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Nigeria  
ARM Daily Market Commentary  16 June  2010 

Inflation data helps… Market Statistics

NSE ASI Value 25,719.32
The Nigerian Bureau of Statistics released detailed inflation data for the
Daily change +0.76%
month of May, confirming the 1.5ppt improvement in headline inflation to
QTD -0.95%
11%. The average consumer price level as at May 2010 for urban and rural
YTD 23.49%
dwellers rose by 6.7% and 13.1% year-on-year, respectively. The improved
Market Activity Today 5-day Avg.
year-on-year data appears to have been supported by a relatively stable
Nos of Deals 7,063 10,770
currency for the past nine months, which may have limited any imported Vol Traded (mln) 360.61 249.02
inflation. However, monthly data show that price levels remain on the rise. Val Traded (mln) 4,167.33 1,978.55
Food prices rose 0.3% over April levels, but the “All Items less farm pro- Sector QTD YTD
duce” jumped a larger 0.9% most of which was adduced to miscellaneous Banking -5.38% 22.62%

goods. Regardless, we believe inflationary pressures remain from diverse Brewery 5.35% 20.09%

Building Mat 6.54% 48.32%

sources, especially the CBN’s expansionary posture, but that a breakdown
Conglomerate. -7.34% 20.05%
in the transmission mechanism (with banks only gradually beginning to
Food 17.75% 61.23%
lend) might be delaying the full impact. Thus, we continue to lean towards
Beverage 5.67% 46.98%
double-digit inflation levels for the rest of the year, especially as the effect
Insurance -5.82% -12.94%
of federal spending and approved wage increments begin to pass- Pet Mkting 48.04% 57.61%
through into the broader economy. 52-week NSE ASI Performance

35,000
30,000
Gains persist
25,000
The Nigerian Stock Exchange All-Share Index maintained its uptrend to-
20,000
day, gaining a further 0.76%. Today’s gain leveraged off significantly im- 15,000
proved performances from the Banking and Building Materials sectors. 10,000
Overall, sentiment appears much improved, given the positives recorded 5,000

in macro-economic data (inflation), helping the NSE ASI extend the posi- -

tive streak to a fourth straight session. The run has gradually shrunk the
Sep-09

Mar-10
Dec-09
Jun-09

Jun-10

quarter-to-date loss, which now stands at -0.95%.

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 NSE Daily Sector Performance

3.00%
2.30%
2.00% 1.57% 1.55%

1.00%
0.26% 0.22%
-0.19% -1.06% -2.67%
0.00%

-1.00%

BEVERAGE
INSURANCE
BANKING

BREWERY
BUILD. MAT

CONGLOME

PET. MKTNG
FOOD
-2.00%

-3.00%

And traded value rebounds

In line with our expectations, improved macro-data appears to have triggered a surge in activity as traded
value more than doubled to N4.17bn, from N1.86bn yesterday. However, the banking sector accounted for
a significantly less than usual portion of activity at 40%. This was almost single-handedly matched by Nige-
rian Breweries with a 37% share, though the stock closed 0.8% lower, despite the remarkable interest, after
starting on a strong note. First Bank was a distant second with a 14% share and also closed lower (-0.3%).
Besides these, no other stock received a double-digit share of activity, with Zenith Bank (7%) and GTB (6%)
being the only others to cross the 5% threshold.

Maybe for a while longer

We continue to anticipate moderately positive performance for the rest of the week as we expect investor
sentiment to remain buoyed by improved economic data. Furthermore, expected improvements in liquid-
ity may also provide the customary boost to the equity market.

Analyst Certification

The analyst(s) primarily responsible for preparing this research report, in whole or in part, certifies that with respect to each security or issuer covered:
⇒ All of the views expressed accurately reflect his/her personal views about the subject securities and issuers;
⇒ No part of his/her compensation was, is, or will be, directly or indirectly, related to the inclusion of specific recommendations or views in the report.

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 Table 1: Nigerian Capital Market Snapshot (As @ 16th June 2010)
Year Closing Last FY
End price Hist. EPS Curr EPS Est. EPS Hist PE Curr PE Est. PE Price/Bk DPS Div Yield YTD perf
AUTOMOBILE & TYRE
Dunlop Nigeria 31-Dec 6.26 (0.91) (1.33) (0.11) N/A N/A N/A 0.11 0.00 0.0% 0.0%
R T Briscoe 31-Dec 4.69 0.42 0.42 0.47 11.08 11.08 9.89 0.95 0.10 2.1% -8.5%

BANKING
Access Bank 31-Dec 8.90 0.05 (0.01) 1.06 174.15 N/A 9.25 0.94 0.00 0.0% 28.8%
Afribank 31-Dec 1.99 0.75 (5.06) (5.25) 2.65 N/A N/A N/A 0.00 0.0% -22.0%
Diamond Bank 31-Dec 8.16 (1.16) (0.70) 0.72 N/A N/A 11.34 1.11 0.00 0.0% 10.3%
First Bank 31-Dec 13.91 (0.54) 0.48 1.73 N/A 29.24 9.03 1.47 0.10 0.7% 12.2%

FCMB 31-Dec 8.10 (0.08) (0.08) 0.89 N/A N/A 9.11 1.02 0.00 0.0% 13.1%
Guaranty Trust Bank 31-Dec 17.50 1.02 0.99 2.62 17.23 17.70 8.35 2.07 0.75 4.3% 41.1%
Intercontinental Bank 31-Dec 1.57 1.93 (17.26) (18.28) 0.81 N/A N/A N/A 0.00 0.0% -2.5%
IBTC 31-Dec 9.42 0.43 0.43 0.85 21.70 21.70 11.04 2.17 0.30 3.2% 26.1%
Oceanic Bank 31-Dec 1.63 0.03 (12.68) (7.56) 55.50 N/A N/A N/A 0.00 0.0% -3.6%
United Bank For Africa 31-Dec 11.50 (0.34) (0.34) 1.65 N/A N/A 8.29 1.59 0.10 0.9% 28.9%
Union Bank 31-Dec 5.47 (5.39) (22.94) (16.49) N/A N/A N/A N/A 0.00 0.0% -8.8%
Wema Bank 31-Dec 1.00 (0.74) (0.74) 0.25 N/A N/A 4.07 N/A 0.00 0.0% 7.5%
Zenith Bank 31-Dec 13.20 0.30 0.31 2.00 44.13 42.66 8.26 1.23 0.45 3.4% 21.3%
PHB 31-Dec 1.30 0.97 (19.30) (18.38) 1.34 N/A N/A N/A 0.00 0.0% -1.5%
Ecobank 31-Dec 5.00 (0.64) (0.74) 0.59 N/A N/A 8.42 0.48 0.09 1.8% -53.0%
Skye Bank 31-Dec 8.05 (0.51) (0.64) 0.75 N/A N/A 10.71 1.06 0.05 0.6% 47.5%

Fidelity Bank 31-Dec 2.71 0.05 (0.16) 0.59 50.41 N/A 4.63 0.60 0.00 0.0% 12.9%

Sterling Bank 31-Dec 1.81 (0.75) (0.75) 0.26 N/A N/A 6.98 1.08 0.00 0.0% 47.2%

First Inland Bank 31-Dec 0.55 (8.98) (9.05) 0.24 N/A N/A 2.32 N/A 0.00 0.0% 3.8%
SECTOR AVERAGES (0.13) (1.12) 0.45 24.31 N/A 8.15 1.31 0.10 0.78% 11.02%

BREWERIES
Guinness 30-Jun 152.00 9.18 7.83 9.06 16.56 19.40 16.78 7.11 6.00 3.9% 19.2%
Nigerian Breweries 31-Dec 63.01 3.69 3.49 4.21 17.07 18.08 14.95 14.79 3.40 5.4% 18.8%
International Breweries 31-Dec 6.70 (0.14) 0.05 0.17 N/A 133.34 39.66 N/A 0.00 0.0% 195.2%
SECTOR AVERAGES 5.34 4.78 5.65 16.57 20.77 16.02 12.09 4.70 4.67% 77.74%
BUILDING MATERIALS
Ashaka Cement 31-Dec 17.84 0.55 0.55 1.84 32.26 32.26 9.71 2.38 0.30 1.7% 54.5%
Benue Cement Company 31-Dec 65.00 3.67 3.67 6.33 17.71 17.71 10.27 18.51 1.00 1.5% 51.1%
C.C.N.N. 31-Dec 19.60 1.23 1.23 1.37 15.90 15.90 14.33 7.73 0.45 2.3% 57.3%
W.A Portland Cement 31-Dec 40.99 1.68 1.74 3.46 24.34 23.56 11.83 2.81 0.60 1.5% 37.0%
SECTOR AVERAGES 2.75 2.76 4.92 5.13 20.30 10.90 12.30 0.59 1.74% 49.96%
CHEMICAL & PAINTS
Berger Paints 31-Dec 6.32 0.95 0.83 0.53 6.68 7.58 11.82 1.27 0.00 0.0% 113.1%
DN Meyer 31-Dec 4.98 0.22 0.26 0.24 22.76 19.52 20.87 8.89 0.10 2.0% -7.6%
CAP Plc 31-Dec 31.50 3.50 2.68 2.44 8.99 11.74 12.90 7.72 3.75 11.9% 57.6%
IPWA 31-Dec 1.09 0.04 0.24 0.04 26.03 4.61 26.03 1.47 0.00 0.0% -24.8%
Nigerian German Chemicals 31-Dec 14.29 0.12 0.12 1.09 122.50 122.50 13.08 1.76 0.45 3.1% -5.0%
SECTOR AVERAGES 2.06 1.61 1.61 31.60 31.83 14.36 5.77 0.86 3.4% 26.66%
CONGLOMERATES
PZ Cussons 31-May 30.10 1.24 1.27 1.22 24.20 23.75 24.71 3.13 0.68 2.3% 20.4%
UACN 31-Dec 41.72 2.50 2.22 2.75 16.67 18.76 15.18 4.26 2.00 4.8% 46.3%
AG Leventis 31-Dec 4.18 0.43 0.61 0.44 9.68 6.88 9.48 2.15 0.00 0.0% 69.2%
Unilever 31-Dec 24.14 1.08 1.04 1.52 22.31 23.24 15.91 22.36 0.68 2.8% 30.5%
SECTOR AVERAGES 1.48 1.41 1.68 21.12 21.72 18.70 10.06 0.84 2.47% 41.61%
FOOD & BEVERAGES

7-up Bottling 31-Mar 47.00 3.14 2.98 3.55 14.98 15.75 13.23 3.02 1.50 3.2% 59.86%

Big Treat 31-Dec 0.65 0.20 0.12 0.10 3.20 5.63 6.78 0.57 0.00 0.0% 3.17%

Cadbury 31-Dec 26.10 (0.90) (0.40) (0.35) N/A N/A N/A N/A 0.00 0.0% 148.81%

Dangote Flour 31-Dec 21.48 0.60 1.77 1.67 35.93 12.14 12.90 3.41 0.20 0.9% 116.31%

Dangote Sugar 31-Dec 19.40 1.82 1.27 1.35 10.64 15.30 14.32 7.14 1.20 6.2% 28.48%

Flour Mills 31-Mar 70.00 3.72 6.83 6.41 18.79 10.26 10.93 3.20 1.00 1.4% 94.44%

NASCON 31-Dec 7.90 0.49 0.60 0.64 16.13 13.24 12.41 4.50 0.40 5.1% 81.61%

Nestle 31-Dec 350.00 14.81 16.35 18.86 23.63 21.41 18.56 17.37 12.55 3.6% 46.14%

Nig Bottling Co. 31-Dec 30.00 1.01 1.01 2.27 29.58 29.58 13.23 1.79 0.75 2.5% 42.39%

Tantalizers 31-Dec 0.79 0.02 0.02 0.09 41.16 41.16 8.62 0.64 0.00 0.0% 2.60%

UTC 31-Dec 1.32 0.03 (0.02) 0.07 43.35 N/A 18.19 1.17 0.00 0.0% 53.49%

3SECTOR AVERAGES 5.12 6.00 6.71 18.65 15.04 13.31 5.13 1.96 2.08% 61.57%
ARM Research
 Table 2: Nigerian Capital Market Snapshot (As @ 16th June 2010)
Year Closing Last FY
End price Hist. EPS Curr EPS Est. EPS Hist PE Curr PE Est. PE Price/Bk DPS Div Yield YTD perf

PET> MKTING

African Petroleum 31-Dec 37.00 6.12 (6.51) 5.42 6.05 N/A 6.83 4.19 7.00 18.9% 10.4%

Conoil Plc 31-Dec 50.00 2.62 2.62 3.54 19.05 19.05 14.11 6.55 2.75 5.5% 81.0%

Mobil Oil 31-Dec 174.67 5.72 4.15 7.28 30.55 42.06 23.98 18.50 7.00 4.0% 83.9%
Oando 31-Dec 78.18 5.58 6.30 8.66 14.02 12.40 9.03 3.00 3.00 3.8% 24.8%

Chevron Oil 31-Dec 91.35 7.68 4.00 6.98 11.90 22.83 13.09 12.12 7.50 8.2% 30.9%
Total 31-Dec 253.94 11.69 18.81 18.63 21.73 13.50 13.63 11.86 11.68 4.6% 70.4%
Eterna Oil 31-Dec 7.50 (0.13) (0.10) 0.12 N/A N/A 62.11 6.65 0.00 0.0% 50.6%
SECTOR AVERAGES 6.78 7.20 9.72 17.47 16.76 13.83 8.25 5.56 6.44% 50.22%
INSURANCE
Cornerstone Insurance 31-Dec 0.69 0.03 0.02 0.03 20.63 30.01 20.19 1.14 0.03 4.3% 32.7%
Niger Insurance 31-Dec 1.08 0.12 0.14 0.16 8.93 7.76 6.87 1.04 0.15 13.9% 11.3%
Royal Exchange Assurance 31-Dec 0.70 0.19 0.19 0.17 3.63 3.63 4.06 0.23 0.10 14.3% 6.1%
Standard Alliance 31-Dec 0.50 0.05 0.13 0.19 10.06 3.97 2.59 0.18 0.08 15.0% -9.1%
UNIC Insurance 31-Dec 0.60 0.13 0.19 0.15 4.71 3.22 4.09 0.32 0.05 8.3% -45.5%
Great Nigerian Insurance 31-Dec 0.50 0.06 0.07 0.07 8.31 7.51 7.38 0.24 0.00 0.0% 0.0%
Mutual Benefit Insurance 31-Dec 0.50 0.13 0.16 0.17 3.86 3.15 2.97 0.57 0.06 12.0% -21.9%
Intercontinental WAPIC 28-Feb 0.59 0.11 0.11 0.14 5.55 5.58 4.26 0.27 0.13 21.2% -46.4%
Sovereign Trust Insurance 31-Dec 0.50 0.08 0.08 0.08 6.59 6.59 6.22 0.51 0.03 6.0% 0.0%
N.E.M Insurance 31-Dec 0.52 0.00 0.16 0.07 298.20 3.29 7.69 0.65 0.05 9.6% 0.0%
AIICO Insurance 31-Dec 1.26 0.08 0.08 0.09 16.27 15.93 14.31 1.88 0.00 0.0% 59.5%
Custodian & Allied 31-Dec 3.88 0.37 0.38 0.44 10.57 10.25 8.82 1.97 0.12 3.1% 39.9%
Crusader Nig Limted 31-Dec 0.78 0.40 0.48 0.21 1.93 1.61 3.69 0.60 0.14 17.3% -50.3%
Linkage Assurance 31-Dec 0.50 0.07 0.09 0.10 7.45 5.57 4.79 0.63 0.00 0.0% 0.0%
STACO 31-Dec 0.50 0.16 0.24 0.24 3.19 2.12 2.12 0.56 0.12 24.0% -60.0%
Law Union & Rock Insurance 31-Dec 0.50 0.09 0.08 0.12 5.52 5.98 4.19 0.47 0.06 12.0% -2.0%
Equity Assurance 31-Dec 0.50 0.05 0.05 0.09 9.81 9.81 5.33 0.87 0.04 7.0% 0.0%
Prestige Assurance 31-Dec 3.62 0.28 0.28 0.30 12.88 12.88 12.26 2.10 0.20 5.5% -9.5%
LASACO 31-Dec 0.50 0.08 0.08 0.11 6.09 6.45 4.47 0.69 0.00 0.0% -15.3%

Continental Re 31-Dec 1.10 0.05 0.05 0.06 24.11 24.11 19.28 1.02 0.05 4.5% -4.3%
Guaranty Trust Assurance 31-Dec 2.30 0.19 0.19 0.14 12.33 12.33 16.42 1.84 0.15 6.5% 7.0%
Goldlink Insurance 31-Dec 0.70 0.07 0.07 0.08 10.28 10.28 8.50 0.91 0.00 0.0% 40.0%
Universal Insurance 31-Dec 0.50 0.02 0.02 0.03 23.75 23.75 16.18 0.81 0.00 0.0% 0.0%
Oasis Insurance 31-Dec 0.62 (0.17) (0.17) N/A N/A N/A N/A 0.99 0.00 0.0% -58.4%
Guinea Insurance 31-Dec 0.50 0.10 0.10 0.30 4.91 4.91 1.68 0.11 0.00 0.0% 0.0%
Regency Alliance 31-Dec 0.50 0.03 0.03 0.07 16.20 16.20 6.76 0.76 0.02 4.0% 0.0%
Iinternational Energy Insurance 31-Dec 0.53 0.09 0.09 0.18 6.17 6.17 2.93 0.25 0.05 9.4% -15.9%
SECTOR AVERAGES 0.14 0.15 0.17 17.35 12.14 10.65 0.80 0.06 7.34% -5.74%

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