Ruth Ibikunle
The Nigerian stock market last week closed lower shedding 0.14%. Year to date, the market has returned 2.51% with the All Share Index and Market Capitalisation at 105,511.89 points and N66.147 trillion respectively.
In a stock market review with the MD/CEO of GlobalView Capital Limited, Aruna Kebira, the following were discussed:
Excerpts:
• The stock market last week closed on a negative note, shedding 0.14%. What is the outlook for the new week?
The declared Muslim holiday are two days out of the 5 trading days of last week.
The market declined by 0.13% on Wednesday, when trading resumed for the week.
This was a result of portfolio alignment in tandem with the release of Q42024 earnings reports and the bonuses and dividends declared thereafter.
Most investors were witnessed pulling their resources from stocks they believed did not deliver their desired dividend yields into those they consider better,
On Thursday the market went up by 0.01 and lost it subsequently on Friday.
The market is still in the process of analysing the released reports and investors are rejigging their portfolios in that direction.
By and large, coupled with the happenings on the international front, the market this week will close each day mixed.
But I expect the weight of the release of results and the dividend declaration to have the upper hand at the end of the day.
• The recent dividend declarations by companies are not driving commensurate price growth. What could be the reason?
The growth in the price of most stocks had made it impossible for issuers to declare dividends that are in the neighbourhood of 15-20% dividend yield. The very best we have witnessed is that of GTCO, returning about 10%. Discerning investors are always comparing dividend yields to the money market instrument yield and this year, it seems that the dividend yield falls short of the expectation of the market.
Secondly, our market is not a stand-alone. The tariff war that has been stated by Trump’s USA is ricocheting across the world markets and our market is not excepted.
• What is driving the growth in VFD Group? Is it a good buy at N57?
On March 26, 2025, VFD wrote to the NGX the outcome of their Board meeting which stated inter alia.
Investment in Abbey Mortgage Bank Plc: The Board approved VFD Group’s participation in Abbey Mortgage Bank Plc’s capital raise to strengthen its strategic position in the banking sector.
Capitalization of VFD UK: The Board approved the capitalization of VFD UK to support the company’s international expansion into key investment opportunities.
Investment in Bvndle Loyalty Limited: The Board approved an investment in Bvndle Loyalty Limited to enhance VFD Group’s presence in the loyalty rewards sector.
Capitalization of VFD South Africa: The Board approved the capitalization of VFD South Africa, reinforcing the Group’s commitment to Pan-African expansion and market diversification.
Capitalization of Template Limited: The Board approved to capitalize Template Limited to optimize the Group’s specialized lending operations.\
And on April 3, 2025, VFD declared a dividend of N2.50 and a bonus issue of 5 for 1. Which is about 400% growth in holdings as at the time of the bonus allotment and crediting to the CSCS accounts of investors.
• Why is UACN trending down?
On March 29, 2025, UACN declared a dividend of N0.22 at a price of N35.50. Returning a dividend yield of 0.62%.
Position holders are moving their resources to other stocks that would give them a better yield and in that flurry, the price is being depressed. The trending of the price may continue in the week until the price of the stock finds a support level.
• What is the best entry point for Oando?
Oando is trending down in spite of the release of news of their being the preferred company to manage the Trinidad and Tobago oil refinery.
The lower the price the better but investors should at this time begin to consider their 52-week low to their entry point.
Better still, as the market awaits further upward movement of the stock, investors should adopt the Naira cost averaging. Where an investor divides the total amount to be invested across periodic purchases of a target asset. This happens in an effort to reduce the impact of volatility on the overall purchase price. The purchases occur regardless of the asset’s price and at regular intervals.
• What are the stocks to watch?
VFD, Ecobank, Tantalizers, Ellah Lakes, Dangote Sugar, Nascon, and a host of others.