Flour Mills Nigeria Rises Most in 3 Years on Buy Recommendation

Flour Mills of Nigeria Plc (FLOURMIL), the country’s biggest miller by market value, climbed the most in more than three years after Exotix Ltd. recommended buying the stock.

The stock rose a fifth day, advancing 5.7 percent to close at 89.90 naira in Lagos, Nigeria’s commercial capital, the biggest gain since July 2009. About 136 percent of the three- month daily average number of shares traded, according to data compiled by Bloomberg.

Investors should buy Flour Mill on its “strong earnings outlook,” analyst Binta Drave said on a conference call on Jan. 29. Flour Mills will benefit from share price growth in the first quarter and its investment in sugar business, Drave said.

“The stock is likely to hit 100 naira per share before its year-end in March, as investors take positions on it,” Raheem Mohammed, chief executive officer of Kundila Finance Ltd., said by phone from Lagos.

Flour Mills is building a sugar refinery with a capacity of 750,000 metric tons in Lagos, Chief Financial Officer Jacques Vauthier said on Nov. 15. The plant was expected to begin trial production in December, he said. A call to the company wasn’t answered today.

Nigeria, Africa’s most populous nation of more than 160 million, wants to cut food imports by raising domestic production. The country, which grew enough food to feed itself in the 1960s, is now the world’s largest importer of rice and sub-Saharan Africa’s biggest importer of wheat and sugar.

Flour Mills has risen 38 percent this month, compared with a 13 percent rise in the Nigerian Stock Exchange All-Share Index. (NGSEINDX) The stock slid 0.7 percent last year, while the benchmark gauge rallied 35 percent.

Exotix prefers Nigerian stocks that underperformed the market or peers in 2012, Ronak Gadhia, another analyst at the brokerage, said on the conference call.

To contact the reporter on this story: Vincent Nwanma in Lagos at vnwanma@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

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