Ruth Ibikunle
The Nigerian stock market last week closed on a bullish note with 0.50% growth. Year to date, the market has returned 30.69% with the All Share Index and Market Capitalisation at 97,722.28 points and N59.215 trillion respectively.
In a stock market review with the MD/CEO of GlobalView Capital Limited, Aruna Kebira, the following were discussed:
Excerpts:
- Last week, the market closed on a positive note with 0.50% growth. What is the outlook for the new week?
The market has begun to reflect the impact of the Q32024 earnings releases and both public and non-public information in the market arena.
We saw the upward swing in the price of Flourmill on the back of a reversed delisting price, UCAP is also holding out its own in defiance of the effect of the dilution of outstanding shares by the crediting of the 2-for-1 bonus.
Aradel also rose from the ashes and is trading in a more comfortable zone. The banking stocks are also not left behind as the market continues to interpret that for any economic policy, the banks are there to drive and would be the net beneficiaries at the end of the day.
It is expected that bearing all other shocks and circumstances, the market will continue to look up as it is preparing for the Santa Claus rally.
- What is driving the growth in Tantalizer, Sunu Assurance, and Flourmills?
Tantalizers released their quarterly results where they announced changes on their board and the entrance of strategic investors like Food Specialties and Organics Limited. A food company based in the United Arab Emirates and Banklink Africa Private Equity Limited. A private equity firm, these two companies acquired a majority stake in the company through a private placement valued at N1.07b
The hope of a good turnaround as a result of these events is driving the price of the stock up.
It has N0.89 as the 52-week high price and would open the market at N0.82 today. Whether the news can propel the price to set a new 52=week high price would be revealed at the end of the week.
Flourmill announced its intention to delist from the bourse at a delisting price of N70.00. The price did not go down well with the investors and this price was later adjusted to N86.00 to incentivize the minority shareholders.
As at the time of the announcement the price of the stock was somewhat far below the delisting price. Like the market is known as a discounting factor and a rewarder of good gestures, the market is moving to reprice the stock.
- Oando closed lower at N62.65. Is it a good buy? What is the best entry point for the stock?
The story of Oando has always been likened to an Abiku or Ogbanje. The company and the stock, though bereft of corporate governance and having serious trust issues among investors, have rewarded those who dare to dive in handsomely in the recent past.
The much-expected Q42023, Q12024, and Q22024 were released to the market with a lackluster performance.
Trading at N62.65, you could be surprised by the kind of information that would emanate from the company that would reverse the price.
Oando can make or mar an investor depending on how he or she can hold out when the chips are down.
But the price may be considered an entry point for those whose time horizon is in the distant future and who can swallow bitter pills.
- Dangote Cement intends to raise additional funds via bond issuance. How will this benefit existing shareholders?
The issue of corporate bonds by any issuer is not a factor to impact the price of a stock in the immediate terms. Bonds and commercial papers are means of funding and capital formation for corporate bodies. It is not a sin to borrow to do business, it only becomes a sin when your ROI is less than the cost of capital.
The company has been involved in these activities in the past and has always made good investor position at the end of each tenor.
- Inflation rate increased to 33.88% in October from 32.70% the previous month. How will this affect capital market participation?
Increases in the inflation figure are no more a shock and surprise to the market and investors at large.
The increment may not typically hold the stock market to a Ransom but would be noted. The impact, if felt would be ephemeral.
- What are the stocks to watch?
Tantalizers, Ecobank, UCAP, Access, Fidelity, and a host of others