The Nigerian stock market declined significantly on the day, with the benchmark index falling 155 basis points led by losses in banking stocks. Year-to-date returns are now negative 10.57%. Several state governments are struggling to pay salaries due to declining monthly allocations from falling federal oil revenues. The document also provides stock recommendations and analysis for various sectors.

1. Retail views
UBA Q4 results
Nigeria Wednesday, 11 March 2015
Daily Retail Report
.
Market Review
The NSE witnessed a reversal of recent upward trend as the
benchmark index lost a whooping 155bps to close at 30,869.17bps.
Profit taking activities led to the southward move of all sectorial
indices with the banking sector leading the pack as it recorded
290bps loss by Guaranty (-4.98%), UBN (-4.98%), Zenithbank
(-4.97%), Diamondbnk (-4.91%) and Skyebank (-4.82%).
ASI year-to-date return currently stands at -10.57%. Among the
broad indices, Volume and Value of transactions depreciated by 1%
and 27% relative to previous session. Top worst performers were
UBCAP (N1.73), CAVERTON (N2.95) and ASHAKACEM (N 18.79)
while HONYFLOUR (N2.66), FO (N192.86) and NCR (N12.19)
Furtherance to releasing their FY results, Africa Prudential
Registrars ltd declared a dividend payment of N0.35kobo which
represents a 10.45% dividend yield at today’s closing price.
Investors should look out for opportunities as the market
experiences further decline at the next trading session.
Sector Report Today(%) Month-To-Date(%) Year-To-Date(%)
NSE30 -2.02 3.14 -7.91
NSE BNK10 -2.90 9.74 -3.73
NSE CNSM10 -2.18 0.02 -10.38
NSE OILG5 -1.87 -3.30 0.85
NSE INS10 -0.71 1.14 -9.34
Market Wrap
ASI -0.15% 30,869.17
Index year-to-date -10.57%
Market Cap. N10.300Tril
Traded value 3.855Bn
Key gainers (%)
UBCAP 9.49
ASHAKACEM 4.97
FIDELITY 4.64
MAYBAKER 4.40
UBA 3.93
Key losers (%)
HONYFLOUR -5.00
FO -5.00
GUARANTY -4.98
ZENITHBANK -4.97
STANBIC -4.82
NITTY
1M 14.1901
2M 14.5006
3M 14.8698
6M 14.4954
9M 15.6678
12M 16.0289
Crude oil spot price
Brent crude US$56.82
Contact information
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2. Daily Retail Report
Page 2
Retail views
0
Stock Recommendations
Banking Comment
Current
Price
Target
Price
Potential
Upside %
EPS
FY
2013
1 Yr
forward
EPS
Last
Dividend
(N)
P/BV
2013
Yield FY
2013
Yield FY
2014e
Shares
Outstanding
(millions)
Year
End
ACCESS BANK Buy 6.50 7.73 19% 1.60 1.90 0.35 0.80 7.10% 11.5% 22883.00 Dec.
DIAMOND BANK Buy 4.26 5.27 24% 2.00 1.70 0.30 0.60 5.40% 5.4% 14475.00 Dec.
FIDELITY BANK PLC Buy 1.58 1.86 18% 0.30 0.50 0.14 0.30 7.40% 11.6% 28974.00 Dec.
FBN HOLDINGS Buy 8.51 12.86 51% 2.20 2.30 1.10 0.80 10.00% 10.0% 32632.00 Dec.
GUARANTY TRUST BANK Buy 24.23 28.42 17% 3.20 3.30 1.45 2.20 6.90% 7.3% 29431.00 Dec.
STANBIC HOLDINGS Hold 26.65 32.37 21% 1.90 2.60 1.20 3.10 2.70% 3.5% 10000.00 Dec.
STERLING BANK Hold 2.23 1.57 -30% 0.40 0.40 0.25 0.80 10.90% 8.7% 21592.00 Dec.
SKYE BANK Under review 2.37 -100% 1.20 1.10 0.30 0.30 11.10% 20.7% 13219.00 Dec.
U B A Buy 4.23 5.70 35% 1.40 1.50 0.50 0.70 10.10% 10.1% 32981.00 Dec.
ZENITH BANK Buy 20.67 24.60 19% 3.00 3.00 1.75 1.30 8.10% 8.3% 31396.00 Dec.
Food & Beverage
EV/EBITDA (x)
2013
Yield FY
2013e
DANGOTE SUGAR REFINERY Under review 6.80 Under review N/A 0.89 1.20 0.60 4.70 7.40% 7.4% 12000.00 Dec.
CADBURY NIG. Under review 41.28 Under review N/A 2.90 3.20 1.30 7.60 0.00% 4.7% 1878.00 Dec.
FLOUR MILLS Hold 34.01 54.80 61% 2.90 3.50 1.60 8.90 3.30% 4.0% 2385.00 Mar.
HONEYWELL FLOURMILLS Buy 2.66 5.20 95% 0.40 0.30 0.17 12.00 5.70% 4.7% 7930.00 Mar.
NESTLE FOODS NIG. Hold 820.00 821.80 0% 28.10 31.30 24.00 24.90 2.60% 3.0% 792.00 Dec.
P Z INDUSTRIES Hold 27.43 34.60 26% 1.20 1.30 0.19 7.80 2.70% 3.0% 3970.00 May
U A C N Buy 36.73 72.60 98% 2.90 3.60 1.75 5.40 4.00% 4.7% 1920.00 Dec.
UNILEVER NIGERIA PLC Sell 34.86 31.80 -9% 1.30 1.60 1.25 13.70 3.80% 3.8% 3783.00 Dec.
Building Materials EPS 2013e
EV/EBITDA(x)
2013e
Yield FY
2013e
LAFARGE WAPCO PLC Under review 89.00 Under review N/A 9.40 9.40 3.30 8.20 3.30% 3.3% 3001.00 Mar.
DANGOTE CEMENT Buy 153.55 258.50 N/A 11.80 11.90 7.00 16.10 3.40% 3.5% 17040.00 Dec.
Breweries EPS 2013e
EV/EBITDA(x)
2013e
Yield FY
2013e
GUINNESS NIG. Sell 128.58 111.00 -14% 7.90 5.90 7.00 14.50 4.30% 3.0% 1506.00 June
INTERNATIONAL BREWERIES Hold 18.01 24.50 36% 0.90 1.30 0.30 16.20 1.00% 1.5% 3263.00 Mar.
NIGERIAN BREWERIES Sell 140.06 121.20 -13% 5.70 5.60 4.50 13.30 2.90% 2.1% 7562.00 June
Agriculture EPS 2013e
EV/EBITDA (x)
2013e
Yield FY
2013e
OKOMU OIL Buy 30.60 41.50 36% 2.20 3.00 1.00 9.00 3.20% 6.7% 953.00 Dec.
PRESCO PLC Buy 29.24 42.70 46% 1.29 1.60 0.10 9.20 0.40% 1.7% 1000.00 Dec.
Pharmaceuticals EV/EBITDA (x)
2013
Yield FY 2013
GLAXOSMITHKLINE BEECHAM NIG. Buy 40.00 78.60 0.97 3.10 4.30 1.30 8.90 2.50% 3.8% 957.00 Dec.
Note – for full report on the recommended stocks kindly send an email to cslcsu@firstcitygroup.com

3. Daily Retail Report
Page 3
Retail views
Top Highlight
Government Revenues
A case for diversifying states’ revenues away from oil
Yesterday, Business day newspaper reported that some state governments were finding it difficult to pay monthly salaries to their workers due to a
reduction in monthly allocations from the Federal Account. Around noon yesterday, local media began to carry stories of protests by civil servants
in Osun State (South West) who were allegedly owed five months’ salary arrears.
We first understood the extent of the financial difficulties being experienced by state governments in December 2014, when it was reported that 11
state governments were unable to fund workers’ salaries. Most state governments rely on monthly allocations from the Federation Account
Allocation Committee (FAAC) to meet their monthly overheads and to finance capital projects. However, there are a few exceptions such as Lagos
and Rivers states which have been able to significantly grow their internally-generated revenues (see CSL Nigeria Daily 23 September 2014).
FAAC allocations originate mainly from crude oil sales proceeds to the federal account. Since June 2014, when crude oil prices began to slide,
monthly allocations have trended downwards. Oil has fallen by 46.5% from 1 June 2014-to-date thought it is up by some 5.0 % year-to-date.
FAAC allocations for January 2015 stood at N500.1bn (US$2.5bn), their lowest level since the beginning of 2014 and 21% lower than the one-year
median of N629.1bn. We believe the direction of oil prices will continue to serve as a useful proxy for the quantum of monthly FAAC allocations.
Today’s news headlines
Military moves to liberate Bama: The Nigerian Army has launched a major operation to liberate the strategic town of Bama, Borno State from
Boko Haram insurgents. Investigation revealed on Tuesday that deployment of ground forces and equipment was preceded by days of targeted
aerial operations in Bama and its environs. An intelligence source, who made this known, said that the military was expecting a productive result
from Bama which was captured by the insurgents in September last year. Source: punchng.com
6.39 million workers register for Contributory Pension Scheme: About 6.39 million public and private sector workers in the country are
registered for the Contributory Pension Scheme, an investigation has revealed. Statistics obtained from the National Pension Commission on
Tuesday revealed that the 6.39 million contributors was for the 2014 financial year, rising progressively from 5.3 million and 5.9 million in 2012
and 2013, respectively. Source: punchng.com
Why we discourage states from borrowing – FG: The Federal Government on Tuesday explained that it was discouraging state governments from
borrowing because most of them were experiencing difficulties in servicing their existing debts. The Federal Government had last year directed that
Deposit Money Banks must always get approval from the Ministry of Finance before granting loans to any state government. The directive has
made it difficult for states to get loans from the banks for developmental purposes. Figures released by the Debt Management Office put Nigeria’s
debt profile as of December 31, 2014 at $67.72bn (N11.24tn), which was about N1.2trn higher than the 2013 debt stock of N10.04tn. Source:
punchng.com

4. Daily Retail Report
Page 4
Retail views
Important Risk Warnings and Disclaimers
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