Monday, October 30, 2017 2:55PM / Afrinvest
Market Last Week (Our Observations)
Sentiment in the local bourse was largely bullish although the benchmark
index declined on 3 of 5 trading sessions to close at 36,462.26 points,
indicating a 0.3% decline W-o-W and a YTD return of 35.7%.
The Industrial Goods and the Insurance indices lost the most, down 3bps
apiece W-o-W. Similarly, the Banking, Consumer Goods and the Oil & Gas
indices marginally slipped 1bp apiece W-o-W.
The best performers last week were NASCON (+20.8%), DANGFLOUR (+19.6%)
and FIDELITY(+15.3%) while the worst performers were CUTIX (-22.3%), FORTE (-14.2%)
and MANSARD (-10.2%).
Market This Week (Our Expectations)
The Afrinvest weekly sentiment indicator improved to 4.0 points from 3.5
points recorded last week as market breadth improved - despite the bearish
performance observed during the week.
This week, we expect bargain hunting to ensue as positive signals from
last week’s trading pattern already show. In addition, we expect corporate
earnings releases for the week to shape sentiment.
Our top pick for the week is NIGERIAN BREWERIES.
Nigerian Breweries Plc
Nigerian Breweries is the largest brewing company in Nigeria by capacity
and turnover. With a total market capitalization of N1.1tn, it is the second
most capitalized stock on the Nigerian bourse as well as the most capitalized
stock in the Consumer Goods sector. It holds 11.2% of the NSE ASI weight.
The company concluded a merger arrangement with Consolidated Breweries;
further solidifying its industry leadership grip. This brought its total number
of breweries to eleven. Nigerian Breweries has consistently paid dividends
since 2005 and proposed a final dividend of N2.58 per share as at FY:2016.
In H1:2017, the company recorded a top line growth of 15.0% to N181.0bn
from N157.4bn while in turn bottom line rose 24.6% to N23.8bn from N19.1bn.
The stock has a 14-day RSI of 29.0 and currently trades at N152.00
(10/27/2017). Nevertheless, Nigerian Breweries has continued to enjoy buy
sentiment as it remains one of the stocks tracked by FPI’s.