Ruth Ibikunle
The Nigerian stock market last week closed lower by 1.09%. Year to date, the market has returned 36.83% with the All Share Index and Market Capitalisation at 102,314.56 points and N57.865 trillion respectively.
In a stock market review with the MD/CEO of Global View Capital Limited, Aruna Kebira, the following were discussed:
Excerpts:
•The stock market last week closed on a bearish note as the All-Share Index dropped by 1.09%. What is the outlook for the new week?
Last week was more or less a holiday week. The market was prepared for a two-day holiday, Tuesday and Wednesday but at the end of the day, we were dashed a third day-Thursday.
A lot of people and investors were still in the holiday mood at Friday and majority of the investors were still away from the market.
Be that as it may, Friday was also the day for the mark down of Access and Ucap prices for their declared dividends, and we know what normally happens to marked down prices.
To cap it all, Friday was a TB auction day and investor who seek better yields in the money and have taken position would need to fund those positions and when you have such dire needs, the only thing to do is to sell not minding at how much.
Bearing all unforeseen circumstances and shocks, the market this week would do well as there is going to be the full 5-day trading and a lot of analysis would also have been done over the weekend and the actions consequent upon those analysis would come to bear in this week’s market and it will be upward looking.
•What is driving the growth in Oando?
Oando for a long time has always mimicked the price movement of Transcorp. The market has classified them as peer and has brought in that level of correlation.
And the rumours at the market arena that there may be a possibility that the stock may not be delisted after all, or that the investors would get a better bargain in terms of delisting price has been the motivating factor that have kept investor belief in the stock.
•Why is the share price of Access Bank trending down? How attractive is the stock?
Access was marked down by its declared dividend of N1.80 and the marked down price of N20.70 was taken by the market to N22.00 in the forenoon on Friday. The situation changed as the result of the TB auction filtered into the market and the price was driven down to N19.00.
From the analysis of the Q42023 results, Access has the highest turnover, the highest PAT and the highest eps growth among the banking stocks.
At N19.00, taking position in the stock is like cherry picking.
• Is Transcorp a good buy at N14.95?
Transcorp has tested the N20.00 resistance price twice, though I am not a chartist, but the next time Transcorp touched the N20 mark, the probability that it would surely break through and form another resistance price is unity. The odds of that breakthrough are greatly in its favour
The Q4 2023 result of the company and the dividend declaration of 10k which is 100% of what they paid last year is an indication that the stock would continue to gather traction in the coming days and years.
As a parent body to Transcorp Power and Transcorp Hotels, the company had positioned itself into a situation of no lack.
A father cannot have two illustrious sons and eats peanuts at home, that is the new case of Transcorp Plc.
Remember that Transcorp Power declared a total dividend of N23b, 51.1% of that is hitting Transcorp Plc books by the Q2 2024 and likewise Transcorp Hotels declared a total dividend of N2b and 76.6% of that is set to hit Transcorp books by the second quarter of this year.
By that, a standard has been set and when that continues and the company also is not doing badly, the sky would be starting point for its price.
• How attractive are banking stocks?
The frenzy of the banking sector recapitalization vis-à-vis the proclamation of the CBN concerning the retained earnings not to be included as part of their capital to complete the exercise may drive down the prices of the banks stocks. More so that most investors are relying heavily on the quantum of their dividend yields to make investment decisions.
But I see the exercise leading to price appreciation after the decline and a sustained prices until the process is completed.
•What are the stocks to watch?
Transcorp, Access, UBA, Transcorp Power, Nahco, Japaulgold and a host of others.