Tier 1 banks, Dangote Cement, Lafarge, Nestle top analysts stock picks

Financial analysts tracking companies listed on the Nigerian Stock Exchange (NSE) have top on their “buy” recommendation list for the second quarter, tier 1 bank stocks, as well as the stocks of top capitalised firms in the non-banking sector.

Some of the stocks that are re-occuring in the ‘Buy’, ‘Hold’ recommendations of top analysts tracked by BusinessDay, are those of Guaranty Trust Bank Plc, Zenith Bank Plc, Access Bank Plc, FBN Holdings, and United Bank for Africa Plc. Others are: FCMB Group Plc, Diamond Bank Plc, and Fidelity Bank Plc.

These stocks and other non-bank stocks made the basket of top-picks by analysts at United Capital Plc, Vetiva Capital Management Limited, Afrinvest Securities Limited, SCM Capital Limited, and GTI Securities.

Sewa Wusu, Head of Research Unit at SCM Capital Limited, told Business Day that their second half stock picks are majorly the tier-1 banks.

“This is hinged on their interim dividends expectation. The dividends expectation is one of the value drivers to spur prices to the upside”, he said.

Wusu noted that going by liquidity levels in the financial system, he expects to see more buy-side activities with the only caution being the outcome of the monetary policy committee meeting of the Central Bank of Nigeria (CBN). Even though most analysts are expecting that the MPC will keep rates unchanged.

But in addition to the banking stocks, analysts are putting a buy and hold case for Flour Mills of Nigeria Plc, UAC of Nigeria Plc, Nestle Nigeria Plc, Dangote Cement Plc, Nigerian Breweries Plc, Guinness Nigeria Plc, Lafarge Africa Plc, PZ Cussons, Mobil Oil Nigeria Plc, Total Nigeria Plc, Okomu Oil Palm Plc, and Presco Plc.

“Looking ahead, we expect sentiments to be dictated by expectations around second half 2017 earning scorecards,” said the Kayode Tinuoye-led team of United Capital analysts.

GTI also makes a case for Forte Oil Plc and Julius Berger Nigeria Plc, while UBA, Nestle, Nigerian Breweries, GTBank, Fidson, Dangote Sugar, Stanbic are on their watch list.

Ayodeji Ebo, Managing Director at Afrinvest Securities Limited told BusinessDay that most of their earlier stock picks have not changed. In their recent recommendation, Afrinvest Securities top picks are Fidelity Bank Plc, ConOil Plc, Mansard Insurance Plc, Unilever Nigeria Plc, and Lafarge Africa Plc.

Ebo told BusinessDay that they are still optimistic that the Nigerian stock market will rap-up 2017 on a positive note. He is positive that manufacturing, industrial and consumer goods stocks will report improved earnings due to increased foreign exchange liquidity.

“Based on our projections, current sentiment will be sustained with the Investor and Export (I&E) window still providing dollar liquidity for many corporates. We won’t be surprised to see impressive upside earnings in the second half,” he said on phone Monday.

 
Iheanyi Nwachukwu