Ruth Ibikunle
The Nigerian stock market last week closed on a bearish note as it declined by 3.27%. Year to date, the market has returned 32.07% with the All Share Index and Market capitalization at 98,751.98 points and N54.035 trillion respectively.
In a stock market review with the MD/CEO of GlobalView Capital Limited, Aruna Kebira, the following were discussed:
• The stock market last week closed on a bearish note, shedding 3.27%. What is the outlook for the new week and the month of March?
Last week was characterized by losses from the SWOOT stocks. The earnings reports of Nestle and MTN were badly hit by the unification of the exchange rate and left large holes in their financials to the extent that for a very long time, Nestle and MTN did not declare any dividends.
The market is a discounter, in reflecting the information fully in the price of the stocks, they trended down.
The market made efforts in the week to close in the green but the pull from the high-cap stocks overwhelmed the gains in much less capitalized stocks.
With the news surrounding Transcorp Plc and Transcorp power and the rebound of the market during last week, the market will most likely close in the green zone.
The first full trading week of March and the last month of the moratorium period from the NGX to issuers concerning the release of their AFS, early bird earnings releases will begin to tumble in this week and that might change the whole narrative and the market trajectory.
• How would you rate the performance of Audited Reports released so far?
The AFS that have been released so far have been mixed, with the big caps especially those exposed to the dollar coming in with huge losses. But that is not to say that they have charted the way for all others to go.
I believe we will have more issuers coming with sterling performances than those with lackluster performances.
• What is driving the growth in PZ despite the information that they will soon delist from NGX?
The shareholders in PZ despite the fact the company is in the process of delisting from the NGX will be paid the delisting price. As far as the market price is trading below the delisting price, investors will continue to see value in the stock. They will want to take it at the market price and get paid at the delisting price and make a spread.
We have different types and classes of investors in the market with different outlooks and investment objectives.
Most investors will continue to stay with the formula that has always won for them, that is why the market is very unpredictable, because is a reflection of the aggregate actions of market participants.
• Why is MTN trending down? How attractive is the stock?
MTN suffered a very huge loss from the effect of the dollar rate and consequently, every speculator in the stock wanted to get out at a much considerably higher price.
Some are exiting because they were unable to declare a dividend.
But I tell you one thing, MTN has fundamentals, what happened to them in 2023 is an “ill wind that blows nobody good”. They sure will overcome it and the price shall only be depressed to this level in the very short run.
• What is the best entry price for Nestle?
In the bad market of 2015-2016, Nestle came down to N500.00 But I doubt whether the stock can ever come to that price again. This is not premised on any other factor but the shareholding structure of the company. 100,000 units of the stock is not commonplace and those who have such will not sell especially after they have been in the stock when the price was N40
If any new investor sees the price near N500, it means it is time to dive headlong into the stock, because that would even allow the parent company to increase their holdings.
• What are the stocks to watch?
Transcorp, Transcorp Power, Dangote Cement, BUA Cement, AIICO, and a host of others.