Monday, January 27, 2014 / Morgan Capital**

Bearish trend in the market as investors react to the hike in CRR.

Banking stocks were in the eye of the storm as the sector bore the wrath of investors in a swift reaction to the hike in CRR. The massive sell pressure cut across all the stocks in the sector irrespective of the various sizes of the Banks. The uncertainty about the various exposures of the Banks to public sector deposits heightened investor apathy for the sector.

On the flip side, bargain hunting activities continued in companies with good dividend prospects in the just concluded week. Going forward, we expect that the apathy for the Banking sector will thin out, as some of the stocks may have reached good points for investors to consider a re-entry.

We urge our subscribers to continue to invest based on the principles of sound fundamentals at good entry prices bearing in mind that in a bear market, stocks with good fundamentals have the capacity to retain value, and even when their prices crash, they are the quickest off the mark in price appreciation when the market sentiment becomes bullish.

Top 5 Nigerian Equities League for the Week commencing [27/01/2014]


Commentary

Dangote Sugar comes in at the first position on our league table. The company currently has an upside potential of 20.17% from current price to our estimate fair value. Our dividend forecast for the stock is 60K

Julius Berger comes in at number two on the log this week after the construction company shed some weight in the course of the week. The Company currently has an upside potential of 14.61% and our dividend expectation is N3.00. The Company was in the news recently when the US Justice Department charged the Company N5.1billion ($32million) for bribing Nigerian Officials to obtain and retain contracts contacts related to work for the Eastern Gas Gathering System (EGGS), a project valued at $387million. We think this may have impacted on the price given the expected cash outflow.

However, it is our opinion that the Company may have already adjusted its cash flow to reflect this position as the case has lingered for quite a while before the ruling was delivered. We therefore do not expect any huge unexpected cash outflow for 2013.

7UP makes its debut on the top5 this week, coming in at the third position on the top-5 league table. Our dividend expectation for the stock is N3.00 and our upside potential is 14% from current price

FBNH, drops to the fourth position on the log for this week with a potential upside of 7.8% from current price to our estimate fair value. Our dividend expectation for FY 2013 is N1.00 per share

Total Nigeria takes up the fifth position on the league table for this week. The stock remains well positioned in the downstream oil marketing sector despite its many challenges. Total stock has a potential upside of 9.88% from current price to our estimate fair value. Our forecast dividend for FY 2013 is N12.50



For other stocks that make up the top ten on our league table and other company specific research reports, investors can send their enquires to customercare@morgancapitalgroup.com. Our research is based purely on fundamentals and emerging verifiable information.

Kindly note that our league table is subject to change based on fluctuations of market prices and/or a review of our fair value estimates. These reviews are based on fundamentals and verifiable information coming from the companies.

Click Here to Download Full Report

Related News:
1. Top-5 Nigerian Equities League for the week commencing 6 January, 2014
2. Top-5 Nigerian Equities League for the week commencing 13 January, 2014
3. Top-5 Nigerian Equities League for the week commencing 20 January, 2014

** Disclaimer/Advice to Readers:
While the website is checked for accuracy, we are not liable for any incorrect information included. The details of this publication should not be construed as an investment advice by the author/analyst or the publishers/Proshare. Proshare Limited, its employees and analysts accept no liability for any loss arising from the use of this information. All opinions on this page/site constitute the authors best estimate judgement as of this date and are subject to change without notice. Investors should see the content of this page as one of the factors to consider in making their investment decision. We recommend that you make enquiries based on your own circumstances and, if necessary, take professional advice before entering into transactions. This article is published with the consent of the author(s) for circulation to the online investment community in accordance with the terms of usage. Further enquiries should be directed to the author whose e-mail is MorganCapital Group [research@morgancapitalgroup.com}