Ruth Ibikunle
The stock market last week closed on a positive note with 3.79% growth week on week. Year to date, the market has returned 41.39% with the All Share Index and Market capitalization at 105,722.78 points and N57.850 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 positive note with 3.79% growth. What is the outlook for the new week?
The stock market returned from the dampening effect of the FGN TB primary market auction on Wednesday February 7, 2024.
This is a fall out of the activities in Airtel Africa, Geregu, BUA cement, BUA Foods and FBNH.
Though, we have other low weight stocks who tried to also pull their weight in the course of the week.
Remember, that the market has been held down for a while now. And at the close of market on Friday, stocks were struggling to leave behind them whatever was holding them down.
Against that backdrop, I see most stocks breaking free and impacting positively on the ASI. Access touched N22.00 during the week, can it still go further low?
I think that we are going to see another upward looking week for the prices of stocks generally.
• Nigerian Breweries declared loss after tax of N106.3 billion in its Audited Report for 2023. No dividend is recommended for the year ended 2023. How attractive will Nigerian Breweries be based on this result?
You would not be expecting a company with such a loss and which has been fighting the battle against the rising of the dollar rate to declare a dividend. Except they want to pay from reserves which is fast depleting from the impact of the continuous losses from the effect of the FX unification.
It is a known fact in the market that whatever goes down must come up. But the fact is that when would the condition reverses for NB to allow it have good returns to turn around its books?
For those who can wait and who also believe that the dried bones shall rise again may take advantage of the dip in the price of the stock and wait for the raining days. When would it be the raining days, that is grossly dependent on the economy reform by the FGN and the CBN and also depend on the event that would take place in the course of the year.
In the stock market, anything, just anything can happen.
• What is driving the growth Geregu and BUA Foods?
The market is aware that the owners of these companies are passionate about the prices of their stocks.
Price behaviour of stocks includes availability of information, whether non-public or public emanating from the Board and management of a company.
The information surrounding these two companies are responsible for the upward trajectory of their prices.
To what height can their prices attain? The events of the coming days, weeks and month would see to that.
• How attractive is FBNH at N28?
FBNH’s 52-week high is N31.00 and the stock started the week at N25.50. Remember the announcement of the Chairmanship of the bank in the person of Femi Otedola.
The market knows the investor’s antecedent and other investors want to benefit from his activities in the bank and nay the stock itself. It is the jostling of investors to take position in a stock that often leads to increase in the price.
There is still a N3.00 difference between the last close price of the sock and its 52-week high and there is every possibility of the stock breaking the set 52-week high price.
• Why is Flour mills trending down?
According to the Q3 report from the company ended December 2023, the company made good strides in its turnover and PBT
But its finance cost made a mess of its earnings, no thanks to the escalating dollar rate.
From a PAT of N10.018b (2022), the company declared a PAT of N257.993m representing 3,783% decline.
You do not need to dig further to find the reason behind the decline in its price.
• What are the stocks to watch?
Access, JapaulGold, NASCON, Dangsugar, AIICO, MTN and a host of others.