Ruth Ibikunle
The stock market last week closed lower, shedding 2.94%. Year to date, the market has returned -0.56% with the All Share Index and Market Capitalisation at 102,353.68 points and N62.851 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 negative note, shedding 2.94%. What is responsible for this?
The market was greatly impacted by Dangote Cement’s price actions last week. Remember that it is one of the SWOOT stocks that determines the direction of the ASI by where it swings in each trading day.
The stock, which was on full offer at N431.00 from the established price of N478.80, began to attract the market’s attention.
It dropped from N478.80 to N431.00 and again to N387.90, a full 10% diminution.
The market had no choice during the week to dance to the music of Dangote Cement more so when the other members of the SWOOT group were silent.
What is the outlook for the new week?
As we get deeper into the year the expectation of the release of the Q42024 audited or unaudited earnings reports becomes heightened. Most issuers on the NGX are not rigidly regulated and can publish their earnings report the moment the auditors are through with it and the board has successfully sat on it.
These and many more will continue to shape the market this week and beyond.
Don’t also rule out possible news surrounding some stocks like the Dangote Cement and Transpower whose offers were cleared and there are now bids surfacing in their board monitor.
I expect the market to return positively at the back of this observation at the end of the week.
· What is driving the growth in Neimeth, Livestock Feeds, Dangote Sugar, and NASCON?
Two things are involved in the movement in the prices of Nascon and Dangsugar.
It is either the market believes that the imbroglio between the Dangote refinery and the NNPCL has abated and that the man will not have the time to face the business combination of his three companies which he has started before or that there is an actual application to the relevant regulators concerning that.
Whichever way, it will be better for the market as a lot of people have been waiting in the wings to see the realization of the merger.
· How attractive is Oando at N71.8?
Oando can be overpriced. The only thing an investor and market participant needs to do about the stock is to weigh his or her risks as far as the stock is concerned.
The stock is so elastic that no matter how little information or news concerning it hits the market, there must be a price reaction. Positively or negatively.
If the news of another acquisition concerning the company is any to be reckoned with, the price may trend beyond the N71.80 it is now.
· The insurance sector dominated price decliners last week. What is responsible for this? How attractive are Insurance Stocks?
The sector was on the investors’ radar at the beginning of the year against the backdrop of the news of a possible recapitalization of the firms in the industry.
Market moved to reprice most of the stocks and we know that after the rain, comes sunshine and it is ever an outstanding practice in the market that traders will cash in profit. This is exactly what is going on currently going on regarding the prices of stocks in that sector.
· How attractive is Honeywell at N9.90?
Honeywell has trended recently with the swing in other stocks. This is not unrelated to the news of the delisting of the Flour Mill from the Security Daily Official List SEDOL of the NGX.
At this point, especially as the Q42024 earnings are still being expected, caution should be the watchword in dealing on the stock.
What are the stocks to watch?
Oando, Afriprud, Lafarge (Wapco), Tantalizers, Nascon, Dangsugar, and many others