Monday, July 17, 2017/3:06 PM/ GTI Research
Market Last Week (Our Observations)
The bulls returned to the market last week as reflected in the stronger sentiment which drove the benchmark index into the green following the negative performance from the prior week. The All Share Index advanced on all trading days of the week, improving 2.5% W-o-W while YTD gain improved to 23.8%.
The Banking index advanced the most, up 6.1% W-o-W on the back of gains in ETI (+14.0%) and ACCESS (+8.4%), while the Industrial Goods index rose 2.9% W-o-W. Similarly, the Oil & Gas and Insurance indices trended 2.3% and 0.9% higher W-o-W whilst the Consumer Goods index closed 0.7% northward.
The best performing stocks for the week were NEIMETH (+24.6%), UNITY (+19.7%) and FORTE (+15.3%) while CONOIL (-17.4%), UPL (-14.1%) and CHAMPION (-12.3%) were the worst performers.
Market This Week (Our Expectations)
The Afrinvest weekly sentiment indicator improved to 3.3 points from 2.5 points last week as market breadth improved last week.
As H1:2017 earnings scorecards begin to trickle in, we expect performance in the equities market to remain upbeat as investors take position in stocks with positive forward earnings projections.
However, we do not rule out the possibility of some profit taking on the back of the bullish performance in the previous week.
Our top pick for the week is MANSARD.
Top Pick for the Week: AXA Mansard Plc
AXA Mansard PLC underwrites life and non-life insurance contracts and deliver asset management to domestic retail, foreign and pension fund administration.
Q1: 2017 Gross Premium Written (GPW) increased 45.8% Y-o-Y to N12.9bn while Gross Premium Earned (GPE) expanded 27.3% Y-o-Y to N6.2bn in Q1: 2016.
In the same period, PBT recorded a 21.4% Y-o-Y uptick to N1.0bn while PAT rose 5.4% Y-o-Y to N0.7bn in Q1:2017.
Our 12-month target price stands at N2.30/share, implying an upside potential of 3.0% compared to N2.23 as at 14/07/17. Nevertheless, we believe the improved appetite for equities will boost investor sentiment towards the stock as the 2017 PAT is projected to rise to N3.5bn on account of a steady increase in NPI and attractive yield environment.