Ruth Ibikunle
The Nigerian stock market last week closed on a bullish note with 5.37% growth bringing the All Share Index and Market Capitalization to 55,820.50 points and N30.395 trillion respectively.
In a stock market review with the MD/CEO of Global View Capital Limited, Aruna Kebira, the following were discussed:
Excerpts:
The market closed last week on a bullish note with 5.37% growth, week on week. What is the outlook for the coming week?
The news of the coming of the government of Tinubu and the euphoria associated with it is very much present at the market arena.
Despite the misgivings here and there as touching on the removal of fuel subsidies, the purported devaluation of the Naira, and the planned organize labour strike, I believe the positive news of a new government is much stronger a force than the side talks.
I see the market making steady upward movement even if the bulls are not ragging, they have come to stay for now in the market and will move at their pace and as per the content and quality of information hitting the market at intervals.
• Conoil, Eterna Oil and MRS emerged among top 5 gainers last week. Should investors start looking in the direction of Oil and Gas stocks?
Conoil has been a stock that moves only in earning seasons, therefore taking positions in the stock would have been better if it was done when all benefits have been expunged from the price of the stock and it is trading at its lowest and cheap price.
It has been noticed over time that when one is trapped in a higher price during its rally days, it may take another rally period to be able to get out at that same price, except the investor would want to cut his losses and move on. I won’t advise chasing Conoil when it is on its way up.
Though there was tremendous growth in Q2 2023 by almost 440%, which makes it attractive coupled with the fact that it is trading cumdiv, but the moment this phase is passed, the stock will become illiquid.
Eternal earnings forecast of N952m PAT, coupled with their director dealing and the 15k dividend declared have been the main attributes of the rise in the price of Eternal Oil.
At the current price, the dividend yield is about 2%, which to me is neither here nor there.
• FBNH has proposed 50 kobo dividend to shareholders for 2022 year end. How attractive is the stock at the current price of N14.25?
It is not attractive at all as the market reacted negatively to the declaration of the N0.50 dividend by the big elephant.
Coming at a dividend yield of about 3.5%, the market may move to further punish the price of the stock for not measuring up to the market expectation
• What are the possibilities in Okomu, Flourmills and Presco?
Okomuoil and Presco are stocks on their own. Fortunately, they belong to the same industry, but they have not been able to meet the demand for their products.
That is a guarantee that as they continue to increase their capacity and produce more of their products in the market, the only way to go is growth in their turnover which would trickle down to a better bottom line and those two companies are not selfish with declaration and payment of dividends.
Flourmill Q4 2023 is around the corner and the market is expecting a good outing and mouth-watering dividends.
• What are the stocks to watch?
Nigerian Breweries, Guinness, Presco, Flourmill, and Airtel Africa.