Ruth Ibikunle
The Nigerian stock market last week closed on a positive note with 1.22% growth, week on week. Year to date the market has returned 0.65% with the All Share Index and Market Capitalisation at 103,598.30 points and N63.645 trillion respectively.
In a Stock Market Review with the MD/CEO of GlobalView Capital Limited, Aruna Kebira, the following were discussed:
Excerpts:
· Last week, the stock market closed positively with 0.65% growth. What is the outlook for the new week?
The market even this week is expected to close in the green zone, all things being equal.
The Q42024 earnings release season is on, and issuers that are not rigidly regulated are expected to commence the filing of their returns in earnest.
So far, so good, the Q42024 earnings the market has witnessed are far from being classified as lackluster. It is also expected that the success of the banks’ offerings would be a succor to the market.
It can also be observed that the SWOOT stocks are beginning to wake up from their deep slumbers. Transpower was on the upbeat last Friday after Dangcem moved out of its hitherto full offer position.
As at the time the Airtel Africa and Seplat became active this week, the attendant result is that the index will close the week higher.
- What drives the growth in SCOA, UDPC, and Coronation Insurance (WAPIC)?
Most of these stocks are moved by the run-of-play in the market. These stocks at a particular point in time have also been treated badly by the market, to the extent that market players consider them cheap at the current prices relative to the pricing of other stocks at the first rally of the year.
UPDC has always been hovering at a price between N1.80 and N2.02. This is purely due to the type of pattern of demand and supply for the stock
- Why is Sunu Assurance trending down?
At the beginning of the year, especially the first two trading days, the insurance stocks went on a rally. This was premised on the news that there is a possibility of recapitalization exercise in the sector.
That dust has come to settle and “the chickens are coming home to roost”. It is not uncommon in these types of scenarios to see speculator cashing in on the rallies to rake in their profits. So to a very large extent, profit-taking is the force that is dragging the price of Sunu downwards.
- How attractive is Transcorp at N52?
If you take a look at Transcorp and the potential embedded in the company, the N52.00 price would still be fair.
Remember that before the share reconstruction exercise by the company, the 52-week high price was N20.88, which translates to N83.52 after the exercise.
The N52.00 is trading is just N13.00 as before, where the stock hitherto finds its support level.
Therefore, there is every possibility of an upward trend in the price when corporate actions begin to hit the market.
- Japaul Gold reported growth in revenue and profit after tax for FY 2024. Is this likely to boost the share price?
The first market reaction of the stock moved the price from about N2.12 to a full 10% increase of N2.36.
The market being what it is known for, the dividend-savvy investors are not pleased with the no-dividend situation. They were cashing in on the opportunity to take their profits and move their resources to other stocks.
But the net effect of the earnings report will be seen playing out on the price of the stock in the coming trading days and weeks.
- Is the proposed dividend of N3.50 by Transcorp Power (TRANSPOWER) fair enough? How attractive is the stock at N349.8?
Transpower since its debut on the NGX, has not failed in its expected corporate actions.
Relatively, the N3.50 may be yielding about 1%, but it is noted that high-cap stocks dividend yields are always low and investors choose to look at it in absolute terms rather than in relative terms.
Such firms are always consistent in their dividend declaration and there is a notice of earnings growth and dividend growth from one year to the other which guarantees a continuous flow of such declarations.
Some stocks that are higher in price than Transpower don’t declare as much as N3.50 per share as dividend.
- What are the stocks to watch?
Afriprud, MTN, Lafarge, NEM, Japaulgold, Tantalizers, and a host of others.