Acquisition Task Team (AVATT), the Africa Medical Supplies Platform (AMSP) have commenced the COVID-19 vaccines pre-order programme for all African Union Member States.

It would be recalled that the chairperson of the African Union, President Cyril Ramaphosa, had secured a provisional 270 million COVID-19 vaccine doses for Africa through AVATT, AMSP, on behalf of the Africa Centres for Disease Control and Prevention (Africa CDC).

It is expected that Afreximbank will facilitate payments by providing advance procurement commitment guarantees of up to US$2 billion to the manufacturers on behalf of the member states.

What they are saying

According to African Union Special Envoy, Strive Masiyiwa:

  • “These are historical times. For the first time in history, Africa has secured access to millions of vaccine doses in the middle of a pandemic as most of Western countries.
  • “There is still a huge shortage of vaccine doses and that is why this continental collaboration has designed a fair allocation coupled with timely and equitable access of COVID-19 vaccines across the continent.”

According to Prof. Benedict Oramah, President and Chairman of the Board of Directors of the African Export-Import Bank (Afreximbank):

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  • “Afreximbank is proud to expand its support to African economies in their bid to contain the pandemic.
  • “ Our vaccine financing facility builds on the success of our Pandemic Trade Impact Mitigation Facility (PATIMFA) to open access to COVID 19 vaccines to African states based on a whole-of-Africa approach favoured by the African Union.
  • “By providing advance procurement commitment guarantees of up to US$2 billion to candidate vaccine manufacturers, Afreximbank will ensure that African States are able to rapidly access COVID-19 vaccines, at competitive prices and in a timely manner thereby contributing to saving lives and livelihoods.”

According to Dr John Nkengasong, Director of Africa Centres for Disease Control and Prevention (Africa CDC):

  • “The biggest challenges to COVID-19 vaccine access in Africa have been financing of the vaccines and the logistics of vaccinating at scale, but we are glad that this gap is being filled by the Afreximbank financing facility.
  • “The critical decision now is how to get started so that once we start there will be no disruptions and this is where AMSP will play a very big role”

According to Fatoumata Bâ, Founder & Executive Chair of Janngo and Managing Partner of Janngo Capital:

  • “From today onwards African Union Member States will be able to start placing online pre-orders for their vaccines allocation through the Africa Medical Supplies Platform.
  • “We are proud to participate in giving direct access to cutting edge COVID-19 vaccines through Africa; This is essential to protect our people and reopen our economies”

What you should know

  • AVATT has secured a provisional 270 million COVID-19 vaccines doses from Pfizer, Johnson & Johnson and AstraZeneca,
  • AMSP – the single-source platform enabling faster, more transparent and cost-effective access to COVID-19 supplies – has opened today pre-orders, offering equitable access of COVID-19 vaccines doses for 55 African Union member states.
  • The Africa Medical Supplies Platform (AMSP) is supporting the vaccination operations by launching a new category on vaccine accessories that will help the member states to procure products such as ultra-low temperature freezers, personal protection equipment, cotton wool rolls, syringes and needles.
  • The Africa Medical Supplies Platform (AMSP) is a non-profit initiative launched by the African Union as an immediate, integrated and practical response to the Covid-19 pandemic.
  • African Vaccine Acquisition Task Team (AVATT) was established by the African Union chairperson, President Cyril Ramaphosa as a component in support of the Africa Vaccine Strategy and was endorsed by the AU Bureau of Heads of State and Government on 20th of August, 2020.

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