Ruth Ibikunle
The stock market last week closed on positive note with 2.04% growth, week on week, bringing the All Share Index and Market Capitalisation at 52,403.51 points and N28.534 trillion.
In a stock market review with Mr Gilbert Ayoola, a capital market expert, the following were discussed:
Excerpts:
The market last week closed on a bullish note with 2.04% growth, week on week. What is the outlook for the month of May?
The equities market on the Nigerian Bourse remains positive closing at 2.04% growth in the trading month of April, while recording a return year-to-date (YtD) at 2.25 percent on the strength of positive sentiments to close the month, as the country look forward in preparedness to welcome on stream the new Administration in few weeks.
This position is further supported by strong renewed buying interest by portfolio investor witnessed in some stocks movement and upward price rally of some quoted companies coupled with releases of their Q1 2023 unaudited financial reports showing improved earnings in their top and bottom line during the year despite challenging environment thereby closing the market on positive position on the Exchange.
However, looking ahead in trading pattern in the month of May, I expect the market to maintain its tempo judging from previous performance and positive position giving rise to increased buy-in demand in some stocks and continous price rally through reinvestment in few critical sectors like Food production, power generation and other sources of energy, transportation, commercial services, oil and subsequently in the effort to stabilise the economy due to rising spending of government activities.
How would you rate performance the Q1 2023 results released so far?
As earlier indicated that companies that released results for the Q1 2023 performed better in terms of their earnings as compared to previous period, turning out positive results and earnings leading to upward movement in their shares price and appreciation.
Honeywell grew its price by 34.91% to N3.13. What is driving this growth? Is it a good BUY at the current price?
The market activity in price movement in Honeywell is due to the investor’s anticipatory perception ahead of its Q4 audited result duly expected to be released. Market watchers are of the opinion that since the company’s eventual takeover by FMN, recognising the market price of its parent company, it should be able to rise above current price level having attained high price of N3.38 previously in line with 50-day moving average at N2.28. It is a good BUY.
Transcorp got to N3.12 in the course of last week but eventually closed at N2.81. With the news of Femi Otedola’s exit, what are the possibilities in Transcorp?
The possibilities in further price movement in Transcorp is likely going be reduced on premise that, the price gained is self-induced on influence of Otedola’s buying interest based on his previous antecedent in FO and recently Geregu Power. However, on the news of current offload, I see the share price of Transcorp slowing down in the immediate and possibly price shading due to profit taking and subsequently price adjustment as a result of downward movement.
Also considered along the Q1 2023, the earnings and fundamental are enough to sustain continous price appreciation with sudden drop in its EPS from 5.17kobo to 2.58kobo when profit margin equally slide within the same period to 5.74% from 16.04% respectively.
FG has announced the suspension of removal of fuel subsidy. How is this likely to impact the capital market?
The suspension on removal of fuel subsidy by Federal Government is likely to have some impact on the capital market, leading to increased government spending and also increased demand in petroleum products and services.
Potentially, this could lead to further inflationary pressures and a weaker currency, which could negatively impact the stock market purchase power. On the overall, the impact on the capital market will depend on a number of factors, including the government’s spending priorities, the performance of key sectors of the economy, and broader market trends.
What are the stocks to watch?
For investors the stocks to watch ahead of coming weeks are BUA Foods, Transcorp, ACCESSCORP, Airtel Africa, Fidelity Bank, Nem, Honeywell, and many others.