The Nigerian stock market trimmed gains from the previous seven-day rally, as speculative traders engaged in profit-taking. The banking sector was the only sector to close higher, while the oil and gas sector declined the most. Nestle released its full year 2014 results, with revenue up 8% but profit falling slightly. The report provides stock recommendations for various sectors and companies, with price targets and analysis. It also discusses Nigeria's rice industry challenges and illegal rice imports undermining local production.

1. Retail views
UBA Q4 results
Nigeria Wednesday, 25 February 2015
Daily Retail Report
.
Market Review
The Nigerian Stock Exchange experienced a slowdown at today’s
session as the benchmark index trimmed gains garnered during the
market rally of the last seven days. Speculative traders engaged in
profit taking leading to losses among key sectoral indices: uptick in
the prices of UBN(+4.93%), FBNH(+2.5%), Fidelity(+2.46%) and
GTB(+2.20) made the Banking sector the only one to close
northward. NSEOILG was the most hit on the backdrop of Oando
(-3.96%), FO(-3.09%) and Total(-0.35%).
28 stocks declined, 21 stocks advanced while 48 issues remained
unchanged. Notable among the broad indices was the significant
rise in market activity: 369million units of shares valued at N4.496
billion represents a 33.2% and 18.8% rise in volume and value
traded respectively. JBERGER (N44.00), ETERNA (N2.69) and UACN
(N38.84) led the top gainers’ list while ACADEMY (N1.06), NASCON
(N6.20) and OANDO (N13.35) are the top losers.
Nestle released its Financial statement for the year ended 31st
December, 2014. While topline grossed N143.2bn, an improvement
of 8%, PAT fell slightly by 0.1% to N22.2bn from prior year. The
company has proposed a final dividend of N17.50 for registered
Shareholders as at 24th April 2015.
Cautious trading is advised.
Sector Report Today(%) Month-To-Date(%) Year-To-Date(%)
NSE30 0.29 -11.92 -8.33
NSE BNK10 1.20 -5.16 -1.75
NSE CNSM10 -0.30 -15.11 -12.56
NSE OILG5 -0.93 3.92 6.91
NSE INS10 -0.74 -8.06 -5.45
Market Wrap
ASI +0.17% 30,195.56
Index year-to-date -8.79
Market Cap. N10.075Tril
Traded value 4.496Bn
Key gainers (%)
FBNH 2.50
SEPLAT 2.17
GUARANTY 2.20
UNILEVER 0.38
UACN 4.97
Key losers (%)
TOTAL -0.35
OANDO -3.96
FO -3.09
STANBIC -2.64
GUINNESS -0.37
NITTY
1M 13.4295
2M 14.6774
3M 14.9159
6M 15.0282
9M 15.8490
12M 16.0037
Crude oil spot price
Brent crude US$59.29
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 6.55 7.73 18% 1.60 1.90 0.35 0.80 7.10% 11.5% 22883.00 Dec.
DIAMOND BANK Buy 4.20 5.27 25% 2.00 1.70 0.30 0.60 5.40% 5.4% 14475.00 Dec.
FIDELITY BANK PLC Buy 1.25 1.86 49% 0.30 0.50 0.14 0.30 7.40% 11.6% 28974.00 Dec.
FBN HOLDINGS Buy 7.80 12.86 65% 2.20 2.30 1.10 0.80 10.00% 10.0% 32632.00 Dec.
GUARANTY TRUST BANK Buy 23.20 28.42 23% 3.20 3.30 1.45 2.20 6.90% 7.3% 29431.00 Dec.
STANBIC HOLDINGS Hold 25.07 32.37 29% 1.90 2.60 1.20 3.10 2.70% 3.5% 10000.00 Dec.
STERLING BANK Hold 2.25 1.57 -30% 0.40 0.40 0.25 0.80 10.90% 8.7% 21592.00 Dec.
SKYE BANK Under review 2.14 -100% 1.20 1.10 0.30 0.30 11.10% 20.7% 13219.00 Dec.
U B A Buy 3.66 5.70 56% 1.40 1.50 0.50 0.70 10.10% 10.1% 32981.00 Dec.
ZENITH BANK Buy 18.75 24.60 31% 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 6.24 Under review N/A 0.89 1.20 0.60 4.70 7.40% 7.4% 12000.00 Dec.
CADBURY NIG. Under review 38.80 Under review N/A 2.90 3.20 1.30 7.60 0.00% 4.7% 1878.00 Dec.
FLOUR MILLS Hold 35.20 54.80 56% 2.90 3.50 1.60 8.90 3.30% 4.0% 2385.00 Mar.
HONEYWELL FLOURMILLS Buy 2.90 5.20 79% 0.40 0.30 0.17 12.00 5.70% 4.7% 7930.00 Mar.
NESTLE FOODS NIG. Hold 824.01 821.80 0% 28.10 31.30 24.00 24.90 2.60% 3.0% 792.00 Dec.
P Z INDUSTRIES Hold 28.41 34.60 22% 1.20 1.30 0.19 7.80 2.70% 3.0% 3970.00 May
U A C N Buy 38.84 72.60 87% 2.90 3.60 1.75 5.40 4.00% 4.7% 1920.00 Dec.
UNILEVER NIGERIA PLC Sell 34.31 31.80 -7% 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 85.41 Under review N/A 9.40 9.40 3.30 8.20 3.30% 3.3% 3001.00 Mar.
DANGOTE CEMENT Buy 153.40 258.50 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 125.02 111.00 -11% 7.90 5.90 7.00 14.50 4.30% 3.0% 1506.00 June
INTERNATIONAL BREWERIES Hold 17.20 24.50 42% 0.90 1.30 0.30 16.20 1.00% 1.5% 3263.00 Mar.
NIGERIAN BREWERIES Sell 137.74 121.20 -12% 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 33.81 41.50 23% 2.20 3.00 1.00 9.00 3.20% 6.7% 953.00 Dec.
PRESCO PLC Buy 32.38 42.70 32% 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 42.00 78.60 0.87 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
RICE (3)– Nigeria’s rice industry and its challenges
Akinwumi Adesina, Nigeria’s Minister of Agriculture and Rural Development, on Monday, announced that the government aims to increase the
domestic production of milled rice by 2.9 million tonnes in the near term, bringing the country closer to its goal of becoming a net exporter.
According to data from the United States Department of Agriculture (USDA), Nigeria consumed around 6.1 million tonnes of milled rice in 2014,
with about 58% of this imported.
In 2011, the government launched the Agricultural Transformation Agenda and the Growth Enhancement Scheme, in a bid to achieve self-
sufficiency in the production of rice and five other crops, where it possesses a competitive advantage. Under these schemes, the government
encourages small and medium scale rice farmers by providing them with cheap loans, high-quality seeds, and subsidised fertilisers. In other cases,
the government incentivises larger-scale farmers by providing them with free farm lands and tax rebates.
While some progress has been made with regards to expanding local production, the government still grapples with the problem of illegal rice
imports which makes some domestic production uncompetitive. The Ministry of Agriculture and Rural Development, last year, hinted that about
8,000 bags (or 400 tonnes) of rice are smuggled into Nigeria daily from Benin Republic alone.
We understand that last year imported rice sold for between 25%-40% lower than locally-produced rice, though we believe that the spread in price
between locally-produced and imported rice may have contracted due to the recent devaluation of the naira, which has fallen by 9.3 % year-to-date
in the interbank market.
The government had cited plans to completely eliminate rice imports this year but we doubt this is feasible. The long-run success of the domestic
rice industry will depend on the government’s ability to curb smuggling and eradicate parallel imports, in our view.
Today’s news headlines
Power generation drops as Seplat shuts down Oben gas plant: Electricity generation in the country has dropped as Seplat Petroleum
Development Company Plc has shut down the Oben Gas Plant, a joint venture between the company and the Nigerian Petroleum Development
Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC). The 10-day long shut-down, which will enable the company
to tie in its expansion unit with the existing plant, will reduce gas supply to the country’s power generating plants by 135 million standard cubic
feet of gas per day (MMSCF). Source: thisdaylive.com
Budget: Senate settles for US$52 oil benchmark: The Senate on Tuesday settled for US$52 per barrel as the oil price benchmark for the
2015 budget proposal. This is against the US$65 per barrel the executive submitted to the National Assembly in December last year. Source:
punchng.com
35% levy on used cars will commence in June: The implementation of the 35% import levy on used cars will now begin on June 30, 2015
as the Federal Government has once again shifted the commencement date by two months. In a move to encourage local assembling of vehicles,
the government had in September 2013 raised the import tariff on fully-built cars and used vehicles from 22% to 70% made up of 35% duty and
35% levy. Source: punchng.com

4. Daily Retail Report
Page 4
Retail views
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