Monday, October 23, 2017/2:10PM/ Afrinvest Research
Market Last Week (Our Observations)
Sentiment in the local bourse was bearish last week as the All Share Index (ASI) slid 0.7% W-o-W while the YTD gain moderated to 36.1%.
We saw a bearish performance across sectors with all indices trending downwards W-o-W. The Insurance index led losers, down 3.6% W-o-W. The Oil & Gas index trailed, shedding 1.7% W-o-W, while the Consumer Goods index closed the week 1.2% lower. Similarly, the Industrial Goods and the Banking indices weakened 70bps and 3bps W-o-W respectively.
Top gainers were INTERBRW (+21.8%), GLAXOSMITH (+14.3%) and CUTIX (+8.8%) while REDSTAREX (-13.0%), MANSARD (10.4%) and LAWUNION (-8.6%) were the top losers.
Market This Week (Our Expectations)
The Afrinvest weekly sentiment weakened to 3.5x from 4.7x recorded last week due to a decline in market breadth.
With a mixed reaction in earnings season so far, we expect companies to race to meet up with month-end deadline for filing unaudited Q3 results.
Accordingly, we expect investors’ reactions to these result to drive equity market performance this week.
Our top pick for the week is ACCESS.
Top Pick for the Week: Access Bank Plc.
Access Bank Plc Access or the Group or the Bank ranks as a Tier-1 bank based on Afrinvest classification with total assets of N3.5tn as at FY:2016 and also qualifies as a Systemically Important Bank (SIB) based on the CBN s taxonomy.
Access has its footprints across Sub-Saharan Africa, China, Lebanon, UAE and the UK. The Groups presence in Africa cuts across Ghana, Rwanda, Zambia, the Gambia, Sierra Leone and R.D. Congo with 33, 7, 6, 6, 4 and 2 branches respectively.
The Bank continued its impressive performance in H1:2017 with Gross Earnings growing 41.7% Y-o-Y to N246.6bn whilst PAT rose 17.5% Y-o-Y to N39.5bn. Interest income also increased 44.2% to N161.9bn in the period. The Bank also declared a dividend of N0.25 implying a yield of 2.4%
The stock has a 14-day RSI of 40.0 is currently trading at a current price of N9.50 (20/10/2017).