Ruth Ibikunle
The Nigerian stock market closed on a bearish note last week occasioned by profit taking in Seplat, MTN Nigeria and 40 other stocks.
The All Share Index and Market capitalization declined by 1.16% to settle at 44,269.18 points and N24.112 trillion respectively.
An aggregate of 1.4 billion units of shares were traded in 19,025 deals, valued at N15.5 billion.
The market breadth closed negative as 19 stocks gained against 42 stocks that declined in their share prices week on week.
Mr. Aruna kebira, the M.D/C.E.O, Global View Capital Limited in a chat with Ruth Ibikunle responded to some questions about the performance of the Nigeria Capital market.
•How would you rate market performance last week?
The direction of the market last week was largely shaped by the coming back of Dangote cement that lost a maximum 10% last week and the coming back of Geregu.
Also among the stocks that gained last week are NAHCO and Courtville whose price performances for the week was out of a good quarter 3 outing.
Nahco grew its earning per share from 44k to 129k that is 193% growth
•Year to date, the market has returned 3.63%. Dropping from 6.07% it recorded at the close of trade last year December 31, 2021. When is the market likely to recover?
The recovery of the market is still far away as year 2023, the information and activities in the polity and at the market place are not cheering enough to wake the market from the current state that it is.
I learnt a dollar is now going for N850 while British pound is going for #1,005.
The change of currency by the Central bank of Nigeria, setting limit an account can receive within a month are news still casting doubt and uncertainty over the market.
In their December meeting, will the MPC reduce the MPR, increase it, or increase the CRR to further reduce the cash in circulation.
Most discerning investors at this particular period are sitting on the fence and waiting for these news to be factored fully into the prices of stocks before they come back
•Should we expect further price decline of equities?
If you notice that most equities, especially the fundamentally sound ones are now trading sideways.
They will gain a little today and lose a little tomorrow, some are trading about 10% lower than their established prices but have no enough board lots to establish new prices.
At that it looks as if the market has bottom out and may not fall up to 5% again, if at all.
Most prices are sticking around the axis they are currently trading. That also supports that their prices may have just bottomed out
•What are the market possibilities for the month of November?
The market will still be cold for the month of November as the much awaited q3 earnings releases did not perform the wonders the market was expecting.
The month will trade mixed
•What is driving the price of FTN cocoa, Nahco and Dangote cement?
FTN cocoa made a better loss in their q3, that’s 7k against the previous loss of 39k. That is 457% better.
There was an off market trade of 349.182m units in respect of the stock.
Nahco grew its earning per share from 44k to 129k that’s 193% growth
While Dangote just recovered from its previous loss.
•Chams plc shed 14.81% in the course of last week to n0.23 from N0.27. What is responsible for the price decline?
Chams in their q3 result performed woefully. Their loss position grew from 0.28k to. 2.41k that is 534%
•Ecobank is yet to release q3 result. Could that be the reason why the price dropped to #10?
When the market waits for the result of a company while its peer are releasing theirs, it suggests that they may be up and against an adverse situation that might lead to their poor outing, therefore, position holders will be taking their exit and that clamour is what usually leads to a loss.
•Why is Seplat trending down?
When the news of Seplat taking over the assets of MPNU, the information drove the price to #143000 which is its 52 week high price, but there comes another news that the deal has been reverse, trust investors, they drift out as soon as it possible for them.
Even in the face of their interim dividend of about 2.5 cents, the market is still waiting for when the news will be in its favour.
•What are the possibilities in Fidson, UBA, GTCO, Zenith, Access
These stock as far as I’m concerned are trading almost at their lowest which makes them buyable at the current prices. But we should put at the back of our minds that these stocks prices will only grow when the information at the market arena is better and when there is an improvement in the economy.
How would you rate the performance of Vitafoam? Is Vitafoam likely you pay dividend for their year end?
Vitafoam current performance may not be as before but they still try in the face of the head winds prevalent in every facet of our economy. Kudos to them.
Vitafoam has robust accumulated profits, but it now depends on their board in the decision of what dividend to declare. Even if they want to pay more than last year, Vitafoam can do that but subject to their present cash flow.
•Is the #2 interim dividend capable of pushing the price of Okomu up? Is Okomu a good buy?
Okomu oil is a stock to buy any day. They have not just paid #2 only as interim, remember they declare #7 in their q2 earnings. It now makes it a total of #9 interim dividend declared by 0komu oil. And they are growing in every quarter.
The stock has #216 as it 52 year high and its current price on board is #169.50. I think it has just come to the level that i should say it is cheap.
•How attractive is Presco based on the q3 result and declared dividend?
Presco is also in the category of Okomu oil but the growth in Presco is not as remarkable as that in Okomu and the dividend payout is better in Okomu oil than in Presco. But all the same presco is another good stock to buy
Nestle is currently trading at #1215. Are there possibilities for Nestle to still go up based on the q3 earnings and interim dividend of #25?
Nestle #25 interim dividend was superb. It’s currently trading at its 52 weeks low and that makes it attractive
With the completion of the MTO of 0.10% equity stake in Eterna plc by Preline limited, what will happen to shareholders of eternal plc?
The mandatory tender offer will only allow them to buy up to 0.10% of the total share s outstanding. When all the shareholders indicates their interests, they will then buy on pro rata basis.
How will the repayment of Ecobank $400m convertible debt affect their earnings?
Definitely, it would as the interest paid would be expunged from their income statement and the balance sheet will also be delivered.
The interest will now be added to profit made and that can boost their earning per share.