- Investors with more than 10% loss to hold position
- Stocks to Watch
The equity market last week showed a sign of recovery as it admitted the bulls on Tuesday and Thursday, while the Bears dominated on Monday, Wednesday and Friday. The decline of Wednesday was marginal. Except for the losses in the share prices of BUA Cement, Dangote Cement and MTN on Friday, the market would have closed the week in the positive.
Share prices of most fundamentally sound stocks have come down, which has created another BUY opportunity for discerning investors.
Commenting on the market performance, the Chief Dealer of Global View Capital Limited, Aruna Kebira stated thus:
“The recovery we saw on Thursday was that the market was actually tired of losing. Zenith Bank got as low as N19.50, where else could it have gone to. Then the market made attempt to recover, even with the release of the result of GT Bank, Zenith Bank was still going up. Before noon on Friday, the market was gaining until BUA Cement, Dangote Cement and MTN shed weight which are the highly capitalised stock as far as the Nigerian Stock Exchange is concerned. That was what made the market to close in red on Friday”.
“There was supposed to be a recovery on Friday. The market was waiting for the result of GT Bank as regards what it will do based on UBA dividend declaration. The market was not expecting anything better or worse than N2.70 from GT Bank anyway. That means that GT Bank met the expectation of the market. So what the market will now be thinking is that, chances are that the other stocks; if they don’t do better than what they did last year, they will at least meet what they did last year. I’m thinking that the market may actually respond to that”.
“Going forward, anybody that is in position and has lost more than 10% should hold; because the market has the potential to recover. There is nothing much the MPC committee will do on Monday. If they tinker with the rate, it will not be more than 500 basis points, up or down. It now depends on which direction that they go, and that will determine the direction of the market, but I see the market recovering”.
Stocks to Watch
The current market mood has created another BUY opportunity for discerning investors. Just like we have always emphasized, fundamentally sound stocks should be the target for discerning investors.
- Access Bank grew to N8.05 from N7.85. It is trading 23.33% away from its 52 weeks high of N10.5, hence there is uptrend potential in Access Bank. With the book value of N19.12, Access Bank is considered cheap at the current share price. A position in Access Bank has an upside potential of 23.33%.
- FBN Holdings grew to N7.3 from N7.2. It is trading 18.89% away from its 52 weeks high of N9 which implies an uptrend potential for the share price of the big elephant. Considering its book value of N19.84, relative to the current share price, shows that FBNH is cheap at the current price and has a lot of growth potential embedded in it. A position in FBNH has an upside potential of 18.89%.
- Zenith Bank’s share price grew to N22.5 from N22. It is trading 21.05% away from its 52 weeks high of N28.5. There is uptrend potential of 24.74% in the share price of Zenith Bank. With the book value of N35.59 relative to the current share price, Zenith Bank is considered cheap.
- UBA grew to N7.15 from N7.1. It is trading 27.04% away from its 52 weeks high of N9.8. With the book value of N19.16 as against its current share price, UBA is considered cheap and has uptrend potential of 27.04%.
- Guaranty Trust Bank grew to N31 from N29.8 from N28. It is trading 19.38% away from its 52 weeks high of N38.45 and this implies an uptrend potential of over 19% for the bank.
- WAPCO traded flat at N22.6. It is trading 28.25% away from its 52 weeks high of N31.5. There is uptrend potential in the share price of Wapco as records have it that it has touched about N52 some years back.