Stock Recommendation for the Week, February 17

The Nigerian equities market maintained a downward trend with the ASI, dropping by 1.11% to 27,755.9 pts, with the market capitalization closing at N14.46 trillion as investors lost N162 billion during the prior week. All sectors closed negative WoW except Cement (+0.37%) and Construction (+0.13%). The deterioration was driven by the Food (-7.27%), Brewers (-2.02%), Oil & Gas (-1.34%), Insurance (-0.94%), Telecoms (-0.53%) and Banking (-0.21%) sectors. The key losers are NESTLE (-10.00%), DANGSUGA (-4.10%), GUINNESS (-16.56%) and MTNN (-0.85%), while GTB (+1.36%), BUA CEMENT (+1.13%) and WAPCO (+1.31%) yielded positive returns.

• Dangcem– STRONG BUY (FVE: N240.87): DANGCEM’s FY 19 earnings is expected to be pressured (EPS: N14, vs N22 in 2018) owing to lower volumes in Nigeria business (due to increased competition from BUA Cement) and some of its Pan Africa business, as well as high base of tax credits from 2018. However, DANGCEM currently trades at FY 19E P/E of 11x on our estimates, which is cheap compared to WAPCO and CCNN of 17.7x and 16.8x, respectively. We believe current valuation is unjustified given the superior ROE of 24%.

• Zenith Bank Plc – STRONG BUY (FVE: N31.50): Zenith bank 9M results saw a moderate expansion in PBT and PAT by 5.3% and 4.5% YoY respectively. We note however, that the banks valuation may remain depressed in the near-term given the regulatory overhang over the industry. Nonetheless, at current levels and based on our FY 19E dividend of N2.90, we view expected dividend yield of 15% as attractive and could be compelling to investors. We value Zenith at N31.50 which implies STRONG BUY by our recommendation.

• Guaranty Trust Bank Plc – STRONG BUY (FVE: N49.66): GTB’s 9M 19 earnings expanded modestly with PAT and EPS expanding only 3.4% YoY to N146.9 billion and N4.99/share respectively. Although we expect slower growth in EPS (+4% YoY to N6.53) over 2019, our case for GUARANTY remains the resilience in NIR, improved cost management, still strong loan book with moderate expansion in credit loss provision to 0.5%.

• Nestle Plc – OVERWEIGHT (FVE: N1447.39): Amongst the food producers, Nestle Nigeria Plc has managed to stay afloat, reporting modest growth in earnings amidst incessant competition. For 9M 19, EPS expanded by 11.2% YoY to N46.48 driven largely by the absence of impairment charges which created a high base for input costs over the same period last year. Asides from improved earnings, its strong cash balance, return on equity and 100% dividend payout further supports the case for an OVERWEIGHT rating.

• Seplat Plc – STRONG BUY (FVE: N828.90): Seplat’s total production declined in Q3 19, as the drop in gas production offset improvement in the oil segment. That said, we remain positive on growth in production (especially in oil) into 2020 as Seplat increases capex. Cashflows remain healthy. Upsides reside in the ANOH Gas project and acquisition of Eland Oil & Gas Limited, while decline in oil prices pose a threat to our estimates.

See attached for full report.

Kindly, visit ARM Research Portal for full stock reports.

Stock Recommendation for the Week, February 10

Last week, the Nigerian bourse witnessed a steep decline as the ASI closed -2.69% WoW, while market capitalization lost N239 billion to close at N14.62 trillion. All sectors closed in red, save the insurance sector (+0.15%). The decline was anchored by the Breweries (-5.62%), Cement (-4.94%), Banking (-2.26%), Oil & Gas (-5.74%), and Telecom (-1.48%) sectors. On stock performance, FBNH (-8.40%), ZENITH (-5.04%), NB (-6.36%), INTBREW (-5.56%), DANGCEM (-5.50%), BUACEMENT (-4.32%) and MTNN (-2.17%) yielded negative returns amongst other stocks.

• Dangcem– STRONG BUY (FVE: N240.87): DANGCEM’s FY 19 earnings is expected to be pressured (EPS: N14, vs N22 in 2018) owing to lower volumes in Nigeria business (due to increased competition from BUA Cement) and some of its Pan Africa business, as well as high base of tax credits from 2018. However, DANGCEM currently trades at FY 19E P/E of 11x on our estimates, which is cheap compared to WAPCO and CCNN of 17.7x and 16.8x, respectively. We believe current valuation is unjustified given the superior ROE of 24%.

• Zenith Bank Plc – STRONG BUY (FVE: N31.50): We have made adjustment to our FY 2019 expectation for Zenith Bank following some surprises in the Q2 numbers. In specifics, we revised net interest income lower due to compressed yields on its loans and treasury asset (H1 18:10.6%, H1 19 9.1%) amidst contraction in funding cost. Elsewhere, we adjusted NIR higher due to upward review of electronic fee income and trading book. Thus, we now forecast PBT of N218 billion (-5.5% YoY), while we cut our FVE to N31.57/share (previously: N33.71/share).

• Guaranty Trust Bank Plc – STRONG BUY (FVE: N49.66): GTB’s 9M 19 earnings expanded modestly with PAT and EPS expanding only 3.4% YoY to N146.9 billion and N4.99/share respectively. Although, we expect a slower growth in EPS (+4% YoY to N6.53) over 2019, our case for GUARANTY remains the resilience in NIR, improved cost management, still strong loan book with a moderate expansion in credit loss provision to 0.5%.

• Nigerian Breweries Plc – STRONG BUY (FVE: N75.82): With intense competition from International Breweries (IB) and graduated excise duty (+17% YoY) that kicked-off in Jan-19, revenue growth is expected to be slow even as we expect higher finance cost (+38% YoY) to be another pressure point to earnings this year. However, given our case for a slight improvement in volumes and decline in cost of sales (-1.1% YoY) which translates to gross (+120bps YoY) and EBIT (+101bps YoY) margin expansion, the misery seems moderated. Overall, the net impact of all our adjustments translates to PBT of N29.9 billion and EPS of N2.58 (+6.3% YoY) over 2019.

• Seplat Plc – STRONG BUY (FVE: N828.90): Seplat’s total production declined in Q3 19, as the drop in gas production offset improvement in the oil segment. That said, we remain positive on growth in production going into the final quarter of the year (especially in oil) and into 2020 as Seplat increases capex. Cashflows remain healthy. Upsides reside in the ANOH Gas project and acquisition of Eland Oil & Gas Limited.

Kindly, visit ARM Research Portal for full stock reports.

Stock Recommendation for the Week, February 03

For the first time this year, the equity market closed the prior week on a negative note with the NSE ASI declining by 2.65% to 28,843.53 index points. Loses were observed in the Banking (-6.13%), Cement (-0.90%), Telecom (-2.96%), Personal Care (-13.72%), Food (-0.50%), Oil & Gas (-2.58), and Real Estate (-0.14%) sectors. On the other hand, gains were seen across only the Brewers (4.89%), Construction (2.64%) and Insurance (0.54%) sectors. Major drivers for the week decline were stocks such as; FBNH (-10.27% WoW), STANBIC (-10% WoW), BUACEMENT (-2.12% WoW) and MTNN (-4.32% WoW).

• Dangcem– STRONG BUY (FVE: N240.87): DANGCEM’s FY 19 earnings is expected to be pressured (EPS: N14, vs N22 in 2018) owing to lower volumes in Nigeria business (due to increased competition from BUA Cement) and some of its Pan Africa business, as well as high base of tax credits from 2018. However, DANGCEM currently trades at FY 19E P/E of 11x on our estimates, which is cheap compared to WAPCO and CCNN of 17.7x and 16.8x, respectively. We believe current valuation is unjustified given the superior ROE of 24%.

• Zenith Bank Plc – STRONG BUY (FVE: N31.50): We have made adjustment to our FY 2019 expectation for Zenith Bank following some surprises in the Q2 numbers. In specifics, we revised net interest income lower due to compressed yields on its loans and treasury asset (H1 18:10.6%, H1 19 9.1%) amidst contraction in funding cost. Elsewhere, we adjusted NIR higher due to upward review of electronic fee income and trading book. Thus, we now forecast PBT of N218 billion (-5.5% YoY), while we cut our FVE to N31.57/share (previously: N33.71/share).

• Guaranty Trust Bank Plc – STRONG BUY (FVE: N49.66): GTB’s 9M 19 earnings expanded modestly with PAT and EPS expanding only 3.4% YoY to N146.9 billion and N4.99/share respectively. Although, we expect a slower growth in EPS (+4% YoY to N6.53) over 2019, our case for GUARANTY remains the resilience in NIR, improved cost management, still strong loan book with a moderate expansion in credit loss provision to 0.5%.

• Nigerian Breweries Plc – STRONG BUY (FVE: N75.82): Intense competition from International Breweries (IB) and graduated excise duty (+17% YoY) that kicked-off in Jan-19, revenue growth is expected to be slow even as we expect higher finance cost (+38% YoY) to be another pressure point to earnings this year. However, given our case for a slight improvement in volumes and decline in cost of sales (-1.1% YoY) which translates to gross (+120bps YoY) and EBIT (+101bps YoY) margin expansion, the misery seems moderated. Overall, the net impact of all our adjustments translates to PBT of N29.9 billion and EPS of N2.58 (+6.3% YoY) over 2019.

• Seplat Plc – STRONG BUY (FVE: N828.90): Seplat’s total production declined in Q3 19, as the drop in gas production offset improvement in the oil segment. That said, we remain positive on growth in production going into the final quarter of the year (especially in oil) and into 2020 as Seplat increases capex. Cashflows remain healthy. Upsides reside in the ANOH Gas project and acquisition of Eland Oil & Gas Limited.

Kindly, visit ARM Research Portal for full stock reports.

ASK SHADE: Help! My husband buys assets in his name alone

ASK SHADE: Help! My husband buys assets in his name alone

Dear Shade,

My husband wants me to include his name on the documents of the properties I bought before we got married. I refused to. Now, he buys assets in his name only saying I started it first. What do I do? Should I ignore him? Or would you advise me to start buying my own assets in my name only or heed to his request for peace to reign? I’m confused.

Joy from Jos.

 

Dear Joy,

I appreciate you reaching out to me on this rather personal and sensitive subject.

Couples are at liberty to purchase property either individually or jointly, but it may be advisable to evaluate one’s matrimonial situation critically before making decisions on whether to purchase assets in one’s personal name or as joint owners with one’s spouse.

It is not an abominable act for spouses to purchase assets in their personal names. In Nigeria, the purchase of assets jointly by spouses could be interpreted to symbolize unity and synergy within a marriage and could increase the bond between spouses, thereby making them feel relevant to the other spouse.

Joint ownership of assets may also be considered as an estate planning option for many spouses, given that the surviving owner eventually ends up owning the asset, which may be utilized to catering for expenses as the need may arise, rather than having the assets frozen and unreachable. However, it is important to bear in mind that in the event of a simultaneous demise of both spouses, distribution of the jointly owned properties would be subjected to intestacy laws and may not reflect the true intentions of the owners.

I would therefore advise that you discuss your options with your husband and enlighten him on the estate planning benefit of joint ownership and the dangers of having sole ownership as the only plan. Other Estate planning tools such as Wills and Trust may be used to further secure a solid estate plan.

I do hope that I have been able to be of help to ease your concerns and I wish you all the very best in your marriage.

 

Cheers!

‘Shade

The post ASK SHADE: Help! My husband buys assets in his name alone appeared first on Realising Ambitions.

5 life facts to remember

Life is an adventure that is meant to be lived and enjoyed! Yet, there are many dos and don’ts peddled around as a manual to life but there are a few pointers about life that we’ll like to reiterate even as you begin the journey of a fresh year and decade. Here we go…

Life is for the living

The pressures of life and the high demands we place on ourselves often force us to worry too much that we stress and burn out fast. The moment you truly understand that only those who are alive get to enjoy life, you’ll let go of the toxic emotions that steal your joy and peace of mind – and then you can enjoy life.

Life has a fair share of bad people disguised as good

It’s possible to trust that friend who will betray you tomorrow, or that spouse who may leave you one day – or even that sibling who will not cater to your family in case the unexpected happens. While lots of good people exist and you can take definitive measures to identify those within your circle who you can trust, it is imperative to not take chances especially if you have dependents. Secure their interest with an Easy Will.

Life can get tough

Even the strongest and richest of them all gets kicked tough by life in some way, at some point in time. Understanding this basic principle of life lets you absorb the shock when life gets tough and helps you understand the importance of having an emergency fund in place for the ones you love so that when life gets tough, there is a cushion to help them absorb it.

Life is fleeting

Nobody likes the thought of demise but it is one life phenomenon that we can do absolutely nothing about. It is even trickier because no one knows when it will be their time. Some people have been called before they even attained adulthood. Some others never had the chance to get married or even have children. Yet there are some who an entire family depended on and when they were taken, the world fell apart for their families because rats came and stole the fish meant for the children. That is why if you have children, putting an Education plan in place is the best way to secure their future.

There’s life after retirement

Many of us live for now, spending all we labour hard to get on momentary needs. We forget that we’ll one day retire and life continues even then. How comfortable life gets upon retirement is however dependent on the plans you place today against tomorrow. Live life today but don’t forget to save for retirement by constantly making Additional Voluntary Contributions to your Retirement Savings Account.

In conclusion…

At ARM, it’s our duty to make life easier to handle by providing you with all the products to plan your life at every stage that matters.

Explore our webshop at www.arminvestmentcenter.com to find a buffer for whatever stage of life you’re currently in.

 

4 reasons to get a life insurance policy

The topic of getting life insurance is one you may not want to talk about. But because it is important that you ensure the financial security of people that depend on you, it is worth dealing with.

First, let us break down why you need one.

If you’re a breadwinner, you need a life insurance

Let’s be real, if you are the main financial backbone in your family and anything happens to you, your partner, children and anybody else that depends on you, will probably suffer financially. This is one of the major reasons people get life cover; to ensure a safety net for their loved ones in the face of unforeseen circumstances. With the rising cost of education, you can ensure that your kids will still be able to get the education they deserve should the worst happen.

It is not anticipating bad omen. It is simply facing reality and planning for it.

Got loans?

This is one that you might not have thought about. What becomes of your family if you have taken a loan or got a mortgage and something happens to you and there is no one to pay it off? Proceeds from your life insurance policy can be used to settle these loans ensuring that if the worst happens, your family doesn’t have an additional debt to deal with.

Single but responsible

Now, being single doesn’t mean you don’t have anyone that depends on you financially. It could be an elderly parent, sibling or relative. Having a life cover will make sure that these people you care about will be taken care of regardless of your presence, giving you and them peace of mind.

If you need to take care of future medical expenses

If you can’t predict the future, then you never know what may happen. A life protection plan comes in handy in the event of injuries, accidents or terminal illnesses which may prevent you from working. It saves you and your loved ones from unplanned and expensive medical bills.

While life insurance protects your family in the event of uncertainty, there are also lots of other benefits to getting one. Haven’t already taken out a life insurance? It’s not late.

Get in touch with us today via [email protected] to discuss your options.

4 reasons to get a life insurance policy this 2020

4 reasons to get a life insurance policy this 2020

The topic of getting life insurance is one you may not want to talk about. But because it is important that you ensure the financial security of people that depend on you, it is worth dealing with.

First, let us break down why you need one.

If you’re a breadwinner, you need a life insurance

Let’s be real, if you are the main financial backbone in your family and anything happens to you, your partner, children and anybody else that depends on you, will probably suffer financially. This is one of the major reasons people get life cover; to ensure a safety net for their loved ones in the face of unforeseen circumstances. With the rising cost of education, you can ensure that your kids will still be able to get the education they deserve should the worst happen.

It is not anticipating bad omen. It is simply facing reality and planning for it.

Got loans?

This is one that you might not have thought about. What becomes of your family if you have taken a loan or got a mortgage and something happens to you and there is no one to pay it off? Proceeds from your life insurance policy can be used to settle these loans ensuring that if the worst happens, your family doesn’t have an additional debt to deal with.

Single but responsible

Now, being single doesn’t mean you don’t have anyone that depends on you financially. It could be an elderly parent, sibling or relative. Having a life cover will make sure that these people you care about will be taken care of regardless of your presence, giving you and them peace of mind.

If you need to take care of future medical expenses

If you can’t predict the future, then you never know what may happen. A life protection plan comes in handy in the event of injuries, accidents or terminal illnesses which may prevent you from working. It saves you and your loved ones from unplanned and expensive medical bills.

While life insurance protects your family in the event of uncertainty, there are also lots of other benefits to getting one. Haven’t already taken out a life insurance? It’s not late.

Get in touch with us today via [email protected] to discuss your options.

The post 4 reasons to get a life insurance policy this 2020 appeared first on Realising Ambitions.

2020 expenses: Which has your name on it?

Some things remain constant with each year while some new situations welcome themselves regardless of our level of preparedness. Here are some things that will likely gulp your money in 2020 apart from your daily home expenses.

School fees – If you’re a parent, you must know that you will pay school fees thrice this year. The last one in September being of a bigger sum because your child will be entering a new class which will demand some financial responsibilities. Start now to plan and save for it.

Valentine’s Day – February still has 14th on it and the world will mark Valentine’s Day. Unless you don’t believe in Valentine’s day (which is fine) you’ll be spending some money this season

New baby – If you’re expecting a 2020 baby, then you must be prepared for the expenses that come with buying baby items, paying hospital bills and the general wellbeing of the child. Also, it’s important not to forget that you could be enrolling this new baby into school by the end of next year, making now the perfect time to start saving towards that big step.

Easter, Christmas and Eid celebrations – Whether Christian or Muslim, you will be marking these special seasons in 2020 and they will require some expenses. Knowing and planning is the surest way to have a joyous celebration without going broke afterwards.

Special birthdays – Be it that of your spouse, child, friend, parent or relatives – birthdays are those celebrations that we don’t count but often leave a hole in our pockets if we don’t budget for them.

Rent – This is an inevitable expense unless you currently live in your own home (without mortgage expenses) . Plan for it as well.

Major milestones – If this is the year you plan to get married, enroll for further certifications, put a down payment on your first home or buy your first car amongst other major milestones; then it is an inevitable expense for you – one that requires planning. The first month of the year is the right time to start planning towards these big steps and the best investment vehicle is your best option to being financially prepared for them.

The unexpected – Emergency car breakdown, hospital bills, last-minute travel expenses, home repairs… name it. Because you know that life can throw you an unexpected curveball at any point, it is wise you have an emergency fund somewhere for the just-in-case moment.

You may not be sure what 2020 will bring, but planning for it will make the seemingly difficult times easier.

Meet all your 2020 expenses by investing towards them starting now. Check out investment options at www.arminvestmentcenter.com

Stock Recommendation for the Week, January 13

The bullish sentiments continued last week as the NSE ASI gained 9.07% WoW to close at 29,415.39pts while market capitalization advanced significantly by N2.2 trillion. The boost in market capitalization was largely fuelled by the listing of BUA Cement Plc on the NSE. Precisely, it listed 33.86 billion ordinary shares at N35 per share, making it the third largest company on the bourse. On sectoral performance, gains were seen across Cement (+20.59%), Banking (+8.58%), Telecom (+4.37%), Food (+1.59%) and insurance (+0.47%) transcending losses in the Brewers (-0.17%), Personal care (-5.21%) and Oil & Gas (-0.44%) segments. A further probe revealed gains in DANGCEM (+21.13%), MTNN (+6.42%), FBNH (+15.91%), ACCESS (+6.40%), GUARANTY (+6.15%), UBA (+12.00%), ZENITH (+13.51%), and DANGSUGA (+5.63%) amongst other stocks.

• Dangcem– STRONG BUY (FVE: N240.87): DANGCEM’s FY 19 earnings is expected to be pressured (EPS: N14, vs N22 in 2018) owing to lower volumes in Nigeria business (due to increased competition from BUA Cement) and some of its Pan Africa business, as well as high base of tax credits from 2018. However, DANGCEM currently trades at FY 19E P/E of 11x on our estimates, which is cheap compared to WAPCO and CCNN of 17.7x and 16.8x, respectively. We believe current valuation is unjustified given the superior ROE of 24%.

• Zenith Bank Plc – STRONG BUY (FVE: N31.50): We have made adjustment to our FY 2019 expectation for Zenith Bank following some surprises in the Q2 numbers. In specifics, we revised net interest income lower due to compressed yields on its loans and treasury asset (H1 18:10.6%, H1 19 9.1%) amidst contraction in funding cost. Elsewhere, we adjusted NIR higher due to upward review of electronic fee income and trading book. Thus, we now forecast PBT of N218 billion (-5.5% YoY), while we cut our FVE to N31.57/share (previously: N33.71/share).

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• Guaranty Trust Bank Plc – STRONG BUY (FVE: N49.66): GTB’s 9M 19 earnings expanded modestly with PAT and EPS expanding only 3.4% YoY to N146.9 billion and N4.99/share respectively. Although, we expect a slower growth in EPS (+4% YoY to N6.53) over 2019, our case for GUARANTY remains the resilience in NIR, improved cost management, still strong loan book with a moderate expansion in credit loss provision to 0.5%.

• Nigerian Breweries Plc – STRONG BUY (FVE: N75.82): Intense competition from International Breweries (IB) and graduated excise duty (+17% YoY) that kicked-off in Jan-19, revenue growth is expected to be slow even as we expect higher finance cost (+38% YoY) to be another pressure point to earnings this year. However, given our case for a slight improvement in volumes and decline in cost of sales (-1.1% YoY) which translates to gross (+120bps YoY) and EBIT (+101bps YoY) margin expansion, the misery seems moderated. Overall, the net impact of all our adjustments translates to PBT of N29.9 billion and EPS of N2.58 (+6.3% YoY) over 2019.

• Seplat Plc – STRONG BUY (FVE: N828.90): Seplat’s total production declined in Q3 19, as the drop in gas production offset improvement in the oil segment. That said, we remain positive on growth in production going into the final quarter of the year (especially in oil) and into 2020 as Seplat increases capex. Cashflows remain healthy. Upsides reside in the ANOH Gas project and acquisition of Eland Oil & Gas Limited.

Kindly, visit ARM Research Portal for full stock reports.

6 Life-saving Tips for Harmattan

Yaay! It’s January, that time of the year that always comes with the joy of giving, bright lights, shiny presents, and loads of food. It is also a time that comes with cold, dry winds, haziness and a lot of dust. Harmattan is coming and these are six life-saving tips to help you stay productive and healthy regardless of the season.

WOOL FOR THE WIN

It is always cold during harmattan and to protect yourself from the cold, you should wear more wool-based cloths as against cotton which is common and mostly suitable for other seasons.

BUILD YOUR IMMUNE SYSTEM THIS SEASON

It is necessary to eat a healthy and balanced diet to help your body fight against diseases that might occur as a result of the weather condition. A proper diet containing protein, carbohydrates, a bit of fat and vitamins, helps to make the immune system stronger to better fight infections. Hydrate regularly by taking lots of water during this dry season.

BODY CARE

To avoid excessive dryness of the skin and hair, bathe with moisture retaining soaps and thereafter regularly apply moisturizing creams, oils or lotions. Hand creams should also be used intermittently during the day and at bedtime.

Protect your lips with lip balms, gloss or chap sticks to avoid lip cracks, peeling and dryness. Also moisturize your lips at night time for a complete save from cracks.

Also avoid burning refuse and bushes this period. The fire could become uncontrollable and result in the loss of lives and valuable properties.

HOME CARE

Your home and its surroundings should be made as clean and as dust-free as possible. Doors and windows should always be shut to avoid letting in dust and harmful bugs. Inflammable objects like petrol, gas, wood and alcohol should also be put away and preventive measures taken to avoid fire outbreaks as this season makes it easy for intense fire accidents.
Also avoid burning refuse and bushes this period. The fire could become uncontrollable and result in the loss of lives and valuable properties.

GOOD HEALTH IS GOOD LIFE

Excessive exposure to the cold and dryness that comes with this weather can increase the risk of illnesses like pneumonia, arthritis and rheumatism. This season also causes catarrh, sore throat, sneezing and the possibility of cough so it is best to curtail exposure to the dry winds and dust. The eyes should be washed with clean water and sunshades used to protect them from particles. Asthma patients should also make sure to have their inhalers close at all times.

DRIVE FOR THE WEATHER

Driving this harmattan season calls for care. Be it in the morning or at night, it is important to see and be seen. It is typically foggy in the mornings, ensure your fog lights (if your car doesn’t have these, use low beam lights) are on. Also remember not to drive fast to stay safe on the road.

These are basic tips for protecting yourself and your loved ones from the adverse effects of this weather condition. Can you imagine the other natural forces you could also protect them from with a Protection Plan?

At ARM LIFE, we do more than just protect you; we make sure you can access life assurance benefits while you are alive.