Are these buying times?

“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.” – Warren Buffet, arguably the most successful investor of our time.

One’s thought may be very far from Warren’s quote as a number of investors have lost quite a lot of money recently due to the current state of the Nigerian equity market. The value of most portfolios have declined greatly as one-year All-Share-Index stands at -25.02%, this means that the average value of shares prices of all companies on the exchange has declined by 25.02% from prices as at 29^th July 2014. 

However, it is important to ring aloud this ‘words of wisdom’ as it holds true for the current market trend; market counters, especially those in the Banking sector (please see attached report on Banks’ profitability), are drawing very near  their 52-week low, and in some cases more than 50% away from their 52-week high. The table below shows a few of these companies share price performance :

Company	Current Price	52wk low	52wk high	Variance from current price
Transcorp	2.13	2.02	7.08	-232%
Flourmill	28.98	26.6	73.55	-154%
Oando	12.42	11.53	29.3	-136%
Access Bank	4.91	4.5	9.47	-93%
FBNH	7.5	5.77	14.11	-88%
Diamond Bank	3.8	3.45	6.76	-78%
Int.Breweries	18.24	17.02	32	-75%
Nascon	6.37	5.68	10.94	-72%
Zenith	16.5	14.54	25.8	-56%
Skye Bank	2.02	1.62	3.13	-55%
Stanbic	22.5	22.71	34.86	-55%
UBN	7.79	6.48	11.74	-51%
UACN	41.5	26	62.4	-50%
Fidelity	1.55	1.13	2.27	-46%
GTB	24.2	16.69	31.88	-32%
Sterling Bank	2.14	1.96	2.54	-19%
ETI	19.5	13.1	23.02	-18%

If you didn’t take positions during the sell-down in February (see below chart), this is another opportunity to take advantage of current weakness in stock prices with focus on a medium to long term horizon.

Investors who simply wish to minimise downside risk on their global portfolios can also invest through our  money market funds below:

1.       Fund Investment Product (US Dollar) Bond Notes - The Notes will invest in fixed income securities issued by sovereigns, supranational bodies and corporations, with a bias for African debt issuers.

2.      Legacy Short Maturity (NGN) Fund – A low-risk Fund that seeks to preserve capital and generate stable income by investing in safe, short maturity securities. Indicative annual return on the Fund is between 12-13%

Please feel free to contact us via cslservice@fcmb.com or call our direct lines 01-2713920(3); 01-2714834 for further information:

Thank you for your continued patronage

The equity market today

NSE… In the absence of active buying activity, the Nigerian Equity market tanked further at today’s session. Heavy throbbing in large caps: FBNH(-3.73%), Guinness(-1.73%), GTB(-1.73%) and Nig.Brew.(-0.83%) pushed the benchmark index further southward. Most sectoral indices on the exchange reeled under pressure with the Insurance counters leading the pack. NSEIND and NSEOILG were the only sub-indices that closed in the green, on the backdrop of Wapco(+4.13%) and ForteOil(+1.90%) NSEASI lost 0.25% to close at 30,436.18bps. In the broad market, decliners thumped advancers 32 to 14 leaving 68 issues unchanged. Market activity level depreciated today; trades valued at N4.21bn represents 4.05% decrease from the last session. Top worst performers were Pharmadeko(N2.14), Livestock(N1.76), and Portpaint(N3.96) while Transexpr(N1.10), 7-Up(N190.00), and CCNN(N9.14) led the gainers’ list. Buying opportunities abound in highly capitalized stocks; buy into penny stocks with strong fundamentals and you may consider stocks trading below its 52yr lows NASD… The Equities market recorded a negative trend as all the stocks traded southwards thereby losing N2bn in market capitalization to close at N541bn as against N543.82bn recorded yesterday. 17deals was executed today, amongst which 14deals recorded negative price changes and 3 remaining unchanged to offer an activity level of 19,885,431units in total volumes of stocks and N78,310,932.48 in value traded.   NDEP Plc led the losers pack to record a price difference of -N4.01 to close at N149.99, Friesland Campina WAMCO Plc followed by losing -N1.10k to close at N298.90k, Partnership Plc  lost -0.15k, while Trustbond  Plc and CSCS Plc  both lost -0.07k and -0.01k. For the unchanged prices; Cappa & Dalberto Plc, Food Concepts Plc, and IGI Plc closed at N79.00, 0.85k, and 0.50k respectively. As for volumes; CSCS Plc traded 13,051,931units, Partnership Investment Plc traded 6,821,000units to record the highest volumes traded for the day. Clearly we still maintain a neutral stand even as we expect more long term bargain hunting trades from investors. For more information on the market report click here.

Equities Market Summary

Detailed below is the equities market summary:

INDEX:                                   31,091.69pts    

NET CHANGE %:               -0.40%

NET CHANGE VALUE:     -125.03

VALUE:                                  N1.788bn ($9.080mn)

Comment:

·         NSE 30  -0.47%; NSE50 -0.45%; NSE BNK -0.38%;  NSE CNSM - 1.02%

·         NSE IND -0.04%; NSE INS  0.24%; NSE LOTUS -0.22%;  NSE OILGS -1.03%

·         Key Drivers of NSE BNK: FCMB; FBNH; FIDELITYBK; ZENITHBANK & ETI

·         Key Drivers of NSE CNSM: NASCON; PZ;FLOURMILL; DANGFLOUR & NB

·         Key Drivers  of NSE IND:   CAP

·         Key Drivers of NSE INS: MANSARD & NEM

·         Key Drivers  of OILGAS: FO & OANDO

·         19 stocks advanced 30 declined and 58 remained unchanged.

·         The highest value of trades were in GUARANTY; NB; ZENITHBANK; DANGCEM & ETI

OTC offers available to be traded on the NASDOTC platform

Please find below available in the Nigerian market:

Kindly contact us if you are interested in these shares.

Please note that the offer is available in the market and it’s on first come first served basis

NASD OTC Market gains at today’s trading session.....

The Equities market opened this week on a bullish note as the market capitalization gained N97.1m to close at N540bn in 5 deals.

Activity levels today recorded an increase in total volumes of stocks and value traded; the figures recorded were 348,546units and N97,132,425.40 respectively.

5 deals were consummated in total with Friesland Campina WAMCO Plc. leading the pack to gain N18.75k(+6.49%) in 4 deals with a total of  347,834 units sold, and CSCS Plc. recording only a(1) deal leaving its share price unchanged at N6.00 trading only 712units.

Food Concept Plc, Cappa and D'Alberto and NDEP maintained their previous trading price of 0.85k, N80.00 and N190.00 respectively.

We anticipate further that the market will be more attractive for investors even as the bargain hunting still remains with investors.

For enquiries, please contact:

E – cslservice@fcmb.com; cslrmt@fcmb.com

T - 01-2641295 

M- 08055250071

CSL PZ Cussons Nigeria Full Report 16 July 2015

PZ Cussons (PZ) is dealing with the consumer slowdown better than its peers, we believe. The reasons are its broad range of Home and Personal Care (HPC) products, which are both branded and in the value range, its exposure to the still-growing electrical appliances market, and its careful balance sheet management.

·         PZ has high market share in dishwashing liquids (c.62% market share according to Euromonitor) and in soap (c.30% market share).

·         In contrast with some listed peers, PZ has avoided financial leverage, and has generally avoided high dividend pay-outs. We forecast net cash at 9% of equity in 2015e.

·         Naira devaluation negatively impacts the consumer and we reduce our sales forecasts for PZ by 9-10% for the forecast period 2015e-2019e, though we note that our 2018e-2019e forecasts remain well ahead of consensus estimates.

·         We lower our EBIT and PBT forecasts for the period 2015e-2019e, and lower our Net Profits forecasts by 44%-59% in the period 2015e -2019e.

·         However, we believe that PZ is unusual among Nigerian HPC companies in being able to grow its sales, albeit slowly, despite consumer weakness. We forecast sales growth in every year 2015e-2019e.

·         While mass-market HPC sales are soft, we observe that sales of electrical appliances (Haier Thermocool) to upper middle class customers remain strong.

·         We reduce our valuation of PZ from N34.6/s and set a new price target of N29.7/s. We value PZ by combining a discounted cash flow model with a relative valuation of spot multiples in a ratio of 60:40. We retain our Hold recommendation on the stock.

NASD REPORT

NASD OTC Market Cap changes direction Up North.....

The Equities market traded bullish today as most of the stocks gave in to buy-pressure from investors. Consequently, the Market Cap gained N14bn to close at N536bn in 9 deals.

While today's activity levels logged a significant fall in the total volume of stocks and value traded; the figures recorded were 9,800 units and N1,150,434.00 respectively.

Out of the 9 deals consummated, ARM Properties led the losers table loosing (-3.87%) 0.12k to close at N2.98 while Resourcery Plc. lost (-1.89%) N0.01k to close at N0.52k.

Friesland Campina WAMCO which traded in a single deal also led the gainers table gaining (+4.91%) N14.00 to close at N285.00.

CSCS Plc, Food Concept Plc, Cappa and D'Alberto maintained their previous trading price of N6.00, 0.85k and N80.00 respectively.

Clearly, momentum remains even as we reiterate that much of this impact will likely be transient, as long term fundamentals for Nigerian equities remain strong -- a scenario we believe favors long term equity play.  

For enquiries, please contact:

E – cslservice@fcmb.com; cslrmt@fcmb.com

T - 01-2641295 

M- 08055250071

Golden Capital PLC Rights Issues

Dear Valued Client,

Golden Capital Plc. has announced its intention to raise N374.5 million through Rights issues of ordinary shares under the following terms:

Issue Price:                            N0.50k per share

Offer Ratio:                           Sixteen (16) new Ordinary Share for every twenty five (25) ordinary shares held by its existing shareholders as at March 31^st, 2015.

  

Closure Date:                        August 05, 2015

While the offer lasts, CSLS Customer Service is pleased to assist by:

·         Subscribing for and/or sell all or part of your rights.

·         The retrieval  of your Rights form(s) from the Registrars

  

Kindly send a mail of interest (or) further information to;

C/O Osamuede Fadaka

CSL Stockbrokers Ltd,

3^rd floor Primrose Towers,

17a Tinubu Street, Lagos.

  

Or

cslservice@fcmb.com or osamuede.fadaka@fcmb.com

Telephone: 01-2641295 

Thank you.