The month of March has come and gone while the Nigerian bourse had seen the best and worst the month could offer. What should we expect in April? This piece seeks to guide.
MARCH 2018 REVIEW- BEST GAINERS
· GSK: In the month of March 2018, the best price performer on the floor of the Nigerian Stock Exchange was GSK. It grew by 61.9%. The growth was as a result of the announcement of N7.10 special dividend and additional 40k. GSK started the month at N21 per share and remained more or less stagnant at that price until 21st of March when the dividends announcement was made. The price closed at the month of March at N34. Please note that the close of register is April 23rd, 2018.
Technically, all indicators are saying as at this morning that the stock of GSK at N34 is overpriced. Charts don’t want to know who you are and what you have given or not. This suggests what might be, after the price is marked for the dividends.
Should you be buying to the stock to get the N7.10k dividend and another 40k dividend totaling N7.50k? Can it still rise further before it is marked down? The charts are not actually saying so. Besides, 710,000 units of excess offer after trading session on Thursday before the market closed for Easter break suggested that the party might just be over. But again, the market has a mind of its own, anything might just happen.
· ABC TRANSPORT: The company started the month of March at 36k. 44.44% was the growth in March as the price closed at 52k on the last trading day in the month.
Should you still invest in ABC transport? The charts are not saying so. The company’s audited report released on the last trading day of the month of March shows that the earnings is now 31k from a loss of 36k in the previous year. Except that the company did not declare any dividend, the 31kobo earnings per share is very fantastic for a stock of 52k.
· NEM: The comopany grew in price by 30.95% in the month of March. Its price was N2.10 at the start of the month and it closed at N2.75k.
The company’s audited report was released last week Thursday with earning per share of 53k. Gauging this with current prices, its earnings yield is 19% and PE ratio is 5.2. Comparatively, that is not a bad result, though there is no information about dividend.
Other major gainers in the month of March include:
· Consolidated Hallmark Insurance- 26.9%
· Custodian & Allied Plc- 24%
· Caverton- 23%
· Cutix- 19.56%
Major losers for the month of March include:
· FTN Cocoa declined by 50%
· Sovereign Trust Insurance declined by 45.24%
· African Alliance Insurance declined by 42.11%
· Regency Alliance declined by 39.58%
· Unity Bank declined by 31.46%
Most of the losses are traceable to the introduction of new rule on price movements by the Nigerian Stock Exchange.
POSSIBILITIES IN APRIL 2018
Trading on Tuesday April 3, 2018 sure commences the second quarter of the year 2018. The followings are the factors to consider for the month of April.
· The first factor to consider is the much awaited Monetary Policy Committee meeting by CBN as announced to now take place between April 3rd and 4th since the meeting couldn’t hold in January and March. It takes normally, two days. Please note that if MPC decides to increase rates, it will have negative impacts on the prices of equities and if rates are reduced, it will have positive impacts on the prices of equities.
· Lots of results were released on the last trading day of March. The market has not been able to react to these results. The first week of this month would be the appropriate time for the market to so react to the results.
· By mid April, Q1 earnings should have started hitting the market. Keep tab on these.
· A number of prices of companies that declared dividend would be marked down in April. Prices of some of them might rally back thereafter. Watch out!