Economy

Opportunities in a Bear Market – Two Stocks to Watch

Published

7 years ago

09/09/2019

By FSDH Research

The Nigerian equity market, as measured by the Nigerian Stock Exchange All Share Index (NSE ASI), depreciated by 12.42 percent as at the end of August 2019.

Our analysis of the performance of the equity market so far in 2019 shows that the Index recorded the highest depreciation of 7.5 percent in July.

FSDH Research notes that the declining crude oil price and fear of a possible global recession had negative impacts on the equity market.

Despite the current bearish trend in the market, we spot opportunities in the equity market. The two stocks we highlight here are: Zenith Bank and GTBank. Each has a history of good performance and good dividend payment; we believe the short-to-medium term outlook of these stocks are good. Therefore, investors should position in them as their share prices have recently dropped significantly.

Zenith Bank and GTBank are both strong players in the Nigerian banking sector. They both have footprints among the top-quality corporate customers. Both banks have consistent records of good asset quality and earnings.

They focus on low cost deposits from retail customers, therefore their cost of funds are low. This enables them to have good interest margin to drive profitability. They have remained the most profitable banks by absolute profit (Profit Before Tax and Profit After Tax).

The two banks have invested considerably in technology and deploy this service to existing customers and attract new ones. This has also generated a lot of non-interest income for them. Both banks operate a commercial banking licence with international focus.

FSDH Research’s analysis shows that Zenith Bank recorded improvements in both the top-line and bottom-line in Half Year (HY1) 2019 over the corresponding period of last year. The major drivers of the performance are an increase in non-interest income and its cost optimization strategy.

Although the Gross Earnings of GTBank dropped marginally in HY1 2019, it managed to record improved performance in profitability.

We attribute the drop in the gross earning to the decrease in interest income due to a drop in interest rate during the period. The growth in non-interest income and low interest expenses were mainly responsible for the growth in profitability

Our analysis of the latest results shows that GTBank is more efficient than Zenith Bank. Despite that, Zenith Bank is one of the most efficient banks in Nigeria. The efficiency ratio shows that Zenith Bank recorded the following as at HY1 2019; Net Interest Margin 9 percent; Profit Before Tax (PBT) Margin 34 percent; Profit After Tax (PAT) Margin 27 percent; Return on Equity (ROE) 11 percent (annualised to 22 percent) and cost–to–income ratio 53 percent.

GTBank however, recorded Net Interest Margin 10 percent; PBT Margin 52 percent; PAT Margin 45 percent; ROE 16 percent (annualised to 32 percent) and cost–to–income ratio 37.6 percent.

The Trailing Earning Per Share (EPS) for both banks stood at N6.39 as at HY1 2019. The Non-Performing Loan (NPL) ratio for Zenith Bank stood at 5.3 percent while that of GTBank stood at 6.8 percent and they are among the lowest in the banking industry.

Zenith Bank and GTBank have liquid balance sheets with well-diversified earning assets and sources of funding. Zenith Bank’s total assets as at HY1 2019 stood at N5.9 trillion while GTBank’s total asset stood at N3.6 trillion. Both banks’ assets are largely funded by customers’ deposits, with a strong capital base providing additional buffer for further growth. Loans and advances, and investment in Treasury Bills constitute the bulk of the total assets.

While Zenith Bank may need to create an additional N484 billion in loan assets to enable it meet the new regulatory requirement of minimum loans to deposits ratio of 60 percent, GTBank may need to create additional loan assets of N178 billion.

We recommend that investors with a long-term investment horizon take position in these two stocks at the current prices, which we believe offer significant upside potentials. Although recent global developments may have a short-term negative impact on the performance of the equity market, long-term investors may benefit from the long-term growth that the equity market offers.

The two companies usually give interim and final dividends, therefore, they are good stocks to be included in an asset manager’s portfolio.

The performance of stock prices of Zenith Bank and GTBank have also outperformed that of the NSE ASI in the last five years.

Economy

All Set for Champion Breweries’ 50th AGM on Thursday

Published

6 hours ago

19/05/2026

Aduragbemi Omiyale

By Aduragbemi Omiyale

Barring any last-minute changes, the 50th Annual General Meeting (AGM) of Champion Breweries Plc will take place on Thursday, May 21, 2026, at the Oriental Hotel, Victoria Island, Lagos, at 11:00 am.

At the yearly shareholders’ gathering, some of the key statutory and governance matters to be considered will include the Audited Financial Statements for the year ended December 31, 2025, alongside the Reports of the Directors, Auditors, and the Audit Committee.

Other agenda items are the declaration of dividends, election and re-election of Directors, authorisation for Directors to determine the remuneration of the Auditors, and election/re-election of shareholders’ representatives to the Audit Committee.

In line with its commitment to transparency, accountability, and shareholder engagement, the AGM will be held physically while also being accessible to stakeholders via the company’s official website: www.championbreweries.com.

This year’s AGM comes at a defining moment in the organisation’s corporate journey, following a transformative year marked by strategic expansion initiatives, including the acquisition of Bullet Energy Drink and its successful engagement with the capital market to raise growth capital.

These developments reinforce Champion Breweries Plc’s commitment to strengthening its competitive positioning, expanding its portfolio, and delivering long-term shareholder value.

The brewer has strengthened its transition into a group structure with the acquisition of an 80 per cent stake in enJOYbev B.V., a strategic move already delivering early earnings contribution and validating its international expansion drive.

The subsidiary’s results are now being consolidated into the Group accounts for the first time, with enJOYbev B.V. already contributing positively to earnings through operating profitability within the reporting period, an early validation of the group’s expansion strategy.

“This AGM reflects a defining chapter in our journey as a Company. The acquisition of Bullet, our successful capital market engagement, and the integration of enJOYbev B.V. into our group structure all signal a deliberate strategy for sustainable growth and diversification.

“These milestones position Champion Breweries Plc for stronger performance, broader market reach, and enhanced shareholder value. We remain committed to disciplined execution, operational excellence, and the highest standards of corporate governance,” the chairman of Champion Breweries, Mr Imo Abasi Jacob, said.

Economy

NRS Launches Unified Tax ID System

Published

11 hours ago

19/05/2026

Adedapo Adesanya

By Adedapo Adesanya

The Nigeria Revenue Service (NRS) has unveiled a unified Taxpayer Identification (Tax ID) system for all taxable persons across the country as part of efforts to strengthen tax administration and improve transparency.

The agency announced the development in a public notice issued jointly with the Joint Revenue Board (JRB) on Monday.

According to the notice, the initiative is backed by Sections 6, 7, and 8 of the Nigeria Tax Administration Act, 2025, which mandate every taxable person in Nigeria to obtain a Tax ID, in a wider move to expand the country’s tax base.

The NRS said the new framework is designed to create a centralised and harmonised taxpayer database that would enhance interactions between taxpayers and revenue authorities at both federal and sub-national levels.

“The Tax ID will serve as a single, unified identity for all taxpayers, enabling seamless interaction with tax authorities at both federal and sub-national levels. It is designed to consolidate taxpayer records, eliminate duplication, and ensure more efficient management of tax-related information,” the agency stated.

The revenue agency explained that the new system would simplify tax compliance procedures, including taxpayer registration, filing of returns, and payment processes.

According to the NRS, the framework is also expected to improve accountability and reduce leakages in tax collection by creating better visibility and tracking of taxpayer information nationwide.

“The initiative will simplify tax compliance processes, including registration, tax filing, and payment procedures. The system will improve transparency by enabling better visibility and tracking of taxpayer records while reducing leakages and improving accountability in tax collection. The framework will also harmonise taxpayer information across all levels of government,” the notice added.

The agency further disclosed that the new Tax ID system would replace the existing Tax Identification Number (TIN) Validation API currently used by Ministries, Departments and Agencies (MDAs), financial institutions, and other organisations for taxpayer verification.

Economy

OTC Securities Exchange Falls 1.31% as Key Stocks Decline

Published

14 hours ago

19/05/2026

Adedapo Adesanya

By Adedapo Adesanya

Three bellwether stocks weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.31 per cent on Monday, May 18.

This brought the NASD Unlisted Security Index (NSI) by 54.71 points to 4,133.70 points from 4,188.41 points, and shrank the market capitalisation by N32.73 billion to N2.473 trillion from N2.506 trillion.

Yesterday, FrieslandCampina Wamco Plc contracted by N12.45 to sell at N146.55 per share compared with last Friday’s closing price of N159.00 per share, Central Securities and Clearing System (CSCS) Plc declined by N2.34 to N70.00 per unit from N72.34 per unit, and NASD Plc lost 50 Kobo to trade at N34.50 per share versus N35.00 per share.

The trio overpowered the N5.56 gained Newrest Asl Plc. This stock ended the trading session at N61.15 per unit, in contrast to the previous session’s N55.59 per unit.

During the trading day, the volume of securities traded by investors slid by 56.1 per cent to 514,142 units from 1.2 million units, and the value of securities dropped 29.8 per cent to close at N17.4 million versus N29.8 million, while the number of deals jumped 12.5 per cent to 27 deals from 24 deals.

Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 60.8 million units exchanged for N4.1 billion, and Okitipupa Plc with 27.9 million units traded for N1.9 billion.

GNI Plc also ended the day as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units valued at N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.