Ruth Ibikunle
The stock market on Monday closed on a positive note with 0.05% growth. Year to date, the market has returned 31.30% with the All Share Index and Market Capitalisation at 98,176.58 points and N55.536 trillion respectively.
In a stock market review with the MD/CEO of Global View Capital Limited, Aruna Kebira, the following were discussed:
• The stock market last week closed lower by 0.11%. It however on Monday gained 0.05%. What is the outlook for the week?
The investment horizon is cloudy and hazy. There is no clear-cut policy direction. The Naira rises today and falls tomorrow and inflation is on a steady climb, CBN will bring one policy today and withdraw it the next day and the environment surrounding the money market continues to be more attractive and the market is also waiting for the next MPC meeting with an expectation of another hike in rates.
All these culminated in the dampened environment at the stock market arena.
However, there is light at the end of the tunnel. If it does not come from within, it will happen from the outside.
There is a level to which the market would dip and the investors would move in to take a position, thereby reversing the current downward trend in the market.
As the market awaits the next MPC meeting, we will continue to experience mixed market closings.
• How attractive is PZ at N22?
PZ had wanted to delist from the Exchange and the shareholders kicked against the delisting price and since then nothing much had been heard or seen from the company. That is the reason why it has been on a steady price decline.
Even at the current price of N22.00, it might not be attractive to discerning investors because you don’t go about catching falling knives. It is injurious to investment
• What are the possibilities in NASCON and Dangote Sugar?
While the market awaits the reapplication of both companies to the SEC, discerning investors are buying into the stocks piecemeal. The lower the prices, the better for the investor for unless the business combination is called off, there is a strong hope for the two stocks.
My people once said that you do not know who would sleep closest to the wall until everyone has gone to bed.
• Nigeria’s inflation rate has risen to 33.69%. How would this affect participation in the stock market?
Inflation doesn’t have a direct impact on the market.
When the figures keep increasing, finding a solution would be an onus on the CBN. But the solution of our CBN is to contract the money supply in the system. And one of the ways they can do that is to encourage savings and discourage borrowings, by hiking interest rates.
The hike in interest will now make the money market more attractive than the stock market. The investors who constantly seek better yields for their investment would naturally drift to the money market by selling their assets in the capital market to cover their position in the money market. By that, the capital is depressed.
• What are the stocks to watch?
Nascon, Zenith, Access, Dangsugar Transcorp, Tantalizers, and a host of others