Ruth Ibikunle
The stock market last week closed on a bullish note, returning 0.91% week on week. Year to date, the market has returned 32.96% with the All Share Index and Market Capitalisation at 68,143.34 points and N37.295 trillion respectively.
In a stock market review with the Managing Director of Global View Capital Limited, Aruna Kebira, the following were discussed:
Excerpts:
The stock market last week closed on a positive note with 0.91% growth. What is the outlook for the new week?
If you recall the market was waiting largely for the outcome of the Presidential Election Petition Court, which was finally delivered on Wednesday, September 6, 2023. The expectation cast a dark mood in the market. A group felt that the complaints had formidable evidence against the defender and the expectation was that the court was going to upturn the result of the last presidential election and would either disqualify the winner or call for a rerun of the election.
Another group felt that the evidence as presented by the complainants would not hold water.
But those feelings were enough to dampen the mood at the market place and there was a stay on the rampaging bulls.
The result came as planned by the court and those who expected the court to cancel the election and call for a rerun were disappointed while the other school of thought jubilated but the jubilation did not come until Thursday, hence the market performance that we saw.
Be that as it may, and since that dust has come to settle once and for all, the market will resume its normal bullish mood factoring in all the news at the market place.
The market would return positive again in the week but by how much growth is left to be witnessed as the week progresses.
Did I hear somebody mention Supreme Court?, well it is a bridge that we will cross when we get there.
What is driving the growth in Oando? Is it a good buy at N7.7?
Oando had written to the exchange of its intention to delist from the bourse at a price of N7.07. But it wrote to the exchange again on September 4, of its acquisition of 100% of the shares of Nigerian Agip Oil Company Limited.
The company stated: that the transaction increases Oando’s current participating interests in OMLs 60, 61, 62, and 63 from 20% to 40% and increases Oando’s ownership stake in all NEPL/NAOC/OOL Joint Venture assets and infrastructure which include forty discovered oil and gas fields, of which twenty-four are currently producing, approximately forty identified prospects and leads, twelve production stations, approximately 1,490 km of pipelines, three gas processing plants, the Brass River Oil Terminal, the Kwale Okpai phases 1 & 2 power plants (with a total name plate capacity of 960MW), and associated infrastructure.
This news has been the reason behind the recent rally in the Oando stock price.
Meanwhile, the NNPC wrote to the Exchange and said if the said acquisition was true that it would have a far reaching contractual/legal implications.
This happened between Seplat and NNPC over the assets of Mobil Producing Nigeria Unlimited and we knew how it ended.
I do not always want to meddle with stocks surrounded with such controversies, more so that the delisting price is slated for N7.07.
Except Oando writes again to the exchange either to withdraw their delisting notice or to jack up the delisting price above the price the stock is trading, I will say on the borderline, waiting and watching.
PZ is buying back its entire shares from shareholders at N21. How fair is this on investors?
PZ for fairly a long time now has been struggling. But industry watchers would have been able to lay their fingers on this earlier than now. When you see a company involved in asset ripping, selling associates and other businesses from year to year. They were actually preparing for this; else how can you explain a company’s earnings releases from quarter to quarter that would reveal humongous loses from operation only to jump to impressive and sterling comprehensive earnings as a result of extra ordinary/ exceptional income.
Well as at the time of the release of the delisting information, the stock was trading below N21.00, so those who think that the exercise and the wait is going to worth their while can go ahead and engage.
How attractive is FCMB at N6.8?
FCMB has been a peer of Fidelity Bank and we have witnessed the quantum of interim dividend declared by Fidelity.
The market while compensating Fidelity for that feat might touch off on FCMB, with the belief that the same performance may be repeated by FCMB at year end and since it did not declare an interim dividend, their final dividend would now be something to be reckoned with.
What are the possibilities in Zenith, UBA, Fidelity, GTCO, Access and FBNH?
GTCO has declared N0.50 as interim dividend, the biggest in its history and because Zenith and GTCO has been seen as belonging to the same peer group, the market is not expecting anything less from Zenith, and if that happened, that would also be the first for Zenith.
Fidelity too, has joined the league of the big boys, someone said to me, that he is sure that Fidelity is on its way to join the Tier-1 side of the banking stocks. Give or take, N0.25k interim from Fidelity was massive.
Access and UBA as friends and peer has been a good journey for both on the bourse but Access is like leaving UBA behind based on its current earnings releases to the market, which might not be uncorrelated with its business acquisition bid all over Africa.
The market is believing that Access and UBA are also going to declare their first high interim dividends. But what happed after the declaration of their Audited H12023 would confirm whether the market feelings is anything to write home about.
What are the stocks to watch?
NASCON, Dangote Sugar, UBA, Access, Fidson and Transcorp