Ruth Ibikunle
The Nigerian equity market on Tuesday bounced back after sessions of losses with a marginal growth of 0.03%.
The All Share Index and Market Capitalisation stands at 54,904.68 points and N29.91 trillion respectively.
In a stock market review with Mr Gilbert Ayoola, a seasoned capital market expert, the following were discussed:
Excerpts:
The stock market on Tuesday rebounded with a marginal growth of 0.03%. What could be driving this?
The equity market rebounds after a long week of market dip as investors begin to show renewed interest on the backdrop of positive price movement in some of the equities on the exchange.
Coupled with many corporate earnings and impressive dividend pay-out for the full-year ended December 2022. Investors are looking at possible directions on how to make good profit in view of the difference sector performance on the NGX, the likes of insurance, banking, oil & and gas, and industrial goods stocks.
Also, the relative peace brought about in easing challenges faced by naira scarcity and abilities of investors to transact funds across different online money payment platforms added to the existing confidence among investors.
CBN has increased Monetary Policy Rate to 18%. How will this impact the economy and the stock market?
The impact of current CBN Monetary policy will continue to have a long term effect on some key sectors of the economy and the stock market as the government planned removal of oil subsidy, this will definitely help to reduce inflation among many things while on the other hand majorly lead to stabilise price and face of petroleum products outlook.
The food, beverages, and industrial sector will also have a positive impact as more demand increases. The banking service sector will receive a boost, leading to an increase in their transaction across ATMs, PoS, and online banking services whlle also maintaining their Cash Reserve Ratio (CRR) and Liquidity Ratio (LR) at per.
At the same time, for any business intending to borrow, it will result in high cost of interest rates and equities prices, which will slowdown business activities and a decline in economic growth in the short term.
Likewise the naira redesign and currency withdrawal limit policy will result in a sizable reduction of currency outside the bank, indicating expected improvement in the potency of monetary policy tools.
How attractive is Champion Breweries at N4.90?
The current outlook of Champion Breweries is attractive, if considering along its highest price of N5.10.
The company’s Q3 unaudited financial statement shows a growth in its performance, having reported gross earnings increase to N9.499bn from N7.082bn in the previous year and a profit increased to N1.788bn from N907.627bn.
Why is Cadbury trending down? Is it a good buy at N11.30?
The down trending price in the stock of Cadbury is as a result of investors activities due to profit taking, looking at its 50-days moving average price of N11.99 when compared with its 52-week high of N12.30 At the current price, it is a good BUY.
What are the possibilities in WAPCO and Vitafoam?
Wapco at the price of N25.95 with a recent declaration of dividend of N2 per/s in view of the current company performance is a good BUY.
Vitafoam also looks attractive at the price of N18.80 when compared with its 52-week high of N21.90.
• What are the stocks to watch?
Stocks to watch are GTCO, Dangote Sugar, Zenith, Stanbic IBTC, Lafarge Africa, Transcorp, and many others.