WOODLAND RESEARCH WEEKLY MARKET REPORT NSE INDICATORS. Friday June 10, 2016 MACROECONOMIC ENVIRONMENT MACROECONOMIC INDICATORS

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1 Friday June 10, 2016 WOODLAND RESEARCH WEEKLY MARKET REPORT MACROECONOMIC ENVIRONMENT Nigeria's government is expected to release about 350 billion naira ($1.76 billion) earmarked for capital projects this quarter into Africa's biggest economy, the budget minister said during the week. The spending is part of efforts of the country to stimulate an economy that contracted by 0.4 percent in the first quarter of the year. The Finance Minister Kemi Adeosun said 350 billion naira would be injected into the economy "every quarter until we stimulate growth". The government expects that various ministries, departments and agencies "should fast track processes for the capital budgets releases so that the economy can be quickly reflated," he said, adding that the impact would be seen "by the third quarter". There is hope for significant improvement in power supply in the days ahead as the Central Bank of Nigeria (CBN) has stepped in to address the liquidity and funding challenges facing the sector. To this end, the Bank has disbursed a total of N120.2bn to different electricity distribution companies (DISCOs), power generating companies (GENCOs), service providers and gas companies. The 4th Tranche of the disbursement, which is under the N 213bn Nigerian Electricity Market Stabilization Facility (NEMSF), was made in Lagos recently. The current tranche disbursed a total of N 55.5bn to 24 industry participants including three DISCOs, 14 GENCOs, one service provider and six gas companies The Federal Government during the week said it would issue $1 billion Eurobond in the third quarter of this year towards its securing of $3 billion loan from the World Bank and African Development Bank. Addressing a meeting with international investors in London during the week, Minister of Finance, Mrs. Kemi Adeosun, said Nigeria might issue a $1 billion Eurobond in the third quarter and that it was close to securing $3 billion of funding from the World Bank and African Development Bank. Kemi Adeosun said the government was committed to a budget deficit of not more than N2.2 trillion ($11.1 billion), or 2.1 percent of Gross Domestic Product, GDP. Nigeria has sold dollar bonds twice, the last time in mid-2013, when it raised $1 billion of five- and 10-year debt. The government has said it would fund the fiscal gap with about $10 billion of debt, half of it in foreign currencies. Yields on Nigeria s $500 million of securities maturing in July 2023, fell five basis points to 7.44 per cent in London and have dropped 1.2 percentage points this year. Nigeria s Eurobonds have gained 8.5 percent in 2016, compared with the average of 10.4 percent for high-yielding emerging-market sovereign dollar-debt tracked by Bloomberg. Three-month naira forwards dropped 0.2 per cent to per dollar, suggesting traders see the currency trading near that level in coming months. Adeosun said Nigeria would probably post budget deficits for at least three years and that its debt-to-gdp ratio would rise to 20 percent from around 13 percent in that period. Capital Market Review Analysis of the market activity in the week ended June technically reveal pessimistic tendency as investors continued with the profit-taking propensity of the previous week. The Nigerian Stock Market thereby closed the week on a negative note with the All Share Index and market capitalization of listed equities depreciating by 1.45% each from the opening figures of and N9,491 trillion to close at 27, and N9,353 trillion respectively. Its year to date (YTD) return stands at -4.92%. MACROECONOMIC INDICATORS Broad Money Supply N20,470 Bn March, 2016 (M2) Credit to Private N18,882 Bn March.,2016 sector Consumer Index 13.72% April 30,,2016 (year-on-year) Monetary Policy Rate 12% May 20, 2016 (MPR) Deposit Rate of 6.90% March.,2016 Banks (3 Months) Average Prime Lending 16.82% March, 2016 Rate Nigeria s Bonny Light US$49.64 June`10, 2016 Crude Oil Nigeria s Gross External US$26.42Bn May 27, 2016 Reserves Source: Central Bank of Nigeria (CBN) PERFORMANCE OF NSE INDICES NSE INDICATORS INDEX TITLE prev week curr week CHANGE % NSE PREMIUM 1, , (2.36) NSE MAIN BOARD 1, , (0.92) NSE 30 INDEX 1, , (1.51) NSE CONS. GOODS (1.87) NSE BANKING (0.96) NSE INSURANCE NSE OIL & Gas NSE LOTUS 1, , (0.79) NSE IND. GOODS 1, , (6.52) NSE ASeM 1, , NSE PENSION (2.28) Woodland Capital Research Weekly Market Report

2 Domestic Market Review Twenty seven stocks appreciated in price during the week as against twelve stocks in the preceding week. The top ten price gainers during the week are: MARKET SUMMARY Last Week Last Week % Change Volume M 1,263 M Value N= N=7,871 B N=11,583 B Total Gain Total Loss Forty One stocks depreciated in price during the week as against Sixty stocks in the preceding week. The top ten price losers during the week were: Deals 17,561 17, All Share Index 27, , Market Cap. N=9,353 N=9, Trillion Trillion TOP TEN GAINERS EXCHANGE TRADED PRODUCTS (ETP) Traded during the week were a total of 78,666 units of Exchange Trades Products valued at N866, in 25 deals compared with 6,500 units of Exchange Traded Products valued at N117, in 24 deals traded in the preceding week, Company Op. cl. Gain Gain in % UNITY NEM UNIONDICON NEIMETH OANDO BERGER ECOBANK AIICO MCNICHOLS ASHAKA TOP TEN LOSERS BOND MARKET A total of 4,725 units of FG bonds valued at N5,265, in 3deals were traded during the week under review compared with 151,970 units of FG bonds valued at N170,962, in 5 deals traded in the previous week. Company Op. Cl. Loss Loss in % CADBURY (1.99) (9.71) AIRLINE (0.18) (9.38) UBA (0.43) (9.11) GLAXO (1.79) (8.95) UBN (0.47) (8.59) SKYE (0.10) (8.20) REDSTAR (0.30) (6.98) FIDSON (0.14) (6.83) FIDELITY (0.07) (5.30) FBNH (0.21) (5.25) Woodland Capital Research Weekly Market Report 2

3 Domestic Market Review OUTLOOK AND STOCK RECOMMENDATION FOR THE WEEK (13/06/16-17/06/2016) As in the preceding week, the Nigerian Stock Market experienced a downward slope during the week ended June 10, 2016 as investors shun share accumulation due to falling economic statistics. However, the pronouncement of subsidy removal from petroleum products and adoption of flexible exchange rates may continued to stimulate investors. In the coming week, investors may likely experience share accumulation that may lead to reasonable price appreciation as prices of stocks have dropped considerably. We therefore recommend the following stocks during the week in view. Cadbury released its year end and first quarter 2016 during the week. The Company s bottom line has turned positive compared with the negative figures in The attractive current price and payment of N0.65 dividend make the stock a good buy FBNH, TIGERBRAND, TRANSCORP, MOBIL TOTAL OIL, UBA, UCAP and ZENITTH BANK PLC prices may likely appreciate during the coming week due to strong fundamentals, low and attractive price. The signing/execution of 2016 fiscal bill and adoption of flexible exchange rate by the Federal Government may continue to improve the liquidity in the economy. These may likely increase patronage of both local and foreign portfolio investors into the market. RECOMMENDED STOCKS FOR PURCHASE Stocks Current 52 wks Low N= 3 Mths Target price FBNH CADBURY TIGERBRAND TRANSCORP UBA UCAP ZENITH BANK STOCKS ON HOLD Stocks Current 52 weeks LOW 3 Mths Target Expected % Change % Change GUARANTY TOTAL NB MOBIL FINANCIAL HIGHLIGHTS OF THE RECOMMENDED STOCKS Company Result Turnover PAT Current N Last yr N Current N Last yr N Curr EPS Last Div. Paid CADBURY PLC 1ST QTER, 31/03/2016 7,121 bill 6,732 bill bill (334) bill N0.38 N0.65 UCAP PLC 1ST qter UBA 30/03/2016 1,856 Bill 1,307 bill 1,138 BILL bill 0.19 N=0.35 1ST QTER 31/03/ ,134 bill 83,098 bill 16,986 bill 16,956 bill 0.47 N=0.40 TOTAL PLC 1ST QTER 31/3/ ,705bill 60,043 bill 2,825 bill bill N8.32 N12.00 NB 1ST QTER 77,555 31/03/2016 bill 69,922 bill 10,455 Bill 10,102 BILL 1.32 N=3.60 MOBIL 1ST QTER 31/03/ ,651 bill 16,199 bill 1,816 bill 1,489 bill 5.04 N7.20 Woodland Capital Research Weekly Market Report 2

4 MARKET DEVELOMENTS LAST WEEK The Board of Directors of the African Development Bank Group (AfDB) through its private sector window has approved a $150 million Line of Credit (LOC) to United Bank for Africa (UBA) Plc. The LOC will thus help finance infrastructure and SME projects, including women-owned enterprises in Nigeria. It will support infrastructure development, particularly the power sector, which is a major constraint for Nigeria s economic diversification and inclusive growth. By leveraging UBA s network, the LOC will also scale up lending in both urban and rural areas to create more jobs and to promote inclusive growth for Nigeria s economy by stimulating the various sectors such as manufacturing, construction, agriculture, education and services LAFARGE AFRICA PLC write to inform the NSE that further to an application submitted to the Securities & Exchange Commission ( SEC ) on behalf of Lafarge Africa Plc ( Lafarge Africa or the Company ), SEC - by a letter dated May 27, 2016 confirmed the registration of the Company s N100,000,000,000 Bond Issuance Programme and the clearance of the draft documents submitted in respect of the Series I and Series II Bond Issuances. The SEC also confirmed the commencement of the Book Build. The Company is in the process of finalizing the issuance of the Series I and Series II Bonds, following which the transaction documents will be updated and submitted for clearance by the SEC. The Signing Ceremony will hold once the SEC No Objection is obtained. MARKET ANALYSIS AND EXPECTATIONS Analysis of the market activity in the week ended June technically reveal pessimistic tendency as investors continued with the profit-taking propensity of the previous week. Volume analysis revealed improved bargain tendency towards UBA ZEN- ITH TRANSCORP and UCAP while investors displayed sell sentiments towards OANDO, VITAFOAM and MOBIL. The bears ruled the week, depressing the key benchmark index by points against 1, gain recorded in the previous week to close at 27, The All Share Index traded within the range of 28, (week-high) and 27, (week-low) to settle at 27, In the coming week, the change in both fiscal and monetary policies, which tilts towards market economy may continue to drive optimism towards investment in equities. INVESTMENT BASICS How Share s Are Determined on The Nigerian Stock Exchange Investors in the Nigerian Stock market often check prices of stocks at the close of trading every day. The information is published in a price list published daily by the NSE. It is used daily by thousands of investors to measure the value of shares. But how is that price determined? We will use these two scenarios to explain. Scenario 1 You instruct your stockbroker to buy shares for you at say N2 only for you to check the price list and find out the stock closed at N1.9 as contained in the pricelist. Scenario 2 It is also possible that your stockbroker could not buy the stock for you at N2 even though the closed trading day pricelist places it at N1.9. So how is all this possible? How much you buy or sell a stock: The price you pay for a stock, just like any business, depends on the forces of demand and supply. Using the scenario above, you were able to buy the shares at N2 because there was a willing seller for that price. Someone else could well have bought or sold it at N1.9 or N2.1 per share. If you could not buy a the N2 as in the second scenario above, it is because there was no willing seller at that price. How the closing price is determined: The opening and closing price included in the price list of the Nigerian Stock Exchange is determined by the Exchange s engines. However, the principle basically is that a share can only register a price change if there is a single buyer of at least 50,000 units. What does this mean? If 7up shares for example was N130 today it will only move higher or lower than that price if at least there is a single buyer/seller of 50,000 units. Therefore, if 100,000 units is bought by 4 people at 25,000 each the share price will not move even if it cost each of them N135 per share. Bottom line: list are only a guide and should be used as such. It is not static and may not be a true reflection of share prices. Make sure you give your stockbroker a price range whenever you ask them to buy shares on your behalf. Woodland Capital Research Weekly Market Report 2

5 FIXED INCOME MARKET REPORT Money Market At the end of the week ended June 10, 2016, the Nigerian Interbank Offer Rates (NIBOR) closed negative for all the tenors. The NIBOR rate decreased by 51.56%, 9.19%, 4.17% and 6.42% for overnight, 1 month, 3 months and 6 months tenors to close at 3.27, 9.02, and respectively. Treasury Bills The Central Bank of Nigeria during the week under review sold N45.85 billion of 91 day treasury bills at 8.15%, N18.00 billion 182-day treasury bills at 9,48% and N80.00 billion 364-day treasury bills at 12.48%. However, there were no transactions recorded in Treasury bills during the previous week Foreign Currency (EXCHANGE RATE). The official dollar rate closed at N197/$1 during the week under review. The naira during the week depreciated against some major currencies. It depreciated by 1.30%, 2.50% and 1.95% against Euro, Swiss Franc and Yen to close at N223.46, N and N1.84 respectively. OIL PRICE As in the preceding week, the Nigeria s oil price appreciated slightly during the week under review. According to latest data given by the Central Bank of Nigeria, oil prices appreciated during the week above $50 a barrel and closed at $49.64 during the week under review compared with $47.17 recorded in the previous week. The oil price has recorded fluctuations in the last few months. NIGERIA INTERBANK OFFER RATE TENOR Curr. Rate Prev.Rate % Change Overnight Month Months Months Source: Financial Markets Dealers Quotations (FMDQ) NAIRA EXCHANGE RATES Currency Cur. Rate Prev. Rate Source: Central Bank of Nigeria (CBN) MONEY MARKET RATES This Week (%) Change % US$ POUNDS (0.36) EURO FRANC YEN CFA WAUA YUAN DANISH KRO SDR Last Week (%) % Change This report has been issued and approved by Woodland Capital Markets Plc. ( Woodland Capital ) This report is based on information from various sources that we believe are reliable; however, no, representation is made that it is accurate or complete. While reasonable care has been taken in preparing this document no responsibility or liability is accepted for errors or fact or for any opinion expressed herein. This document is for information purposes only. It does not constitute any offer or solicitation to any person to enter into any trading transaction. Any investment discussed may not be suitable for all investors. This report is provided solely for the information of clients of Woodland Capital who are expected to make their own investment decisions. Woodland Capital accepts no liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. This report is for private circulation only. This report may not be reproduced distributed or published by any recipient for any purpose without prior express consent of Woodland Capital. Investments can fluctuate in price and value and the investor might get back less than was originally invested. Past performance is not necessarily a guide to future per- Open-Buy- Back (OBB) Overnight (O/N) % % Source: Financial Markets Dealers Quotations (FMDQ) Disclaimer Woodland Capital Research Weekly Market Report 3