The Nigerian stock market continued to trade firmly on the first day of the week, with all sector indices moving higher. The banking sector index added the most points due to attractive valuations of tier-one banks. Trading activity increased significantly compared to the previous session. JP Morgan stated it is reviewing Nigeria's inclusion in its bond index due to low liquidity, which could lead to capital outflows from the local bond market. The Federal Government announced a reduction in petrol pump prices by 10 naira per liter. Lagos is expected to receive an additional 220 megawatts of power from the rehabilitation of a turbine at the Egbin power station. Air travel may be disrupted as air traffic controllers have pledged to withdraw services starting midnight

1. Retail views
UBA Q4 results
Nigeria Monday, 19 January 2015
Daily Retail Report
.
Market Review
The Nigerian Equity Market continued its firm trade on the first
trading session of the week, as it consolidates gains to keep the
ASI in positive territory. All sectoral indices under the NSE radar
moved strongly in northward direction. NSEBNK added the most
points as investors lapped on Tier-one banks that have been
trading at very attractive price levels; on the backdrop of
Nestle(4.86%), NB(5.04%) and Wapco(5%) NSECNSM and
NSEIND moved by almost three percent.
In the broad market, advancers thumped decliners 32 to 26
leaving 54 issues unchanged. Market activity level was a
significant improvement from the last session; 426million units
valued at N3.426bn represents 63% and 19% appreciation in
volume and value traded. Top worst performers were UPL(N3.81),
Cadbury(N39.90) and Champion(N6.19) while GTB(N19.68),
NB(N146) and Wapco(N79.80) led the gainers’ list.
We maintain that investors adopt long term approach to
investment decisions.
Sector Report Today(%) Month-To-Date(%) Year-To-Date(%)
NSE30 3.03 -14.68 -14.68
NSE BNK10 5.10 -14.80 -14.80
NSE CNSM10 2.90 -12.7 -12.7
NSE OILG5 0.63 -4.11 -4.11
NSE INS10 0.39 -8.44 -8.44
Market Wrap
ASI +2.54 29,773.40
Index year-to-dateE -12.78
Market Cap. N9.917Tril
Traded value 3.426Bn
Key gainers (%)
ZENITH 4.98
UACN 4.97
NESTLE 4.86
OANDO 2.94
FLOURMILL 3.82
Key losers (%)
CADBURY -5.00
STANBIC -1.49
STERLNBANK -2.44
GUINNESS -3.08
PZ -3.42
NITTY
1M 9.9590
2M 10.7822
3M 11.7114
6M 14.5132
9M 14.6496
12M 17.9782
Crude oil spot price
Brent crude US$49.52
Contact information
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2. Daily Retail Report
Page 2
Retail views
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 Hold 5.25 11.00 110% 1.60 1.90 0.35 0.80 7.10% 11.5% 22883.00 Dec.
DIAMOND BANK Buy 4.20 8.10 93% 2.00 1.70 0.30 0.60 5.40% 5.4% 14475.00 Dec.
FIDELITY BANK PLC Buy 1.34 3.00 124% 0.30 0.50 0.14 0.30 7.40% 11.6% 28974.00 Dec.
FBN HOLDINGS Hold 7.70 14.70 91% 2.20 2.30 1.10 0.80 10.00% 10.0% 32632.00 Dec.
GUARANTY TRUST BANK Buy 19.68 39.80 102% 3.20 3.30 1.45 2.20 6.90% 7.3% 29431.00 Dec.
STANBIC HOLDINGS Hold 25.12 15.50 -38% 1.90 2.60 1.20 3.10 2.70% 3.5% 10000.00 Dec.
STERLING BANK Hold 2.40 2.70 13% 0.40 0.40 0.25 0.80 10.90% 8.7% 21592.00 Dec.
SKYE BANK Hold 2.30 5.00 117% 1.20 1.10 0.30 0.30 11.10% 20.7% 13219.00 Dec.
U B A Hold 3.68 7.40 101% 1.40 1.50 0.50 0.70 10.10% 10.1% 32981.00 Dec.
ZENITH BANK Buy 17.30 31.50 82% 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 5.28 Under review N/A 0.89 1.20 0.60 4.70 7.40% 7.4% 12000.00 Dec.
CADBURY NIG. Under review 39.90 Under review N/A 2.90 3.20 1.30 7.60 0.00% 4.7% 1878.00 Dec.
FLOUR MILLS Hold 37.00 54.80 48% 2.90 3.50 1.60 8.90 3.30% 4.0% 2385.00 Mar.
HONEYWELL FLOURMILLS Buy 3.00 5.20 73% 0.40 0.30 0.17 12.00 5.70% 4.7% 7930.00 Mar.
NESTLE FOODS NIG. Hold 855.00 821.80 -4% 28.10 31.30 24.00 24.90 2.60% 3.0% 792.00 Dec.
P Z INDUSTRIES Hold 25.11 34.60 38% 1.20 1.30 0.19 7.80 2.70% 3.0% 3970.00 May
U A C N Buy 32.52 72.60 123% 2.90 3.60 1.75 5.40 4.00% 4.7% 1920.00 Dec.
UNILEVER NIGERIA PLC Sell 32.80 31.80 -3% 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 79.80 Under review N/A 9.40 9.40 3.30 8.20 3.30% 3.3% 3001.00 Mar.
DANGOTE CEMENT Buy 156.00 258.50 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 126.00 111.00 -12% 7.90 5.90 7.00 14.50 4.30% 3.0% 1506.00 June
INTERNATIONAL BREWERIES Hold 21.89 24.50 12% 0.90 1.30 0.30 16.20 1.00% 1.5% 3263.00 Mar.
NIGERIAN BREWERIES Sell 146.00 121.20 -17% 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 25.46 41.50 63% 2.20 3.00 1.00 9.00 3.20% 6.7% 953.00 Dec.
PRESCO PLC Buy 29.70 42.70 44% 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
Local currency bonds - Outflows could result from JP Morgan’s review of its bond index
JP Morgan stated on Friday that it is reviewing its October 2012 inclusion of Nigerian local currency bonds in its GBI-EM index. We believe this
could lead to outflows from the Federal Government of Nigeria bond market.
JP Morgan on Friday said it had placed Nigeria on negative index watch on its Government Bond Index (GBI-EM). In a notice sent to clients the
bank said the lack of liquidity made it difficult for foreign investors to replicate the benchmark, and it would assess Nigeria's suitability to remain
in the index over the next three to five months. Following the announcement, the naira declined about 150bps before reversing losses and yields
on short duration bonds rose about 80bps as high as 15.90%.
This decision comes after regulatory measures introduced by the Central Bank of Nigeria (CBN) in December restricting liquidity in Nigeria’s spot
FX and local treasury bond market. The CBN on 17 December reduced the maximum permitted net open position (NOP) in Fx of deposit money
banks to 0.0% (from 1.0%) of shareholders’ funds, before subsequently revising it to 0.1% in January. Turnover in the Federal Government of
Nigeria (FGN) bond market since the announcement has declined to a daily average of N24bn (U$127m) from N48bn (U$259.5m) in November.
Among the 31 developing nations in the index during the period, Nigerian bonds were the second worst performers after Russia. The average yields
on naira government debt have increased by 250bps in the past three months.
The Nigerian bonds included in the JP Morgan index are the 2014, 2019 and 2022 benchmark bonds, which were added in October 2012,
attracting up to $1.5 billion in portfolio inflows, and the 2024 benchmark bond was included in August 2015. The Nigerian bonds constitute 1.8%
of the JP Morgan GBI-EM Index. In our view, removal from the index could drive funds tracking it to sell Nigerian bonds, potentially resulting in
significant capital outflows. New issues of government debt will likely be offered at a coupon higher than the marginal rates at the last issue.
News Headlines
Petrol now N87 per litre – FG: The Federal Government on Sunday announced a reduction in the pump price of petrol by N10 from N97 to N87
per litre. The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, announced the reduction while briefing State House correspondents
at the Presidential Villa, Abuja. Alison-Madueke said the reduction, which took immediate effect, was because of the recent drastic fall in the
prices of crude oil in the international market. Source: punchng.com
Power: Lagos to get extra 220MW from Egbin: Lagos is expected to experience a substantial improvement in power supply following the
rehabilitation of a 220MW steam turbine generator at the Egbin power station. The repair is coming eight years after the system had become
inoperable. A statement by Egbin Power plc on Sunday said the rehabilitation had brought the plant back to its installed capacity of 1,320MW.
Source: punchng.com
Air travel may stall as traffic controllers threaten to down tools: Air travel within Nigeria may stall beginning today, as all Air Traffic
Controllers (ATC) in the employ of Nigerian Airspace Management Agency (NAMA) pledged to withdraw their services to local and foreign airlines
starting mid-night yesterday (Sunday). Source: businessdayonline.com

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