The Nigerian Equities Market closed the week on a positive note, gaining 2.34% to close the week ended (29/07/2013-02/08/2013) firmly in the green. The market got some respite following the bearish run that hit the market after the MPC hiked the CRR for public sector funds to 50% from 12%. We saw a run on banking shares as investors priced in the impact of this hike in the forward earnings expectation for the banks and consequently took flight into bell weathers like Dangote Cement, UACN, Nestle, 7UP, Unilever, GSK ,etc. which have a history of consistent dividend payment. Banking stocks remain conspicuously absent again this week as we continue to discuss with management of the banks under our coverage to ascertain their exposure to public sector funds and their strategies to curbing the downside effect of the new policy and its impact on year end profitability.
We urge our subscribers to continue to invest based on the principles of sound fundamentals at good entry prices bearing in mind that in a bear market, stocks with good fundamentals have the capacity to retain value, and even when their prices crash, they are the quickest off the mark in price appreciation when the market sentiment become bullish.
Top 5 Nigerian Equities League for the Week commencing [05/08/2013]
NASCON climbs to the top position on the top 5 this week for the first time since the league was created with a potential upside of 37.70% from its current price to our estimate fair value of N16.80. Although the company suffered a steep 24% decline in revenue in the recently released Q1 -13 result, bottom-line improved marginally by 0.7%. We expect EPS to settle at N1.12 at FY 2013. Our dividend expectation for FY 2013 is 50K
Total Nigeria creeps to the second position on our league this week. The stock remains well positioned in the downstream oil marketing sector despite its many challenges. Total stock has a potential upside of 31.82% from current price to our estimate fair value. Our forecast dividend for FY 2013 is N12.50
Dangote Sugar climbs up to the third position on our top-5 league for this week. The company currently has an upside potential of 21.70% from current price to our estimate fair value. Our dividend forecast for the stock is 60K
Dangote Cement steps down a notch to the fourth position on the league table this week. We like the forward prospects of Dangote Cement and find long term value in the stock at current prices. The company continues to demonstrate its efficiency in the management of its controllable cost lines by maintaining its fantastic margins (operating, gross and net) and this is despite the huge finance charge obligations of the company. We think the company’s huge investment in capacity will yield outstanding returns for the medium and long term investor. The company currently has above 60% of the cement market in Nigeria and capacity utilization is below 80% which gives room for a lot more growth going forward. The company currently has an upside potential of 20.97%. Our dividend forecast is N4.50 for FY 2013.
Fidson is back on the league table this week, after the company shed some weight in the last three weeks, coming in at the fifth position. The company has retuned over 30% over the last seven weeks and currently has an upside potential of 11.01%. Our forward dividend expectation for the stock is 30K
For other stocks that make up the top ten on our league table and other company specific research reports, investors can send their enquires to firstname.lastname@example.org. Our research is based purely on fundamentals and emerging verifiable information.