Ruth Ibikunle
The stock market last week closed on a positive note amidst renewed buy interest. Year to date, the market has returned 30.34% with the All Share Index and Market Capitalisation at 97,456.62 points and N56.002 trillion.
In a stock market review with the MD/CEO of Globalview Capital Limited, Aruna Kebira, the following were discussed:
- The stock market last week closed on a positive note with 1.06% growth, week on week. What is the outlook for the new week?
The month of September marks the end of the third quarter of the year. The banks have been busy with the activities of capital raising to meet the minimum capital requirement of the CBN.
Consequently, they have focused more on the crucial activity before them than the release of their Q22024.
But Zenith, GTCO, and Stanbic have released very impressive Q22024 earnings into the market with a new interim dividend declaration of N1.00 and N2.00 respectively.
The market with its usual idiosyncrasy is expecting a similar performance from UBA and Access banks to toe the same line.
In another fortnight, the market will expect the release of the Q32024 earnings report.
The coming of the Dangote Refinery and its attendance positive consequences on the pressure on the naira and the reduction of the FGN appetite in borrowing via the TBs yields are a pointer that the market would soon experience a reversal of the capital flight from it and increased liquidity.
Although most stocks are already responding to the above expectation, those stocks that the bears had held to ransom will begin to regain their freedom and that would impact the market for good.
- What is driving the growth in the share price of FBNH, Berger Paints, and Flour Mills?
A cursory look at the report of Flourmill of Nigeria Q12024, as of June 2024, shows that there was significant growth across all their indices and metrics.
It grew its turnover by 67% and eps from -249k to 194k, representing a whopping 228% growth.
The market is a rewarder of sterling performances and a punisher of below-the-mark performances.
The current surge in the price of FMN is partly premised on that fact.
The recent rise in the price of FBNH has always been attributed to the fight for its soul by the major shareholders of the company.
The company has confirmed the sale of 100% of its stake in FBNQuest Merchant Bank Limited, its investment banking and asset management subsidiary while retaining ownership of its other subsidiaries to concentrate on its core banking functions. Which could be likened to a strategic divestment. This may have spurred the buying interest of the major shareholder to retain their controlling hold on the bank.
But one is surprised that the market is not taking the cancellation of the earlier scheduled AGM as a factor in its pricing.
- How attractive is Oando at N89.05?
The trend in Oando and the ascent in its price as it were seems not to have a bus stop yet.
The vicarious influence the extant administration has on the recent rally can not be quantified and cannot be over-emphasized. And to say that we have seen the last of the announcement of a foray into the sector by the company is an understatement.
Against that background, it is not certain we have also seen the last of the rally in the stock.
Buy I urge investors and traders to participate in the rally with caution as the market has always had a mind of its own and it is also a discounting factor. You never can tell which of the news from the company will enter the market first, lackluster quarterly performance, or announcement of another opportunity in the sector.
Shine your eyes.
- How attractive are NASCON and Dangote Sugar?
It was in the news that the NNPCL has deployed 500 trucks to load the much talked about PMS from the Dangote refinery from Sunday 15, 2024. It is also said that the NNPCL has also undertaken to supply the refinery with enough crude for its operations.
These movies are indications that the dust that had gathered over the refinery since its commissioning is beginning to settle and as such, the man’s mind will now be free enough to focus on the business combination of his three companies, the Sugar, the Salt and the Rice to be named Dangote Foods.
Let’s keep our fingers crossed and take positions appropriately as we may see enough traction in these stocks in the not-too-distant future.
- What are the stocks to watch?
UBA, Transpower, UPDC, Access, Wapco, Nascon, Dansugar, and a host of others