The above proverb held true on the floor of the NSE last week as the Cats (High Cap stocks) were in the state of inertia while the mice (low cap stocks) dominated the flow of affairs on the floor of the exchange. Albeit the ASI returned negative at the end of the day, their actions helped to stem the free fall of the ASI amidst CBN devaluation of the Naira and the looming prediction of a possible recession.
The Nigerian equities on Monday, against the run of play, staged a comeback on the back of the current tempo, that is expectation of Q2 earnings season,
The ASI closed the week with a 12 basis points loss with little or no contribution from the High cap stocks.
…the cats that were away
MTN
MTN recorded 58% improvement in data and voice revenues in Q1 2020. The telecommunication company is expected to improve its revenues despite the lockdown due to the shift in business continuity plans to remote working strategies and improved internet usage
With a 2.363 trillion in market capitalization MTN is occupying the first position in market cap at the NSE.
Dangote Cement
Dangote Cement is the largest cement company in Africa with 45.6 million tonnes capacity across 10 countries. According to CBN PMI data, cement PMI rose sharply between May and June after the Federal Government allowed construction companies to resume during the first phase of lockdown easing
Dangote Cement has a 2.147 trillion market cap, putting it at the second position…
BUA Cement
BUA Cement announced penultimate week at the Adamawa State Government House, Yola that it is going to establish a three million metric tonnes cement plant and 50 megawatts power plant in Guyuk and Lamurde Local Government areas of Adamawa State.
BUA is Nigeria’s second-largest cement producer by volume, with cement plants in Sokoto and Edo states. The company’s newest plant in Sokoto is expected to be operational in 2021, with over N1.5tr market capitalisation holding about 12% in term of Capitalisation which is holding 3rd position in the market. When completed, the Guyuk Cement Plant will bring BUA’s total capacity to 14 million metric tonnes per annum.
Seplat Petroleum Development Company
An icon in the oil and gas sector of the exchange, it determines whether the oil and gas index will go up or not. It contributes about 227.139b capitalization to the NSE market capitalisation
Nigerian Breweries
Nigerian Breweries one of the giants in the industry controlling a number of brands in the market is a force to be reckoned with in the industry. With a 272,294b capitalization, NB has determined in one way or the other the direction of the ASI on a daily basis.
Nestle
With a high range of consumers products can boast that as today, that there is no house hold that does not consume their product daily , ranging from their star products of Maggi cube down to Nescafe coffee. It contributes about 931,371b to the capitaliswation of the exchange.
…the mice that played.
Zenith Bank
Zenith Bank is one of the top stocks despite delivering a modest 0.6% expansion in profit after tax in their Q1 2020 financials. The bank had been adjudged by the an international rating agency to be the best bank in Nigeria
Guaranty Trust Bank
GTB is the industry leader by cost efficiency and profitability. The sentiment surrounding this bank cannot be quantified. When The FPIs are coming to the market, their first port of call is Zenith Bank. It determines to a large extent the gain or loss in the NSE banking index.
Red Star Express Plc
The stock topped the gainers chart for the week as the market is expecting the release of its Q4 2020 financials and with the expectation of a dividend payment. The stock was driven from N2.97 to N3.52 during the week.
Nigerian Aviation Handling Company Plc
The stock was marked down for dividends and the market still have the belief that there is still value in the stock and has therefore price it back to close at N2.18 at the end of the week.
Cornerstone Insurance Plc and Chams Plc belong to the last echelon of prices in the market, trading with the band of N0.20 to N0.60.
One filled order of 100,000 units, which is a common place with regards to this class of prices, can change and establish a new price. 0.02k increase in the price in this category represents a 10% gain.
Little wonder that they appeared on the 4th and 6th position on the gainers chart respectively.
The current tempo in the market is that almost all stocks are showing to appear in the overbought region, any stimulus that is positive will trigger the market to appreciate.
Investors are advised to be cautious and watchful for any positive trigger and flow with it.
In a little while the market is going to rebound given the low prices available on the floor of the Nigerian Stock Exchange.
BUA cement lost 5% and Nestle lost 6.51% on Monday to help the ASI lost of 93 basis points on Monday aside this, the big caps were silent through the week.
Significantly, we should begin to consider taking position in fundamentally strong stocks to participate in the forth coming bullish wave.