Ruth Ibikunle
The stock market last week closed on a positive note with 0.32% growth. Year to date, the market has returned 33.81% with the All Share Index and Market Capitalisation at 100,057.49 points and N56.602 trillion.
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 0.32% growth. What is the outlook for the new week?
The stock market has no option than to close in the green zone to end the first half of the year. The actions and inactions of the portfolio and fund managers culminated into the direction it took.
Analysts were expecting a better closing of the market in the last week of the last month of the second quarter but the marginal closing is a testament of the illiquidity prevalent at the market arena at this moment.
All issuers whose end of the financial year is December are expected to file their Q2 earnings report latest by the end of the month of July.
Except an issuer communicates with the exchange the reasons as to why it cannot file its report at the stipulated time, such an issuer will be surcharged.
Be that as it may, we are going to see an avalanche of earnings reports in the month of July especially within the last week of the month
But then we still have the early birds, who will begin to comply just as the month will be starting by Monday.
Since the outings of the issuers in the Q1 2024 was something to be reckoned with, there is a high expectation that they will consolidate on what they did in Q1 in Q2 2024.
Such expectations can create a buying interest from the start of the month and might create a situation where the ASI will continue to hitch upwards.
• The All Share Index on Friday touched the 100,000 points mark again after many weeks. How sustainable is this growth?
Following the explanation above, buying interest was rekindled in the last week of the month to close most prices up.
We also see some good earnings releases and bonus declarations during the week coupled with the fact that issuers started the release of their notice of meetings and closure dates.
During the week, MTN lost and recovered the loss, Seplat gained. Note that these two are member of the SWOOT group (Stocks With Over One Trillion Capitalisation) that determine the direction of the market
• Is UCAP a good buy at N26.50?
On June 26, 2024 UCAP wrote the NGX concerning their proposed board meeting scheduled to be held on July 16, 2024 and in it they made mention of a possible interim dividend and bonus issue.
The market currently is bereft of such rewards to investors, so the investor took the information with all seriously and the demand for the stock surged and it has been on full bid since Wednesday June, 26, 2024.
The 52-week high price of the stock is N27.65 while the 52- week low is N13.05. Whether it is capable of the stock to set a new 52 week high as a result of this announcement is dependent on the demand for the stock and the value investor place on both the dividend and the bonus.
The coming days and week will prove to what extent the price of the stock can go
• How attractive is Fidelity Bank at N10.20?
Fidelity Bank currently has a hybrid offer on board. Rights issue and public offer. They made out time to visit the NGX for a fact behind the offer to the investing public and media practitioners.
They were able to satisfy the curiosity of all and provide suitable answers to all the questions raised.
Fidelity has been a dividend paying stock and its earnings yield over time has been superlative always in the neighbourhood of 20% and above.
Though the market price is trading above both the rights issue and the public offer as some investors believed that instead of waiting for the process of allotment and the time it normally takes, why don’t they take position in the market and wait for the largesse that would attend the price of the stock after the offers.
But in all Fidelity has proven to be a good stock over time.
• What are the possibilities in NASCON and Dangote Sugar?
Since the announcement of the suspension of the business combination between this duo companies, investors have been cautious in the demand for their shares. There is the fear of whether the idea would be totally be jettisoned.
But I do not see a situation that the promoter of the two company will do that. There could be delay, just like the one we are experiencing but at the end of the day, the plan would scale through.
For those that are already in a loss position to the tune of 10% and above, it will be advised to tarry. The announcement of the suspension only go further to lengthen their waiting period.
• What are the stocks to watch?
Fidelity, Access, FBNH, Japaul Gold, UCAP and a host of others.