LAST WEEK REVIEW
Though the Nigerian bourse ended in green from Tuesday to Friday of last week, gains recorded in these four days weren’t enough to wipe off the decline of 1.50% recorded on Monday to start the week. On the whole, it was a decline of 0.16% for the week ended Friday February 23, 2018. The nation’ main index, NSEASI had opened for the week at 42,638.83 and closed at 42,570.89. For the month of February, it has been -4.00% while YtD is 11.32. The Nigerian stock market remains one of the best in Africa, queuing behind Ghana.
NSEBANKING INDEX led all others last week with a WoW performance of 1.52%. so far in the year, investing in Nigerian banks would have yielded 21.35%. it remains the best in the market January 2018 till date.
For the week, NSEINSURANCE INDEX closely followed with a WoW growth of 1.24%. YtD, it has been 12.02% growth.
Though NSEOIL/GAS INDEX has a record of 5.44% YtD, WoW, its record of -1.81% declined made the worst performance in the week under review. All others but NSE CG Index closed lower in the week.
OTHER MARKET INDICATORS:
Qualities of stocks on the gainers and losers list showed a mixed week. NSEASI’ marginal loss is indicative of market near an equilibrium level where buyers are wary of committing higher prices and sellers not so much willing at offering at lower prices than current levels. Turnover, value and deals ended the week lower which suggests a measure of weakness.
- GAINERS AND LOSERS:
Aside Conoil with a loss of18.32% at N32.10 closing price, others on the highest percentage losers’ table for last week are all selling N5 thus suggesting the fact that most quality stocks largely sustained current price levels.
On the highest percentage gainers list, CAP, UBA and Cadbury sell above N10 while other major gainers sell below N5.
Impact of NSE’ rule on pricing makes Japaul active, gaining 16.67% for the week after it closed at 42kobo from week’ open of 32kobo.
- TURNOVER: Volumes of shares traded were down 31.36% last week as 2.018 billion units of shares were traded against 2.940 billion shares traded in the previous week.
- FACT: Decline in volume of trades technically suggests a weak market more so as value and deals went in same direction. The crux will be the major factors behind the decline, in this case, the absence of major catalysts.
- VALUE: There was a 22.15% decline in value of stocks traded last week. While the figures at the close of trading activities in the previous week stood at N27.924billion, a total of N21.740billion was committed to stocks last week.
- FACT: While lower value might not necessarily connote exit of funds from the market but portfolio reshuffling, it sure indicates low entry of fresh funds.
- DEALS: A decline of 10.75% was recorded in deals last week as 25,496 transactions were executed from 28,567 in the previous week
- FACT: Investors and Market Operators could be said to be taking their time to see the best of opportunities before dabbling.
POSSIBILITIES THIS WEEK:
- Though one or two premium stocks closed with higher bids than offer sizes Friday, barring any unforeseen circumstance or earnings release, the market yet stands to open weak on Monday of this week. If there is perchance any growth, it stands to be mild. The five days of the week will be shared between green and red colours, either way, performances are expected to be mild and not sharp.
- Technically, the odd favours a rise for most of the days this week though growth might not be that sharp. Indicators place the market within a level where growth is possible with lower tendencies of decline.
STOCKS TO WATCH FOR THE WEEK:
- AFRICA PRUDENTIAL PLC:
Its 2017 audited report is being expected this week. Whether this impacts the price or not, keep your calm, the company is undergoing a serious turnaround to change the face of returns in couple of years. Watch out for more information subsequently. Except if the earnings come in good, technical indicators are pointing south for this week but then, excess bid size of 2.3million units Friday makes Monday looks possibly strong.
- ZENITH BANK PLC:
Operating beyond the limitations of dividend payout set by Central bank of Nigeria’s amended rule, Zenith Bank remains one of the stocks to not just invest in but hold. Its capital adequacy ratio of 22.2% at Q3 of 2017 result is second in the industry. Nonperforming loan pressure on the bank as at Q3 2017 was 4.2% and the third best in the industry. These even stand to come out better in the Q4 results being expected. Dividend will sure be paid but notably, Zenith is not frivolous in either price performance or dividend payout. Your risk is low investing at current price level. Indicators are mixed, price might go either way this week. Bid and offer sizes comparison seems in support of mild weak Monday.
- ACCESS BANK PLC:
Q3 2017 accounts place Access Bank Plc as best with managing its loan profile. With just 2.5% non-performing loan, it infers that it is one of the best managed financial institutions in Nigeria. The bank looks further to ensuring a lower reported NPL going forward. In same account, the bank’s capital adequacy ratio of 20.5% is far better than industry average and regulatory minimum of 15%. Access is not frivolous in cash dividend payout, its retain profit sure makes it fit for long term investment.
One of those comatose equities on the floor of the Nigerian Stock Exchange it used to be. That has since changed after the application of NSE’ new rule on pricing. Consequently, the stock touched a low of 33kobo before it began to rise, closing at 42kobo Friday. With 51.976 million excess bid size against no offer Friday, Monday and perhaps the rest of the week stand strong for the stock. It however remains doubtful if it is worth fresh investment since there are not enough positive data to back up bids. As far as technical indicators are concerned, Japaul is a no go area but who says the price can still not rise to the 50k level?
- GUARANTY TRUST BANK PLC:
Certainly with the highest price and capital adequacy ratio in industry and second best non-performing loan incidence, the bank stands out, being the first to have recovered and selling above previous highest level before the market crash of 2008. Purchase at current price level carries no risk though price is not expected to gyrate indiscriminately up. Technical indicators are mixed thus suggesting that price could go either way but rather mildly. Relationship between Friday’s closing offer and bid sizes at almost same range suggests mild strong open Monday.
The stock might do a little jump this week. Its Friday close with 160,000 unsatisfied bid sizes suggests a good open Monday. Days of the week look more to be shared between the red and green signals. With WHO factory in place, cost cutting measure in the offing, diversified products and restless management in place. With 48kobo Q3 2017 EPS and an expected 55kobo audited earnings, Fidson at current price will be considered cheap but then, because of peculiarity of industry and burden of loan, dividend payout is expected to be between 7 and 15kobo.
The stock’s performance this month had been largely flat though YtD, it has been 21.8% return. For this week, indicators are looking down but when the 535,335 units excess bid size is considered, Monday stands to open strong. The audited report is being expected in the market this week, if it comes within expectations, price might rally one or two more days in addition to Monday’s expected performance otherwise, a slowdown will set i
10 OTHER STOCKS TO WATCH:
- UNITY BANK
- LIVESTOCSK FEEDS
- DANGOTE SUGAR