GTI financial possibilities Do you want good returns on your investment portfolio? Do you want to take

GTI Research GTI …financial possibilities Do you want good returns on your investment portfolio? Do you want to take advantage of the opportunitie...
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GTI Research

GTI

…financial

possibilities

Do you want good returns on your investment portfolio? Do you want to take advantage of the opportunities in the capital market? Then

Discretionary - Portfolio Asset Management Service (DPAMS)

by GTI Securities is for you

DPAMS, Helping you take advantage of opportunities in the capital market here and abroad

Dear Investor, Good Morning and Happy New Month. The market recorded gains in the last two trading sessions of the just concluded trading week to spice up an otherwise gloomy week. The market still comprises largely retail investors who are more interested in short term profit taking which accounts for the high volatility in the market. A lot still rides on the shoulders of fiscal policy administrators for the market to rebound and achieve its full growth potentials. Our Stock picks are based on emerging opportunities in the foreseeable future (12Months). We acknowledge the economic challenges ranging from the soft crude oil prices which has ultimately plunged the economy into a recession, as well as the its impact on foreign exchange volatility which has seen the Naira crash to an all-time low. We are however optimistic that despite these challenges, the stocks that we have recommended are stocks with strong fundamentals and are well positioned to benefit from an economic resurgence in 2017. We expect that 2017 will be a better year for the capital market with new listings and renewed interest from Foreign Portfolio Investors who are already looking at opportunities in emerging markets as a result of the spate of uncertain political climate in both the UK (BREXIT) and the US (Trump Presidency). Also the new oil deal is expected to see crude oil prices rise significantly from current levels. We also expect some pass through effect of intervention policies by the Federal Government in the local economy to manifest in 2017. Overall, we are optimistic that 2017 will be a better year for the economy and our stock picks mirrors the trigger points for an economic rebound. For all your estate account challenges, Investment advisory, and research support, please send your enquiries to [email protected]. If you would require any help to ensure that your portfolio is positively aligned, or any enquiry on your portfolio, please send an email to [email protected] or to [email protected] Chuks Anyanwu Head, Research and Strategy

GTI Research

GTI Research

Market Review The Nigerian equity market on Friday gained 1.88% to extend uptrend to the third day in a row. Lately, the market has shown a buying momentum. This was equally depicted today with volume of transactions as high as 576.85 million. In summary, lead indicator, the All-Share Index (ASI) gained 475.75 absolute points, representing a growth of 1.88% to close at 25,740.83 points. Similarly, the Market Capitalization gained N163.66 billion, representing a growth of 1.88% to close at N8.86 trillion. The upturn was largely boosted by value depreciation recorded in some medium and large capitalized stocks, amongst which are; Mobil Oil (+10.25%), Forte Oil (+10.24%), Dangote Cement (+3.90%), GT Bank (+3.03%), Zenith Bank (+1.61%), Nestle Nigeria (+1.23%) and GSK Nigeria (+1.07%). MARKET STATISTICS- December 02, 2016

YTD: -10.13%

Cap (N)

8,855,113,806,377.24

One Day(ASI CHG)

1.88%

Index

25,740.83

One Week(ASI CHG)

1.61%

Volume

576,852,121

One Month(ASI CHG)

-5.44%

Value (N)

1,348,829,538.97

Six Months(ASI CHG)

-5.31%

Deals

2,258

52 Weeks(ASI CHG)

-5.67%

Gainers

24

Losers

13

Un-Changed

49

Total

86

Source: GTI Research

GTI Research

GTI Research

GTI 5 WEEKLY STOCK PICK FOR THE PERIOD 12/05/2016 - 12/12/201 Zenith Bank Plc

Zenith Bank: Despite the challenges in the Nigerian financial N22.02

Target Price

services sector, with rising loan loss provisions as a result of their exposure to the oil and gas sector as well as the potentially toxic

Investment Horizon

power sector, doubts about asset quality and weakening CAR, we

12.Months

the strongest CAR’s in the sector and continues to leverage on its

Statistics Financial Services N14.03

Industry Price (N)

still see opportunities in the tier one banks. Zenith bank has one of stringent risk assessment framework to mitigate capital erosion. The Bank’s balance sheet size is a major incentive for us at this time because we believe that its size/liquidity is a competitive edge in an economy awash with opportunities like the Nigerian economy.

Shares Outstanding (Mn) Symbol Expected Return 52Week High 52Week Low YTD

31,396 ZENITH 56.95% N18.05 N8.83 -1.78%

The bank also has strong brand acceptability and a wide branch spread.

Dangote Cement:

Dangote Cement Plc

Dangote Cement is Africa's leading

cement producer with three plants in Nigeria and plans to

N230.20

Target Price

expand into 13 other African countries. The Group is a fully integrated quarry-to-customer producer with production

Investment Horizon

12.Months

capacity of 29 million tonnes in Nigeria and new operations set to begin across the rest of Sub-Saharan Africa. The Group plans to have 42 million tonnes capacity by the end of 2016 and 50-60

Statistics Industrial Goods N160.00

Industry Price (N)

million tonnes of production, grinding and import capacity in Sub-Saharan Africa by 2016. Dangote Cement's Obajana plant in Kogi State, Nigeria, is the largest in Africa with 13 million tonnes capacity across four lines. The Ibese plant in Ogun State

Shares Outstanding (Mn)

17,040

has four cement lines with a combined installed capacity of 12

Symbol Expected Return 52Week High 52Week Low

DANGCEM 43.87% N203.96 N122.90

million tonnes. The Gboko plant in Benue State has 4 million

YTD

-5.89%

countries.

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tonnes capacity. Over time, Dangote Cement has eliminated Nigeria's dependence on imported cement and is transforming the nation into an exporter of the product serving neighboring

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Okomu Oil Palm Plc

Okomu OilPalm: Currently stands as one of the lead quoted firm operating in the agricultural sector. Its operations primarily covers oil palm and rubber production, extraction

Target Price

49.50

and processing. With the increasing efforts by the government

Investment Horizon

12 Months

to boost activities in the agricultural sector in order to provide effective diversification of the economy from oil, the company

Statistics

is well positioned to benefit from this. Towards this goal, it

Industry

Agriculture

recently acquired 11,400 hectares of land with a plan to

Price (N)

38.01

establish 10,000 hectares of oil palm plantation on it within the

Shares Outstanding (Mn)

0.954

Symbol

OKOMU

also been increased to 100 metric tonnes per day, while its

Expected Return

30.23%

fractionation plant capacity and refined products capacity

52-Week High

47.00

have both increased to 60 tonnes per day. Okomu refining and

52-Week Low

26.90

YTD

13.91%

next 3 years. This is expected to lead to a doubling of its Crude Palm Oil (CPO) output. The Company’s refinery capacity has

oil mill expansion initiatives will enable the company alleviate the local palm oil production shortage and in turn acquire a greater share of the Nigeria market

Total Nigeria N320.00

Target Price Investment Horizon

12 Months

Oil & Gas N250.80

Price (N) Shares Outstanding (Mn) Symbol Expected return 52Week High 52Week Low YTD

GTI Research

gas companies in the Nigerian oil sector. The company is one of the largest in terms of retail outlets across the country and leverages on these outlets to push sales volume. The

Statistics Industry

Total Nigeria: Total Nigeria is one of the foremost oil and

339.52m TOTAL 27.59% N345.00 N137.75 97.26%

company has also benefitted from the deregulation of the downstream sector where it operates as a result of its retail presence in the volume driven oil marketing space. The company pays consistent dividend and is a firm pick with PFA’s and FPI’s .The strong growth in its 9M-2016 revenue and PAT has heightened expectation for a strong dividend payment when FY 2016 numbers are released.

GTI Research

GT Bank despite the sector wide challenges, GT Banks

Guaranty Trust Bank

makes our recommendation for its astute cost management

N27.21

Target Price Investment Horizon

12.Months

Price (N) Shares Outstanding (Mn) Symbol Expected Return 52Week High 52Week Low YTD

optimization.

Financial Services N23.49 29,431 GUARANTY 15.83% N27.67 N13.16 19.17%

The bank is also known for pushing new

frontiers in bank service delivery through effective use of ICT.

Statistics Industry

strategy and proactive balance-sheet deployment and

This gives the bank an edge in a competitive

homogeneous market and gives it wider reach and a large share of the millennial population. The Bank also has a healthy balance sheet size and liquidity to take advantage of the opportunities arising from the unfolding Nigerian economy and in addition to this, the rich dividend history makes the bank a top pick when FPI’s and local PFA’s decide to re-enter the market.

Watch List UBA, Presco, Nestle, Dangote Sugar, Julius Berger

Disclaimer This report by GTI Securities Ltd is for information purposes only. While opinions and estimates therein have been carefully prepared, the company and its employees do not guaranty the complete accuracy of the information contained herewith as information was also gathered from various sources believed to be reliable and accurate at the time of this report. We do not take responsibility therefore for any loss arising from the use of the information. For enquires/research queries, please send an email to [email protected]

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