Ruth Ibikunle
The stock market on Thursday continued its upward journey with a marginal growth of 0.04%. Year to date, the market has returned 8.92% with the All Share Index and Market Capitalisation at 55,822.14 points and N30.409 trillion respectively.
In a stock market review with the MD/CEO of Global View Capital Limited, Aruna Kebira, the following were discussed:
Excerpts:
Dangote Cement has notified the Exchange of a new Share buy-back program. Is this likely to push the price further?
Share buyback programs help the issuer to reduce its outstanding share in issue and this in turn helps to boost the eps and consequently declared dividend.
It also helps to reduce the quantum of shares in the hands of ordinary shareholders to make a hostile takeover difficult.
Dangote Cement Plc announced to the market a new share buyback program that will exist till December 31, 2023.
Since this will last through the remaining months of the year, discerning investors would like to take advantage to cash out some profit and in so doing there would be a position taking in the stock.
And since this is going to be done via the open market the price cap of the buyback is not known and the market may substitute the 52-weeks high price as the cap.
By so doing the actions will help push the price of the stock up while this program is being executed.
Is it advisable to buy Dangote Cement within this period of dividend declaration or to leave it after this period?
Dangote Cement Plc declared N20.00 final dividend in their 2022FYE and the qualification date is March 3, 2023
The dividend declaration cum share buyback period may act as a catalyst to boost the pricing and may get to and surpass its 52 weeks. If that is true, then taking a position in Dangote Cement to benefit from the aforementioned benefit is a good decision.
MTN announced it has completed the allotment of the Incentive Shares of 1 for 20 ordinary shares to qualified shareholders. Was this fair enough?
MTN through the notice of the offer for sale of its shares to the public indicated the above condition as an incentive to investors who participated in the offer.
They should be given a thumbs up for fulfilling their promise rather than considering whether it is fair or not.
The information was available to all and was the pay-off line in the marketing of that offer, those who do not participate in the offer have no reason to consider whether it is fair or not.
MTN simply fulfilled its promise as at the time the offer was being marketed.
MTN recently raised N125 billion via Commercial Paper Issuance programme. How will this impact the earnings of the Company?
MTN operates in the telecommunication sector of the economy. There is every tendency that those having to read this write up did so via the use of data. Everything that have been done about this write up attracted the use of data.
In my elementary Financial Accounting training, I was made to understand that borrowing isn’t a sin. The only sin in borrowing is when the cost of funds is more than the return on investment.
MTN, as far as the returns on the cost of the commercial paper they have raised is in excess of the cost, great.
The only negative effect I would have been looking at is if the cost of the fund would lead to a shortfall in the earnings and thereby affect their earnings per share subsequently, anything short of that, the exercise is in order.
Now that Oando has reconciled with SEC, are they likely to declare dividends after their coming AGM?
Dividend declaration is exclusive of the Board of a Company subject to the laid down policy on dividend declaration.
Whether Oando is quarreling with SEC or at peace with them would not affect their performance and the quantum of dividends declared.
If the Company has it in its mind to declare dividend during its forthcoming AGM, it would do so and if they don’t, it would also not do so.
Their dividend declaration is not premised on their relationship with SEC.
What is driving the share price of Transcorp?
Transcorp Plc has been known to be a performer, especially in price, and the Company is yet to release its 2022 FYE results.
The market is anticipating a good outing from the Company and most probably a good dividend declaration.
The price would have been even over what it is trading now if not for the previous dismal dividend declared by the Company
Why is Conoil trending down?
What goes up in the market will come down. When the 2022 FYE result was released into the market by Conoil, the performance and the dividend sent the price skyward.
Most investors don’t wait for the price of a stock to be marked down before they begin to take their profits. It has been said that the waiting period and the rigors to collect dividends from Registrars are better avoided when you make your homemade dividend directly from the market.
The waiting for such is not beyond T-3 days.
Hence the reason the price of Conoil is trending back down, profit taking
What are the stocks to watch?
Nigerian Breweries, Presco, MTN, Guinness, Okomuoil, Flourmill