Following the release of 9M'14 results for the period ended 30th September 2014, we present our revised estimates for the banks within our coverage. Our perception is that overall sector performance was generally mixed, with a few banks reporting modest earnings growth. We remain more optimistic on Tier 1 Banks as these counters generally offer better risk/reward tradeoff.
More questions post-Mainstreet acquisition: In addition to capital raising (by mid-2015 reiterated), following the recent acquisition of rescued bank Mainstreet Bank by Skye Bank (final regulatory approvals still in the works), the market will have a lot to ponder in the coming year. Although management was guarded in what it disclosed on the transaction, we have assumed a N120bn price tag for Mainstreet as the newswires reported. Several other questions are still unanswered.
Fidelity Bank Plc (Fidelity) recently published its 9M-14 results that showed EPS growth of 1.6% yoy, behind our FY-14E expected growth. Following new insight from the management call, we revise our 12-month target price down to N1.60 from N2.45 and downgrade our recommendation to a HOLD from a BUY.
9M14 revenue grows by 1.6% y/y In the nine months period to September 2014, Okomu Oil Palm recorded an increase in revenue to N6.90billion, up by 1.6% compared with N6.79billion in the previous year. Also, the company reported revenue of N2.03billion in 3Q2014, i.e. a decline of 33.2% compared with N3.04billion in the second quarter of the review year but an increase of 3.7% compared with N1.96billion in 3Q2013. The third quarter revenue is lower than 8-quarter average of N2.24billion by 9.5%; similarly, it is also lower than our estimate of N2.10billion by 3.1%.
Today, FBNH recorded a moderate loss of -4.8% as sell pressure towards the stock gained tempo, following the prolonged and active sell activities recorded in the recent weeks while investors sentiments strongly remained negative so far in the year.
Bear market is inevitable, but so is the recovery. It is quite better to plan your bear market investing approach with realistic time horizon. Investors should prepare to buy and hold for long term as more sell pressure may hit market.
MRS Oil Nigeria Plc (MRS) released 9M 14 unaudited results, wherein revenue was flat (+0.4%) YoY at N69.2 billion. However, largely reflecting softer input costs, PBT and PAT increased 9 and 6 folds to N1.2 million and N577 million, respectively.
Kindly find below the updated analyst/investor conference calls for listed entities on the Nigerian bourse that have declared their Q3 2014 results as well as on the proposed merger between Nigerian Breweries and Consolidated Breweries Plc.
Moving to Neutral; upside similar to Neutral-rated tier-1 banks: We are lowering our recommendation on Diamond Bank from Outperform to Neutral - the first time since we initiated coverage in July 2011 not because of the impact of the rights issue (this was already reflected in our model), but because of a more subdued outlook by management going into 2015.