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

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Market Report

Market Review- NSE

Witnessing further downtrend, the benchmark index lost 0.32% to return 31,628.85bps. Sub-sectors monitored by the exchange showed mixed performance; NSEIND and NSEINS added gains on the back of heavyweight Dangcem(+1.01%) and Mansard (1.82%) while NSEBNK, NSEOILGS and NSECNSM closed in negative territory on the backdrop of UBN(-4.94%), Nascon(-1.97%) and Oando(-4.90%)

Market capitalization closed at N10.801Tril as ASI year-to-date stands at -8.74%. Among the broader indices volume depreciated by 44% while value appreciated by 39% relative to previous figures as 264million units of shares valued at N5.466bn exchanged hands. Top in the gainers territory are UNITYBNK (N2.46), LIVESTOCK (N2.11) and CAVERTON (N3.55) while TRANSEXPR (N1.28) AGLEVENT (N1.33) FLOURMILL (N30.69) led the losers’ territory.

UBA Capital Plc. has released its H2 2015 financial report for the period ended 30th June 2015. Revenue (N2.750Bn) and PAT (1.408bn) appreciated by 22% and 13% respectively from prior period

Market prices remain very attractive for investors with long term outlook.

Market Review- NASD

NASD - OTC Market reacts negatively today.....

Recent negative sentiments seen in equities market generally rubbed off on the NASD OTC as its market capitalization lost N27bn to close at approximately N544bn with feeble gains only seen in speculative counters.

However; from today's activity levels, there were a total of 4 deals which indicated significant drop to the number of deals achieved on the previous trading day.

The total volume of stocks and value traded was 163,750 units and N157,750 respectively. On the 4 deals consummated, 3 was on CSCS Plc while the remaining one was on IGI Plc. CSCS Plc which opened at N6.00  lost 0.50kobo to close at N5.50k serving as the only loser in the losers table while IGI maintained its previous trade price of 16k.

From all market indications, we anticipate a wait and see scenario from many investors, with meaningful clarity likely to hinge on a firm direction as per FX and the macro landscape. For long term play however, we believe the market is near ripe for bargain hunting, with the Q2 earnings season.

For more information on the market report, and price list, send an email to cslservice@fcmb.com

NIGERIA | OIL&GAS | SEPLAT - Eyes on Afren

·         Seplat has announced the release of US$368m in escrow cash. This is part of a total amount due of US$453m, which was allocated for an underlying acquisitions earmarked in Q1 2015.

·         Investors may have thought that given the escrow nature attached to these funds, there was never any doubt that they would be repaid. We were aware of a timing issue related to exactly when the funds would be remitted.

·         We have therefore added back N134/share (43p/share) in value from the US$368m remitted, which increases our target price from N457/share to N749/share, and maintain our Buy recommendation.

·         We know that Seplat previously unsuccessfully bid for Afren (Sell, TP 0, price 1.9p), and so, given the timing of the proposed recapitalisation vote due on 24 July, a full takeover could still be possible if a ‘No’ vote is successful.

·         In our previous note dated 9 January ‘Bargain Hunting in the Delta’ we examined the logic of any merger/acquisition between the two companies. We concluded that it could create the largest indigenous E&P in Nigeria, doubling Seplat’s 2P reserves, and trebling 2P and 2C reserves/resources, with the potential to achieve 200kboepd in production by 2018/19. Any acquisition of Afren would be a transformation in our view for Seplat, and could provide a significant catalyst to its shares given the discounted price which they could achieve now.