MorganCapital Group

Equity Research Nigeria

Maximize your returns and stay ahead of the curve, open a Stock broking account with MorganCapital Securities today, and enjoy many other online services including rigorous research reports and support. Its time to Invest like a Pro

Yet another value week as dividend expectation halts sell pressure

The Nigerian Equities market continues to defile the norm which sees huge sell pressure during the December festive period. The market has continued to swing both ways as the bulls and the bears struggle to assert themselves on the market. Focus on year-end dividend declarations and prospects for long term capital appreciation is a major catalyst for the long term value investor, while the impressive year to date return of the market is a major incentive for the speculative trader to call in profit. Going into the new week, it is our opinion that the resolve of the value investors will out weigh speculative sentiments and the market will continue to hold firm going into the first quarter of 2014.

research@morgancapitalgroup.com

MorganCapital Group

Equity Research Nigeria

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 becomes bullish.

Top 5 Nigerian Equities League for the Week commencing [23/12/2013]

FY 2012[Actual] FY 2013 [Forecast] Latest Result

Ranking For The Week

NSE Ticker

Bloomberg Ticker

*Current Price [N}

Recommended Entry Price [N]

Investment Horizon

Fair Value/Exit Price [N]

Expected Returns [%] P/E

Net Margin [%]

EPS [N]

Exit P/E

Dividend Yeild [%]

Turnover/ Gross Earnings [N'm]

PAT [N'm)

EPS [N]

[9M -13] 1 DANGSUGAR 2 UBA 3 TOTAL 4 ACCESS 5 DANGCEM DANGSUGAR:NL UBA:NL TOTAL:NL ACCESS:NL DANGCEM:NL 11.38 7.93 165.05 9.25 211.00 11.38 or less 12 Months 7.93 or less 12 Months 14.30 9.73 197.79 10.64 237.11 25.66 22.70 19.84 15.03 12.37 11.62 4.57 10.90 5.02 14.59 10.33 26.15 2.14 18.43 50.10 1.10 2.98 15.11 1.87 11.85 13.00 3.02 13.09 5.69 20.01 5.27 7.57 7.57 5.41 2.13 77,701 [9M- 13] 188,021 [9M -13] 174,331 [9M -13] 154,427 [9M -13] 211.00 or less 12 Months 288,984

[9M -13] 9,628 [9M -13] 37,371 [9M -13] 3,260 [9M -13] 27,597 [9M -13] 154,905 9.19 1.61 9.60 1.08 0.80

165.05 or less 12 Months 9.25 or less 12 Months

*Price as at 20/12/2013.

Commentary
Dangote Sugar claims the top position on our top-5 league for this week. The company currently has an upside potential of 25.66% from current price to our estimate fair value. Our dividend forecast for the stock is 60K UBA shrinks to the second position on the league table this week with a potential upside of 22.70% from current price to our estimate fair value. Our dividend expectation for FY 2013 is 60K per share.

research@morgancapitalgroup.com

MorganCapital Group

Equity Research Nigeria

Total Nigeria climbs up one step to the third position on the league table for this week. The price of the stock was largely unchanged all the just concluded trading week. The stock remains well positioned in the downstream oil marketing sector despite its many challenges. Total stock has a potential upside of 19.84% from current price to our estimate fair value. Our forecast dividend for FY 2013 is N12.50 Access Bank steps up a notch on the top-5 league table this week, coming in at the fourth position after the stock made its debut on the league table last week. The Bank currently has an upside potential of 15.03% and our dividend expectation is 50K Dangote Cement falls to the bottom of 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 companys 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 12.37%. Our dividend forecast is N4.50 for FY 2013.
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 customercare@morgancapitalgroup.com. Our research is based purely on fundamentals and emerging verifiable information. Kindly note that our league table is subject to change based on fluctuations of market prices and/or a review of our fair value estimates. These reviews are based on fundamentals and verifiable information coming from the companies.

research@morgancapitalgroup.com