Stock Market Review: November 13, 2023

Ruth Ibikunle

The Nigerian stock market last week closed on a bullish note with 0.93% growth, week on week. Year to date, the market has returned 38.24% with the All Share Index and Market Capitalisation at 70,849.38 points and N38.925 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 on a positive note with 0.93% growth. What is the outlook for the new week?

The current market has no option but to be upward and forward-looking. The quality of Q32023 earnings reports prevalent in the market coupled with the quality information emanating from issuers are the building blocks of the market, especially in November.

If you look closely, the market is targeting 71,000 points which may be achievable this week and this month.

Some stocks traded at maximum for the better part of last week and there is every possibility that they may continue as the information hitting those stocks is still very potent.

Therefore, the only direction for the market to toe this week is the green zone. But by how much would be revealed at the end of the trading on Friday.

•  Japaul Gold grew in price by 55.91% in one week and it is currently trading at N1.98. What is driving this growth in Japaul? Is it a good BUY?

In February 2018, it was reported in various media that Japaul Oil and Maritime Services Plc signed a $350 million financing agreement with Milost Global Incorporated. The financing was arranged and negotiated by Palewater Advisory Group Inc. in New York and Banklink Africa Limited in Nigeria. The funds were to be injected into the company, with a focus on its mining operations.

Sometimes in May of the same year, the management of the company announced that they were pulling out of the deal.

The talk among market participants was that it was never established that the deal got a nod from the regulators or it was registered by any regulator and the news did not break on the website of the NGX.

The realities depressed the price of the stock which hitherto rose from N0.36 to N1.06 to continue to slide and throwing a lot of investors into big loss positions.

But on November 7, 2023, Japaulgold wrote the exchange of an equity raise of N20b through special -placement with unidentified investors.

In the letter, it was mentioned that they have applied to SEC and the letter was published on the website of the NGX.

The application to the SEC and the use of the NGX website in disseminating this information gives it the much-needed reliance and relevance that any investor can take to the bank.

Apart from the news, the Q32023 of Japul Gold delivered an EPS of 11k in 2023 against 0.3k in 2022.

Little wonders that the price of the stock is yet a sort after because the price at which the private placement is to be consumed is N2.50. It closed at N1.98 last Friday.

Is the stock good to buy at this price?

What we are about to witness in Japaul Gold is quality earnings reports going forward. If the funds are made available to the organisaion and the gold deposit alluded to in their letter to the exchange is anything to go by, chances are that the price of Japulgold under N3.00 might be a thing of the past.

The moment they are now fully engaged in gold mining and their earnings continue to grow in leaps and bounds, we also know that the market is a rewarder of successes and growth, the price of the stock would be reset, and it may happen that the exchange would have to reclassify it as medium-priced stock in not-too-distant future.

•  Mecure Industries Plc listed on NGX last week at N2.96. It eventually closed the week at N3.92 with 32.43% growth. What are the possibilities in these stocks?

On November 7, Mecure Industries Plc listed 4,000,000,000 Ordinary Shares of 50 Kobo each at N2.96 per Share on the Growth Board of Nigerian Exchange Limited (NGX).

There has not been enough information concerning this stock on the website of the NGX.

But from their 2022 AFS, the company shows strong growth potential. The numbers displayed are seriously encouraging, but it may be noticed from the same numbers that there may have been a stock split during the same year which whittled down its EPS.

But in all, the stock is in the growth trajectory and if they can repeat the same feat in their 2023 AFS, it would be the stock of the future.

At listing the stock rose to N3,.25k. On the second day, the market demanded to buy units above 20m but the only supply that day was 150,000 units and on Friday, the total bid was more than 12m units and the total supply on that day was about 323,000 units.

Since the listing was by way of introduction, it therefore shows that the shares have not actually circulated much and it is still concentrated in a few hands which is a pointer that the price may rally far and above what we are seeing now.

• GlaxoSmithKline is planning to delist and PZ Cussons is buying back shares from minority shareholders: what is the fate of investors in this Companies

GlaxoSmithKline had earlier notified the general public of their intention to delist from the exchange and on November 7, wrote to the exchange of a court-ordered meeting. Which will herald the last stage to fulfill that motion.

PZ on another hand would launch an MTO to buy out the minority shareholders and that means that the stock would eventually be delisted at the end of the day.

What both portend for their shareholder is that the shareholders are going to be paid off and both payoff considerations of the two companies are over N20.00.

So, the shareholders would not be ripped off depending on at what price the two stocks are trading and also considering the price at which most investors took their positions.

But in all, there is free entry and fee exit in the market.

How attractive is FBNH and FCMB at N20 and N7 respectively?

The profiles of these two banks are rising and continue to have the potential to rise further.

I think based on the current revaluation of the exchange and its attendant positive consequences, the banks would continue to experience forward movement in their earnings and both FBNH and FCMB are not going to be exempted.

What are the stocks to watch?

Mecure, Japaul Gold, Fidelity, FCMB, Nascon and Dangote Sugar.

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