The stock market last week closed on a negative note amidst profit taking returning -2.45% WtD. Year to date the market has returned 36.22% with the All Share Index and Market Capitalisation at 101,858.37 points and N55.735 trillion respectively.
In a stock market review with the MD/CEO of GlobalView Capital Limited, Aruna Kebira, the following were discussed:
• The stock market last week closed on a bearish note, declining by 2.45%. What is the outlook for the new week?
Remember that the stock market is information-driven, whether non-public or public information the market analyses and responds accordingly.
The information that the FGN was going to engage in the TB primary auction for a Trillion Naira was hanging in the air at the beginning of the week.
Analysts and market pundits were taken aback by the quantum of the auction. Hitherto, auctions have been in the neighborhood of N500b. They begin to wonder about the interest rate that would clear out a Trillion Naira at various bids.
Alas, at the end of the day, 364 TB stopped at 19%.
We also remember that since the meltdown of the market in 2008-9, every speculator and investor would also want to be the first to exit the market whenever they feel that the news going into the market arena would hurt the market.
Therefore, we had an initial market reaction on Thursday where sell orders overwhelmed the buy orders and the market caved in for the bears.
The only thing that has always consoled me is that while some are rushing to exit others are buying. And I asked myself, those selling do they think those buying are morons?
Nascon, Transcorp, and Dangsugar were on full offer in the neighborhood of 8 million units, especially Nascon. But what did we see on Friday, those offers disappeared and the stock looked up.
The gains on Friday were not enough to neutralize the losses up until Thursday.
I see the market rebounding and maintaining its gaining streak but the spate, I can not lay my fingers on.
• What is driving the growth of Meyer Plc? Is it a good buy at N6.91?
According to the 2023AFS of Meyer, the company grew its turnover from N1.435b (2022) to N2.266 (2023) representing 58%. Even if all other statistics seem lower than the previous, the market is appreciating the company for gaining more market share during the period under consideration.
• What are the possibilities in banking stocks?
If you noticed, the current prices of the banking stocks have fallen from their 52-week high prices to about 20 to 30% lower.
Can the prices come up to their established 52-week high? There is a possibility because it appears that there is still much liquidity in the system.
Therefore there could be good possibilities in the banking stocks.
There is a school of thought that believes that the dividend yield of the banking stocks might not be encouraging this year, more so that the CBN has warned that no bank should pay dividends out of the gains from FX unification.
But we have forgotten that the whole EPS that would be declared is not entirely made up of the gains from forex what about the profit from the operations?
The only snag I see there is the probable obstacle by the CBN concerning the allowable quantum of dividends amongst the banks
• Transcorp is trending down. What is the best entry price for this stock?
Transcorp as a stock is not insulated from the happenings in the market. When the news of the outcome of the TB primary action at 19% for 364 days hit the market, all the stocks were affected and Transcorp too was also affected but the stock has managed to stay strong at the current price waiting for another stimulus that would trigger it to either move up or down
• What are the stocks to watch?
DANGSUGAR, NASCON, JapaulGold, AIICO, Tantalizers, Access, Fidelity and FCMB