Spotlight Stories
Seplat has a ‘HOLD’ recommendation for next week
@stanbicibtc has a hold recommendation for next week’s trading session on the @nsecontact
Stocks on our Buy/Sell/Hold list are picked from the gainers and losers of the previous week, as well as various analyst reports.
Seplat: Hold
Recent results: Results for the half year ended June 2019 show that revenue increased from N104 billion in 2018 to N108 billion in 2019. Profit before tax dipped slightly from N37 billion in 2018 to N36.9 billion in 2019. Profit after tax however rose from N14.8 billion in 2018 to N36.5 billion in 2019.
Price Information
Current Share Price: N397.70
Price to Earnings Ratio: 2.85X
Price to Book Ratio:0.36
Year to date: -37.86%
One Year Return: -30%
External View
Analysts at United Capital have a ‘Buy’ rating on the stock. They have a one year target price of N876.2 per share. This represents a potential upside of 120.3% from the stock’s price of N397.7 as at when the report was prepared.
Our View
Seplat is a HOLD in Nairametrics’ opinion. While the stock declined somewhat sharply last week (perhaps due to reports that AMCON had obtained a court order seizing its Chairman’s assets), the stock has not declined sufficiently to warrant entry.
The stock is also trading at 2.84 times earnings, far lower than 7.4 average PE ratio on the NSE.
Stanbic IBTC: HOLD
Recent results: Results for the half year ended June 2019 show that gross earnings increased from N114 billion in 2018 to N117 billion in 2019. Profit before tax however fell from N50.7 billion in 2018 to N44.6 billion in 2019. Profit after tax also declined from N43 billion in 2018 to N36.2 billion in 2019.
Price information
Current Share Price: N37
Price to Earnings Ratio: 5.83X
Price to Book Ratio: 1.45
Year to Date: -22.84%
One Year Return: -16.45%
External View
Analysts at United Capital have a ‘Buy’ recommendation on the stock. They have a 12–month target price of N53.7. This represents a potential upside of 41.3%, from the stock’s price of N38 as at when the report was prepared.
Analysts at Afrinvest have a ‘Buy’ recommendation on the stock. They have a 12–month target price of N48.11. This represents a potential upside of 26.6%, from the stock’s price of N38.
Our View
Stanbic IBTC is a HOLD in Nairametrics opinion. While H1 2019 results show a decline year on year, the stock has not dipped sufficiently to warrant entry. It is also highly unlikely to do so anytime soon, as it is thinly traded.
UPDC
Recent results: Results for the half year ended June 2019 show that revenue rose slightly from N1.2 billion in 2018 to N1.4 billion in 2019. Loss for the period however dipped slightly from N1.8 billion in 2018 to N1.2 billion in 2019.
Price Information
Current Share Price: N0.99
Price to Earnings Ratio: NA
Price to Book Ratio: 0.15
Year to Date Return: -48.17%
One Year Return: -36.94%
External View
None
Our View
UPDC is a HOLD in Nairametrics’ opinion. While the stock has had poor fundamentals, and ordinarily would not make our list, there have been several announcements made this week. Parent company, UAC of Nigeria, will divest its holding to shareholders. UPDC will in turn divest its stake in a REIT to shareholders.
Since the announcement was made, the stock has appreciated. An investor call scheduled for today should provide more details.
CCNN: HOLD
Recent results: Results for the half year ended June 2019, show that revenue increased from N12 billion in 2018 to N32 billion in 2019. Profit before tax increased from N3.6 billion in 2018 to N9.7 billion in 2019. Profit after tax also rose from N2.6 billion in 2018 to N7.2 billion in 2019.
Price Information
Current Share Price: N17.40
Price Earnings Ratio: 6.91X
Price to Book Ratio: 0.67
Year to Date Return: -10.31%
One Year Return: -42.08%
External View
None
Our View
CCNN is a HOLD in Nairametrics’ opinion, as the stock has not declined sufficiently to our entry price.
The stock is also trading within range of other stocks in the cement space. Dangote Cement is trading at a PE ratio of 6.63 times earnings.
Financial Services
Union Bank Nigeria Plc issues disclaimer against purported sale of owner’s stake
Union Bank has rejected claims that its majority shareholder, Atlas Mara is considering selling its 50% stake.
The Union Bank of Nigeria Plc has today issued a disclaimer against an unsubstantiated publication by one of Nigeria’s leading online news site, that its principal owner is considering selling its 50% stake in the firm.
The disclaimer was signed by the bank’s secretary, Somuyiwa Sonubi and sent to the Nigerian Stock Exchange, as seen by Nairametrics.
Recall that a few days ago, some online news website had reported that Union Bank’s principal owner, Atlas Mara is considering selling its stake in the firm, after receiving bids from local banks. The report has it that Atlas Mara engaged the services of a financial advisor, Rothschild & Co to consider the deal.
In a bid to shed more light on the issue and allay the fears of stakeholders, Union Bank dismissed the claims, describing it as a mere ‘rumour and speculation’. It went further to advise relevant stakeholders which comprises of the members of the public, its customers, NSE and other regulatory bodies to disregard the speculation in its entirety.
Corroborating the stand maintained by the bank, Atlas Mara also rejected the report. It clarified the issue of contracting external advisers, noting that it was in line with the Board’s decision to explore a wide range of strategic options.
An excerpt of the disclaimer issued by the firm reads: “While it is the Company’s practice to refrain from comment on market rumours or speculation, we believe it is important to note that Atlas Mara has not received any offers from any local Nigerian bank or other bank wishing to acquire the Company’s stake in Union Bank of Nigeria (“UBN”). As previously announced to the market in 2019, the Board of the Company has been exploring a wide range of strategic options with the assistance of external advisers. That process is still underway and the Company’s strategic objectives have not changed.’’
What you should know
- Atlas Mara is currently the biggest shareholder in Union Bank of Nigeria, with a stake of 49.97% (approximately 50%).
- Union Bank Nigeria Plc share price closed trading today, January 27, 2021 at N5.7, down by 3.39%. It also has a market capitalization of about N165.99 billion.
- Based on the current market capitalization, the stake of Atlas Mara translates to approximately N82.9 billion.
Market Views
Strong gain in U.S dollar leads to high sell-offs in bitcoin, Stocks, Gold
The U.S dollar index jumped up by 0.69% to 90.743 on Wednesday, after a 0.2% decline the previous session.
The U.S dollar value fired up at Wednesday’s trading session, leading many financial assets to lose value momentarily.
At the time of drafting this report, the U.S dollar index jumped up by 0.69% to 90.743 on Wednesday, after a 0.2% decline the previous session.
Such assets include Bitcoin which at press time, trading at $29,789.11 with a daily trading volume of $74,4 billion. Bitcoin is down 5.86% for the day.
- Gold was down 0.50%, and other major currencies like the Euro, British pound suffered heavy losses.
- Also, U.S. stock indexes drifted lower despite impressive earnings from Microsoft on the account investors went long on the safe-haven currency.
The Dow Jones Industrial Average dropped by 0.14%, at the open to 30893.78. The S&P 500 fell by 0.33%, at the open to 3836.83, while the Nasdaq Composite dropped 139.5 points, or 1.02%, to 13486.576 at the opening bell.
What you should know: The U.S Dollar is a universally accepted currency for trade throughout the world and holds the title as the world’s reserve currency with over 50% of countries holding their foreign exchange reserves and pegging their currency to the dollar.
It’s often regarded as a safe haven currency on the basis that global investors prefer to hold it during times of high geopolitical uncertainty
Business
CBN appoints 3 Pre-Shipment Inspection and 2 Monitoring Agents for non-oil exports
The CBN has announced the appointment of 3 PIAs and 2 Monitoring/Evaluation Agents for non-oil exports.
The Central Bank of Nigeria (CBN) has announced the appointment of 3 Pre-Shipment Inspection Agents (PIAs) for non-oil exports with effect from January 15, 2021.
The apex bank in addition, also announced the appointment of Monitoring and Evaluation Agents (MEAs) to oversee the activities of the PIAs in their respective zones of operations.
This disclosure is contained in a circular that was issued by the CBN on January 26, 2021, and signed by its Director for Trade and Exchange Department, Dr. O. S. Nnaji.
The CBN in the circular said that the Pre-Shipment Inspection Agents are;
- Angila International Limited with the responsibility to cover North West and North Central Zones,
- Neroli Technologies Limited to cover South West and South-South,
- Gojopal Nigeria Limited has the responsibility to cover the South East and North East.
Similarly, the newly appointed Monitoring and Evaluation Agents are;
- Foops Integrated Services Limited with the responsibility to cover North East, North West and North Central,
- Ace Global Depository whose areas of coverage include South East, South West, and South-South.
The apex bank in the circular directed all authorized dealers, operators in the non-oil export sector, and members of the general public to take note and ensure compliance.
What you should know
- It can be recalled that in a revised policy, the Federal Government had said that all non-oil exports from Nigeria shall be subject to inspection by Pre-Shipment Inspection Agents appointed for that purpose by the government.
- The focus of the PIAs shall be to ascertain the quality, quantity, and price competitiveness of exports from Nigeria and shall collaborate with other regulatory agencies like NAFDAC, SON, Plant and Animal Quarantine, Federal Produce Inspectorate, and so on, for quality inspection of regulated products.
