Ruth Ibikunle
The Nigerian stock market last week closed on a bearish note, shedding 1.16%. Year to date, the market has returned 28.35% with the All Share Index and Market Capitalisation at 95,973.45 points and N55.129 trillion respectively.
In a stock market review with the MD/CEO of GlobalView Capital Limited, Aruna Kebira, the following were discussed:
Excerpts:
• The stock market last week closed on a bearish note as the All Share Index declined by 1.16%. What is the outlook for the new week?
The presence of the banks’ public offerings and rights issues are taking a toll on the liquidity in the market arena.
Most investors feel obliged to take up their rights issues and most believe in the effect of the public offers, the attendance consequence of the upward trajectory of the price at the close of the activities, and are queuing behind those stocks to opt in through their public offerings.
The funds that are channeled towards these offers were meant to come to the stock market but are being paid into the coffers of the issuers.
Sometimes these funds are even sourced from the stock market thereby hindering the liquidity flow in the market.
We may continue to express these negative closings as more banks are in the process of coming to the market for their capital market activities.
But in all, some stocks are pulling their weights seriously it is just that their weights are not enough to change the market direction
• What is driving the growth in the share price of RT Briscoe and Tantalizer?
Tantalizers did a private placement of over a billion Naira and the offer has since been listed on the floor of the exchange.
According to sources, the single subscriber to the private placement has committed to buying more units of the share of the company from the secondary market
Chance is, that the force behind the climb of the price is a result of their buying activities in the stock. I think that is also a show of confidence in the future of the stock
• How sustainable is the rally in Oando? Is it a good buy at the current price of N47.85?
Oando started its accent to the present state at a price of about N12.00.
The news that Oando PLC has Completed a $783 Million Acquisition of Eni’s Subsidiary, Nigerian Agip Oil Company (NAOC) has been the catalyst in this price appreciation.
But this is Q32024 and the last report from Oando is the UFS as of December 2023 where they reported a loss after tax of N 70,945,510
Oando has rallied over 250%. The only thing a decerning investor is to do is shine their eyes and trade with caution. If you doubt me, ask what happened to investors who bought into Oando at the price of N36.00 during the ConocoPhillips era
• How attractive is UCAP at N19.75?
UCAP broke the ice in its announcement of a 2-for-1 bonus and an interim dividend of N0.90.
That was the best way for a stock and its owners to beat their chest concerning what is in the offing for the shareholders.
The stock was marked down to the price of N10.03 but the machine rounded it up to N10.05. The stock never trades at that price.
The market has a lot of confidence in the stock and is eagerly waiting for the release of the next quarter’s earnings report to determine which level the stock will attain
• Why is Cutix Plc trending down?
Cutix also gave a 1 for 1 bonus and a dividend of N0.15 which has also been marked down to N2.40. It rallied from that price to N3.37. But note that Cutix and UCAP belong to different industries and sectors in the economy and their liquidity in the market also differs.
Cutix may have just done its best and found the N3.37 as its resistance price.
• What are the stocks to watch?
Tantalizers, UCAP, Transcorp, Access, UBA, Wapco, and a host of others