Stock Market Review: March 7, 2023

Ruth Ibikunle

The Nigerian stock market on Monday closed on a positive note with 0.14% growth. Year to date, the market has returned 8.5% with the All Share Index and Market Capitalisation at 55,605.57 points and N30.291 trillion respectively.

In a stock market review with Mr Gilbert Ayoola, a seasoned Capital Market expert, the following were discussed:

Excerpts:

The market on Monday closed on a positive note with 0.14% growth. Should we expect more this in the coming days?

The equity market started the week on a trading run and positive outlook has investors continued in their bid to reposition in fundamental stocks on good earnings.

Though the market has presumed to continue to move in the upward trend as investors patiently wait for more releases of financial reports from the banking, insurance and industrial sectors and so on.

Aside from this, the equity market remains strong on sound demands and fundamentals on account of good earnings figures, which continue to encourage further activities by market participants, despite scarcity of new naira notes hampering the ease of doing business. Even at that, investors continue to inter-trade across different sectors of the market to make possible gains and take up available profits.

What is driving the price of Julius Berger?

The price movement in Julius Berger is a result of market activities and renewed position by investors due to the low price. Also, when compared with its 50-day moving average of N24.48.

What are the possibilities in FBNH, Zenith Bank, Access, UBA, and GTCO?

Considering stocks like FBNH, Zenith, Access, UBA, and GTCO are banking stocks with prospects of good earnings and command of price appreciation with certainty of paying dividends. At the moment, most of the audited results are currently awaiting CBN approval and the final release of Corporate Actions.

Some believe that in response to the economic situation in the country, the market shouldn’t be bullish. What’s your take on that?

I want to say that the basis for any market performance is the determination of certain microeconomics indicators and activities. Therefore, so far, so good, the stock market has been challenged by continuous high inflation figures and increased costs in the consumers’ price index. But, all-in-all this, it has been absorbed by the market and it continues to thrive on strong ability of some of the quoted companies to weather the storms on the ground of efficient management, curtailing high finance cost and maintaining working capital in their businesses, coupled with their ability to declare robust earnings and dividend payments to their shareholders, which has continued to sustained and support the tempo of the market.

NGX Group Plc just released their audit report for 2022 year end. Profit after tax was down year on year by 68.93% from N2.25 billion to N698 million. Are they likely to pay dividend?

Since the demutualisation of the company and its listing on the Exchange, It has been marked with recording losses. Similar negative reports were suffered in its previous financial year, which deepened the morale of shareholders of the company due to negative performance with no dividend declaration.

So, if going by the recent reports, I doubt if it be willing to pay dividend from its reserve earnings following the negative results reported.

Oando has started trending down after the recent rally. What could be the reason?

The down trend occurring in Oando is as a result of profit taking activities by investors. Coupled with the fact that the company’s much awaited management financial accounts for 2020 and Q1-Q4, 2021 which was due to be released in February 28 has again been shifted till March 24, which doesn’t provide good basis on performance of the company causing major concerns among investors.

What are the stocks to watch?

Stocks to watch for the week includes MTN, ACCESSCORP, Fidson, Geregu, Honeywell Flour, Livestock, NASCON, Lafarge, Dangote Sugar, CAP and many others.

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