₦airaland Forum

NSE MARKET UPDATE FOR 29 AUGUST 2018

MARKET INDEX SHEDS 44 BASIS POINTS AS INVESTORS LOSE N57BN
Trading activities on the Nigerian bourse closed today 29 August 2018 southwards. Benchmark index, NSE ASI and market capitalization trimmed by 0.44% to close at 35,358.94 basis points and N12.910 trillion respectively. Overall year-to-date return now stands @ -7.54%.

NEM led the volume log with 180.06m units followed by UBA / TRANSCORP with 27.20m / 21.75m. NEM also led the value chart with N540.11m followed by ETI / GUARANTY with N383.05m / N350.23m.

CBN official exchange rate closed at N306.15/$, I & E Fx rate closed at N363.06/$; parallel market rate closed at N361/$. As at time of this report (5.25pm), Brent Crude was being traded at $76.65p/b in the international commodities market.

ACTIVITY LEVEL
At end of the trading session, a total of 345.06m units of stocks worth N2.27b was exchanged in 3,261 deals. Financial Services sector accounted for 87% of total volume traded (81% by value), Conglomerates accounted for 6.38% of volume (1.35% of value), while Oil and Gas accounted for 3% of volume (4.11% of value).

MARKET BREADTH CLOSES NEGATIVE
Advancers/Decliners ratio pegged at 0.67x for the day with 18 gainers and 27 losers.

PORTPAINT led the gainers with an increase of 9.96% to close at N2.98, followed by REGALINS / SKYEBANK which gained 9.52% / 7.69% to close at N0.23/ N0.56 respectively. Decliners log were by LIVESTOCK which lost 10% to close at N0.54; STDINSURE / LASACO also shed 9.52% / 9.09% to close the day at N0.38 / N0.30 respectively.

SOURCE: Arthur Stevens Asset Management

4601CE:
Somebody please tell me what happens when you buy a stock and it is delisted on NSE.
I’m just curious o

"Delisting" means removal of a listed stock from the Nigerian Stock Exchange (NSE) or any exchange on which it is traded.

Various reasons can cause delisting:

1. BANKRUPTCY
When a company goes bankrupt, the shares will usually be delisted and cease to exist entirely. Also, when a company is going bankrupt, it will usually have violated one or more of the exchange's requirements, and might even be delisted before bankruptcy officially occurs. Implication for shareholders: The shareholder's investment is lost.

2. DISSOLUTION
A company might choose to dissolve entirely. In such an instance, the company will sell all assets, pay off creditors and distribute remaining proceeds to shareholders. After dissolution is completed, the shares will be delisted from the exchange. Implication for shareholders: Depends on what is "left over" for shareholders after settling creditors.

3. VOLUNTARY DELISTING TO GO PRIVATE
A company may decide to go private i.e. to stop being a publicly traded company. In that case it will apply for voluntary delisting from the NSE e.g. Nigerian Bottling Company, Great Nigeria Insurance. Implication for shareholders: The investment is intact but the shares cannot be traded on the NSE. However, trading can be done on the National Association of Securities Dealers (NASD)'s Over-the-Counter (OTC) market. In many cases shareholders will be paid cash for their shares when delisted from the NSE.

4. VOLUNTARY DELISTING DUE TO BUYOUT
A company can be delisted due to a buyout by another company. Implication for shareholders: You might receive cash for your shares or get shares of the acquiring company. If the company is taken private, shareholders will generally receive a cash payment for their shares when delisted. In many cases, the buyout is done at a premium so the shareholders get a much higher payment than the NSE trading price valuation.

5. VOLUNTARY DELISTING BY MERGER
A merger can also lead to voluntary delisting e.g. Oceanic Bank which merged with Ecobank, Intercontinental Bank which merged with Access Bank Plc. Implications for shareholders: They will either receive cash or be given shares in the merged entity.

6. FORCED DELISTING (FOR FAILURE TO MEET NSE REQUIREMENTS)
Companies listed on an exchange such as the NSE need to meet certain minimal requirements e.g. compliance with International Financial Reporting Standards, submission of quarterly, semi-annual and annual statements, annual certification on adherence to corporate governance, annual listing fees, e.t.c.

Continued failure to meet any of the requirements can eventually cause the company to be "forcibly" delisted from the exchange e.g. Onwuka Hi-Tek, Oluwa Glass, Nigerian Wire Industries. Implication for shareholders: In majority of cases, the investment is lost.

In the last 16 years, no less than 93 companies have been voluntarily or forcibly delisted from the Nigerian Stock Exchange.

The following were delisted from the Daily Official List of the NSE between 2002 and April 2018​.
​
S/N COMPANY DATE DELISTED REASON FOR DELISTING
1 IMPRESIT BAKOLORI PLC 2002 Voluntary
2 DUMEZ NIGERIA PLC 2002 Regulatory: NSE
3 CFOA NIGERIA PLC 2007 Voluntary
4 ACEN INSURANCE PLC 2008 Regulatory: NAICOM
5 ATLAS NIGERIA PLC 2008 Regulatory: NSE
6 CERAMICS MFG. COY. PLC 2008 Regulatory: NSE
7 AMICABLE INSURANCE PLC 2008 Regulatory: NAICOM
8 BAICO INSURANCE PLC 2008 Regulatory: NAICOM
9 BEVERAGES (WA) NIG. PLC 2008 Regulatory: NSE
10 ENPEE PLC 2008 Regulatory: NSE
11 TATE INDUSTRIES PLC 2008 Regulatory: NSE
12 MAUREEN LAB. PLC 2008 Regulatory: NSE
13 RIETZCOT NIGERIA PLC 2008 Regulatory: NSE
14 INTRA MOTORS NIG. PLC 2008 Regulatory: NSE
15 AVIATION DEV. COY. PLC 2008 Regulatory: NAICOM
16 GROMMAC INDUSTRIES PLC 2008 Regulatory: NSE
17 ONWUKA HI-TEK. PLC 2008 Regulatory: NSE
18 NIGERIAN LAMPS PLC 2008 Regulatory: NSE
19 NIGERIAN YEAST & ALCAHOL MFG. PLC 2008 Regulatory: NSE
20 SECURITY ASS. PLC 2008 Regulatory: NAICOM
21 SUN INSURANCE PLC 2008 Regulatory: NAICOM
22 NIGERIAN TEXT. MILLS PLC 2008 Voluntary
23 FOOTWEAR MFG. PLC 2009 Regulatory: NSE
24 FERDINAND OIL MILLS PLC 2009 Regulatory: NSE
25 CHRISTLIEB PLC 2009 Regulatory: NSE
26 BCN PLC 2009 Regulatory: NSE
27 LIZ-OLOFIN & COY. PLC 2009 Regulatory: NSE
28 OLUWA GLASS COY. PLC 2009 Regulatory: NSE
29 ASABA TEXTILE MILLS PLC 2009 Regulatory: NSE
30 ABOSELDEHYDE LAB. PLC 2009 Regulatory: NSE
31 EPIC DYNAMIC PLC 2009 Regulatory: NSE
32 FADMAD PLC 2009 Regulatory: NSE
33 ABA TEXTILE MILLS PLC 2009 Regulatory: NSE
34 AFPRINT PLC 2010 Regulatory: NSE
35 INCAR PLC 2010 Voluntary
36 NIGERCEM PLC 2011 Regulatory: NSE
37 DAILY TIMES PLC 2011 Regulatory: NSE
38 ALBARKA AIRLINE PLC 2011 Regulatory: NSE
39 FOREMOST DAIRIES PLC 2011 Regulatory: NSE
40 WIGGINS TEAPE NIG. LC 2011 Regulatory: NSE
41 OKITIPUPA OIL PALM PLC 2011 Regulatory: NSE
42 FIRST CAP. INV. & TRUST PLC 2011 Regulatory: NSE
43 FLEXIBLE PACKAGING PLC 2011 Regulatory: NSE
44 NEWPAK PLC 2011 Regulatory: NSE
45 KRABO NIGERIA PLC 2011 Regulatory: NSE
46 TROPICAL PETRO. PLC 2011 Regulatory: NSE
47 NIGERIAN BOTTLING COY PLC 2011 Voluntary
48 NAMPAK PLC 2011 Voluntary
49 UNITED NIG. TEX. PLC 2011 Voluntary
50 BANK PHB PLC 2011 Nationalised: CBN
51 AFRIBANK PLC 2011 Nationalised: CBN
52 SPRING BANK PLC 2011 Nationalised: CBN
53 INTERCONTINENTAL BANK PLC 2011 Merged with Access Bank Plc.
54 OCEANIC BANK PLC 2011 Merged with ETI
55 FINBANK PLC 2011 Merged with FCMB Plc.
56 ECOBANK PLC 2011 Absorbed by ETI: Now Ecobank Nigeria Ltd
57 ABPLAST PLC 2012 Regulatory: NSE
58 UDEOFOSIN GARMENT PLC 2012 Regulatory: NSE
59 HALLMARK PAPER PRODUCT PLC 2012 Regulatory: NSE
60 BACGO BAG PLC April 11, 2013 Merged with Flour Mills Plc
61 CRUSADER NIGERIA PLC May 13, 2013 Merged with Custodian & Allied Insurance Plc.
62 WEST AFRICAN ALUMINIUM PLC June 3, 2013 Regulatory: NSE
​63 NIGERIAN WIRE INDUSTRY PLC Jun2 3, 2013 Regulatory: NSE​
​64 ​BIG TREAT PLC ​November 24, 2014 ​Voluntary
​65 ​AFROIL PLC ​November 24, 2014 ​Voluntary
​66 ​STARCOMMS PLC ​November 24, 2014 ​Voluntary
​67 ​PINNACLE POINT GROUP ​​November 24, 2014​ ​Voluntary
​68 ​POLY PRODUCTS​ PLC ​​December 12, 2014 ​Voluntary​
​69 ​OASIS INSURANCE ​December 31, 2014 ​Acquired by FBN Life Insurance​
​70 ​CAPPA AND D'ALBERTO​ ​January 16, 2015 ​Voluntary
​71 ​IPWA PLC ​May 18, 2016 ​Regulatory: NSE
​72 ​G. CAPPA PLC ​May 18, 2016 ​​Regulatory: NSE
​73 ​WEST AFRICAN GLASS INDUSTRIES PLC (WAGI) ​May 18, 2016 ​Regulatory: NSE
​74 ​INVESTMENT & ALLIED INSURANCE PLC​ ​May 18, 2016 ​Regulatory: NSE
​75 ​ALUMACO PLC ​May 18, 2016 ​Regulatory: NSE
​76 ​JOS INTERNATIONAL BREWERIES PLC ​May 18, 2016 ​Regulatory: NSE
​77 ​ADSWITCH PLC ​May 18, 2016 ​Regulatory: NSE
​78 ​ROKANNA PLC ​​May 18, 2016 ​Regulatory: NSE
​79 ​VONO PRODUCTS NIGERIA PLC ​May 23, 2016​ Merged with Vitafoam Plc
​80 ​Lennards (Nigeria) Plc ​December 1, 2016 ​Regulatory: NSE
​81 ​P.S Mandrides & Company Plc ​December 1, 2016 ​Regulatory: NSE
​82 ​Premier Breweries Plc ​December 1, 2016 ​Regulatory: NSE
​83 ​Costain (W.A) Plc ​​December 1, 2016 ​​Regulatory: NSE
​84 ​Navitus Energy Plc ​​December 1, 2016 ​​Regulatory: NSE
​85​ ​Nigerian Ropes Plc ​​December 1, 2016 ​​Regulatory: NSE
​86 ​Beco Petroleum Products Plc ​May 2, 2017 ​​​Regulatory: NSE​
​87 ​MTECH Communications Plc ​​May 2, 2017 ​Regulatory: NSE
​88 ​MTI Plc ​May 2, 2017 ​​​​Regulatory: NSE​​
​​89 ​UTC Plc​ ​May 2, 2017 ​Regulatory: NSE
​90 ​Ashakacem Plc ​July 4, 2017 ​Voluntary​​
​91 ​Seven-Up Bottling Company Plc March 5, 2018 ​Voluntary (Shareholders Approval)
​92 ​African Paints (Nigeria) Plc April 6, 2018 ​Regulatory
​93 ​Afrik Pharmaceuticals Plc ​April 6, 2018 ​Regulatory
​​​​​​​​​

POST FOR TECHNICAL TRADERS

TECHNICAL ANALYSIS OF THE NIGERIAN STOCK EXCHANGE 15 AUG 2018

FOCUS: GLOBAL X MSCI NIGERIA ETF AMEX:​NGE

OSCILLATORS VALUE ACTION
Relative Strength Index (14) 33.68 Neutral
Stochastic %K (14, 3, 3) 5.85 Neutral
Commodity Channel Index (20) -158.18 Buy
Average Directional Index (14) 14.46 Neutral
Awesome Oscillator -0.74 Sell
Momentum (10) -0.77 Sell
MACD Level (12, 27) -0.34 Sell
Stochastic RSI Fast (3, 3, 14, 14) 8.21 Neutral
Williams Percent Range (14) -84.09 Buy
Bull Bear Power -1.02 Neutral
Ultimate Oscillator (7, 14, 28) 42.52 Neutral

MOVING AVERAGES VALUE ACTION
Exponential Moving Average (10) 19.80 Sell
Simple Moving Average (10) 19.90 Sell
Exponential Moving Average (20) 20.06 Sell
Simple Moving Average (20) 20.04 Sell
Exponential Moving Average (30) 20.29 Sell
Simple Moving Average (30) 20.32 Sell
Exponential Moving Average (50) 20.71 Sell
Simple Moving Average (50) 20.77 Sell
Exponential Moving Average (100) 21.41 Sell
Simple Moving Average (100) 21.82 Sell
Exponential Moving Average (200) 21.64 Sell
Simple Moving Average (200) 22.45 Sell
Ichimoku Cloud Base Line (9, 26, 52, 26) 20.17 Neutral
Volume Weighted Moving Average (20) 20.2 Sell
Hull Moving Average (9) 19.28 Buy

SOURCE: www.tradingview.com

TECHNICAL INDICATOR SUMMARY
Sell:Neutral:Buy RATIO = 16:7:3.
Therefore, outlook is currently still mid-range BEARISH for the analyzed basket of NSE equities.

ARTICLE: 3 WAYS TO BUILD GREAT WEALTH

Source: www.businessinsider.co.za

Business Insider | Executive Insights
Aug 14, 2018; 06:12 pm

After spending 5 years studying millionaires, I've found that there are 3 types of people who end up the wealthiest. Thomas C. Corley studied and interviewed 233 wealthy individuals over the course of four years and found three common ways they build their fortunes.

1. "Saver-investors" focused on having no debt, lived well below their means, and invested and saved for many years.
2. "Virtuosos" were the best of the best in their careers, and worked for companies that gave stock options or owned their own highly-profitable businesses.
3. "Dreamers" were the wealthiest group: They pursued a big dream and made it a reality, which led to some massive gain or income.

Over a nearly four-year period, I interviewed 233 wealthy individuals. During these interviews, I asked each rich person 144 questions. It took me another 18 months to summarize and analyze their responses. In an effort to share my research I've written several books sharing their habits, thinking, psychology, decision-making, risk tolerance, careers and many other things, which I learned thanks to my "Rich Habits" Study.

One of the many things I learned was how they actually created their wealth.

What I found is that there were three predominant paths rich people pursued in order to accumulate their wealth.

1. THE 'SAVER INVESTORS'
Just less than 22% of the rich people in my Rich Habits Study fell into this category. The "saver-investors" all had zero debt, and the passive income generated by their invested savings was enough to meet or exceed their standard of living.

They all had five things in common:

A. They had a low standard of living and
B. They typically made a modest income and
C. Their modest income exceeded their low standard of living and
D. They saved 20% or more of their modest income for many years and
E. They consistently and prudently invested their savings for many years.

It took the Savers about 32 years to accumulate an average wealth of $3.4 million.

2. THE 'VIRTUOSOS'
Approximately 27% of the rich people in my study were "virtuosos." These rich people were virtuosos in their career, industry, or profession. They were among the best at what they did.

These individuals either worked for large, publicly-held corporations (in which a significant portion of their compensation was stock-based compensation) or they were entrepreneurs/small business owners with enterprises that were highly profitable.

It took the virtuosos about 20 years to accumulate an average wealth of $4 million.

3. THE 'DREAMERS'
The "dreamers" were by far the wealthiest group in my study. Approximately 51% of them were individuals who pursued some big dream and were able to turn that dream into a reality. Their dream eventually provided them with an enormous amount of income, profit, or gain, and they accumulated an average of $7.4 million in about twelve years.

SUMMARY:
The point to all of this is: There is more than one way to skin a cat.

If you're risk-averse, it does not disqualify you from becoming rich. If you have no dream or you're not interested in saving your way to wealth, becoming a virtuoso in what you do for a living can make you rich. If you are not a saver or a virtuoso, pursuing some dream that makes your heart sing can also make you wealthy.

If you want to be rich, the only important thing is to pick one path that works for you and stick with it for many years. The one common denominator all levels of wealth shared was time — it took many years to accumulate their wealth.

NIGERIAN EQUITY MARKET SUMMARY FOR 14TH AUGUST 2018 (Source: Arthur Stevens Asset Management)

BEARS DOMINATE AS YTD RETURN SLIPS TO 7.73%

Trading activities on the Nigerian bourse has now been in the red zone consecutively for 8 days.

Today, the benchmark index , NSE ASI and market capitalization dropped by 0.35% to close at 35,288.23 basis points and N12.883 trillion respectively. Overall year-to-date return now stands at -7.73%.

UBA led the volume log with 26.87 million units followed by LASACO with 12.24 million and FBNH with 11.45 million units. GUARANTY led the value chart with N289.74 million followed by UBA with N250.66 million and STANBIC with N136.80 million.

CBN official exchange rate closed at N306.05/$, I & E FX rate closed at N362.30/$ ,while the parallel market rate closed at N360$. As at 5.20pm, Brent Crude traded at $72.83 p/b in the international commodities market.

ACTIVITY LEVEL
At the end of the trading session, a total 164.51 million units of stocks worth N1.61 billion was exchanged in 3,448 deals. The Financial Services sector for 72% of total volume traded (63% by value), the Consumer Goods sector accounted for 7.10% of volume (21.47% of value), while Oil and Gas accounted for 7.00% of volume (4.38% of value).

MARKET BREADTH CLOSES NEGATIVE

Advancers/Decliners ratio pegged at 0.39x, closing negative for the day with 13 gainers and 33 losers.

MBENEFIT led the gainers chart with an increase of 10% to close at N0.33, followed by CUSTODIAN and LIVESTOCK which gained 9.94% and 9.52% to close at N5.64 and N0.69 respectively. The decliners log was led by ABCTRANS which lost 10% to close at N0.36. Similarly, UNIONDAC and ETERNA shed 10% and 9.72% to close at N0.27 and N6.50 respectively.

EQUITY REPORT FOR MONDAY 16TH JULY 2018
NSE ASI Down 0.34%

The NSE ASI (-34bps) settled at 37,266.86 and the market capitalization lost N45.61 billion to close at N13.50 trillion.

Activity levels were mixed as Volume traded increased by 43.05% to 303.48 million units and Value traded decreased by 36.95% to N2.04 billion.

Investor’s sentiment remained negative, as the market breadth (A-D Ratio) settled at 0.3x (vs. 0.7x previously), following price gains in 8 stocks against losses recorded in 32 stocks.

NAHCO (9.97%), SOVERNINS (8.70%) and LASACO (5.88%) were top gainers, while LEARNAFRCA (-10.00%), MULTITREX (-10.00%) and PZ (-10.00%) were top losers.

SOURCE: LeadResearch

ARM RESEARCH ANALYSIS (from nairametrics.com)

Every week Nairametrics brings 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 considered 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.

1. 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 deposits, increased loan book, expansion in its trading book, healthier asset quality, lower loan-loss provision, and resilience in fee income.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

2018 HALF YEAR REVIEW - NSE BEST PERFORMERS (abridged from Nairametrics.com)

Result Sheet - July 3, 2018:

June is over. If you are a retail investor with an active portfolio, this is the period to take stock of your portfolio performance in the last 6 months. For Nigerian stocks in general, the All Share Index closed basically flat @ 0.09% in the first 6 months of 2018. For June, the index closed positively, eking out a profit of just 0.46%.

Despite gloom in recent weeks, we did have some major winners in the first half of 2018, with about 37 stocks posting double-digit gains.
The top 5 gainers:
Ikeja Hotels: 76%
Learn Africa: 80%
Unity Bank: 83%
NEM: 93%
CCNN: 153%.

On this week’s Result Sheet, we take a look at some of the best performing stocks, so far this year. We start from bottom of the best, all the way to the best performing.

C&I LEASING
YTD return: About 60%
Position on list of H1-2018 best stocks: 10th.
Valuation: 2.9x earnings; 0.39x book value.
FY-2017 PAT:19% rise in profits to about N1 billion.
Important Note: Despite rise in profits, the company still has a debt load and has mooted raising capital. Could this be a reason for the rise in its share price? Some analysts believe there might be a correlation, as most stocks typically rise ahead of news of an equity raise. Investors smell an opportunity and ride their luck, hoping the capital appreciation could be sustained for a while.

FIDSON HEALTHCARE PLC
YTD Return: 62%
Position on H1-2018 best stocks: 9th.
Q1-2018 PAT: 26% increase, to N202 million.
Important Note: Rumours earlier in the year that Fidson was exploring a merger plan with May & Baker. The company put out a press release denying it but this has not stopped speculators propping up its share price. Don't be surprised if this goes on a little longer.

ETERNA OIL & GAS PLC
YTD Return: 66%
Position on H1-2018 best stocks: 8th.
Valuation: 4.22x earnings.
Q1-2018 PAT: 25% drop, to N510 million.
Important Note: Last May, NNPC issued a 2-year crude export license to some local and foreign companies, including Eterna Oil. Strong revenue potential and possible momentum for higher share price.

BETA GLASS PLC
YTD Return: 68%
Position on H1-2018 best stocks: 7th.
Q1-2018 PAT: 38% increase, to N1.10 billion.
Important Note: It is a subsidiary of Frigoglass Industries Nigeria Ltd which holds 61.9% ordinary shares of the company. The ultimate controlling party is Frigoglass S.A.I.C, Athens. We've been tracking Beta Glass for some time now and believe its strong capital appreciation is a function of strong earnings and lack of liquidity. It is incredibly difficult to find sellers for this stock.

CAVERTON OFFSHORE SUPPORT GROUP PLC
YTD Return: 69%
Position on H1-2018 best stocks: 6th.
Q1-2018 PAT: 37% increase, to N293 million.
Important Note: Caverton has risen largely on positive market sentiments in Q1, and the company signing a major contract with Chevron Nigeria Ltd. We like this stock too and have it on our watch list.

IKEJA HOTELS PLC
YTD Return: 76%
Position on H1-2018 best stocks: 5th.
Q1-2018 PBT: 82% increase, to N328 million.
Important Note: Rise in its share price is largely due to lifting of a 2-year suspension by NSE. There had been a boardroom tussle between Goodie Ibru and a faction led by Maiden Ibru. Goodie stepped down from the board in February last year, citing need for a new generation of Ibrus to take over. Some analysts believe this could be one of the major reasons there is a scramble for the shares. In fact, the stock experienced a major surge as soon as NSE lifted the suspension. This could be a bull trap, so be careful.

LEARN AFRICA PLC
YTD Return: 80%
Position on H1-2018 best stocks: 4th.
FY-2017 PAT: 13% increase, to N238 million.
Important Note: Not much can be deciphered on why the share price has grown this much, especially for a stock with very little volume of trade. We suspect a potential merger or acquisition in play here, or the company might be planning to raise capital. In terms of debts, it has a combined external loan of just over N100 million, so its unlikely that it is looking to raise capital to repay debts. This stock's performance remains a mystery to us.

UNITY BANK PLC
YTD Return: 83%
Position on H1-2018 best stocks: 3rd.
Important Note: Earlier in the year, it was the best performing stock, before being overtaken by CCNN. Rally in its share price was initially due to news of a planned $1 billion investment by a private equity firm, Milost Global. Milost terminated the agreement following threats by an unnamed investor. Unity however denied any form of agreement was signed. SEC is currently investigating the transaction. The renewed capital appreciation we have seen lately perhaps is indicative of another deal in the offing. Unity Bank was bailed out by the CBN and is running against time to get a buyer.

NEM INSURANCE PLC
YTD Return: 93%
Position on H1-2018 best stocks: 2nd.
Q1-2018 PAT: 24% increase, to N751 million.
Important Note: The first 5 months of the year are typically great periods for NEM stock. Some investors buy around February, hoping to see capital appreciation come April when they would have released their results. It did happen that way too. More recently, the company's board squabbles can be largely attributed to the share price hike.

CEMENT COMPANY OF NORTHERN NIGERIA PLC
YTD Return: 153%
Position on H1-2018 best stocks: 1st.
Valuation: 7.96x earnings.
Q1-2018 PAT: 95% increase, to N1 billion.
Important Note: Recent news of a merger with Kalambaina Cement, a subsidiary of BUA Cement. BUA is ultimately controlled by Abdulsamad Rabiu. Whilst this may not be the reason for the impressive return of the stock, investors typically like to buy stocks that have hints of mergers or acquisitions. The company's result has been impressive and perhaps investors are also bullish about its potentials, thus the reward of capital appreciation. Is this still a good buy? If its mid-year performance beats expectations, then one might in hindsight believe its current share price is cheap. Despite this, we do not see this stock hitting another 100% in the next 6 months (we hope we are wrong).

SOURCE: Nairametric.com (abridged for brevity).

FLOUR MILLS OF NIGERIA Q4 2018 RESULTS ANALYSIS

Flour Mills of Nigeria Q4 2018 Results – Sales Down by -14% YoY to N115.16B

By Brandspurng on July 2, 2018

Flour Mills of Nigerian (FMN) reports weaker-than-expected Q4 2018 (end-Mar) results.

Implications:
FMN’s 2018 PBT surprised negatively relative to consensus 2018 PBT forecast of N22.8bn. As such, we expect to see downward revisions to consensus 2019E PBT forecast and a negative reaction by the market. In terms of outlook, Bloomberg consensus wheat forecasts indicate that wheat prices which form bulk of FMN’s inputs are expected to rise by only c.5% between 2018 and Q1 2019 (end-March).

Although the company is exposed to a downside risk from a potential slide in the naira relative to other major currencies, we believe the likelihood of this is remote given prevailing price levels of crude oil and improved crude oil production levels relative to 2016/2017 levels.

Positives:
No obvious positives

Negatives:
Sales down -14% y/y. FMN reported a pre-tax loss of –N3.0bn (which came in lower than ours and consensus implied Q4 2018 forecasts of N667m and N3.3bn respectively). The weak earnings were driven mainly by a -96% y/y reduction in other operating income. Compared with our forecasts, Q4 sales missed by 21%. PBT and PAT also came in behind our N667m and N393m forecasts due to a negative surprise in interest expense. Although almost all the major divisions saw marked y/y reduction in sales, the foods business which declined by -27% y/y was the key driver behind the y/y decline in sales in Q4.

SOURCE: https://brandspurng.com/flour-mills-of-nigeria-q4-2018-results-sales-down-by-14-yoy-to-n115-16bn/

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