Ruth Ibikunle
The Nigerian stock market on Monday closed on a positive with 0.38% growth. Year to date, the market has returned 4.56% with the All Share Index and Market Capitalisation at 44,662.96 points and N24.327 trillion respectively.
In a chat with Aruna Kebira, MD/CEO of Global View Capital Limited, the Capital Market guru gave insight on the current market mood and how to make sound investment decision.
Excerpts:
The stock market opened the week on a positive note with 0.38% growth. What could be driving it?
Investors and market operators have continued to analyse and interpret the various information at the market place and the latest inflation figure to rejig their portfolios and take hedging position against the rising inflation in some stocks with high dividend yields and strong earnings to support higher payout as financial year end of many companies draw closer.
The currency redesign of the Central Bank of Nigeria (CBN) coupled with expectation of the outcome of the last MPC for the year scheduled to hold on November 21 and 22, 2022 are the yardsticks investors are using to reassess the future of the MPR hike while the Q3 GDP figure is being expected.
It is observed that investors held on to cash as in a bearish market, cash is king. This they did while they await to confirm the next market direction.
Against these backdrops, there has been an increased buy interest in most of the stocks especially the banking stocks.
It is when demand outweighs supply that we see a rise in the price of a stock and the consequential effect in the ASI and that was the case in the market on Monday.
There were only 6 Losers on Monday against 26 Gainers. Can we say the bull is back?
The presence of the bulls significantly is the situation that happened on Monday, but the market is expecting a bull run in the month of December, if that starts now, it would not be considered too early.
But we need to see the outcome of Tuesday trading session as a confirmation of the return of the bull.
If what happened on Monday repeats itself as a confirmation on Tuesday, we can then say that the bull is back.
What is driving the price of Nigerian Breweries, NEM Insurance, PZ and Cadbury?
Remember that the corporate affairs commission (CAC) gave all public limited companies up until december 31, 2022 to either allot their unissued shares to the existing shareholders as bonus, offer then to the public or as rights issues to the shareholders.
nigeria brewery elected to give theirs to the shareholders in the form of bonus of 1 new share to 4 existing shares , which is a clear 25%.
In this current market we have, that was a big bang and the price has no choice than to respond to that news and the market is rewarding the price of Nigeria breweries adequately. PZ is still trading cum div of N1.01k, though its qualification date is still far into 2023, that is January 6, 2023.
This might have been the reason the stock price moved up on Monday.
Cadbury and NEM insurance movement in prices is the run of play of the market.
How attractive is Nigerian Breweries at N45.35?
Since the announcement of a bonus of 1 for 4 for Nigerian Breweries, it has gained only 20%. The qualification date is December 6, 2022. This is a stock whose 52 weeks high is n78.00 and 52 weeks low is n36.00, the stock has potential of growing its price up to n60 before the mark down date.
But remember, the stock after mark down might find its way back to the neigbourhood of n40.00
Dangote Cement is proposing share buyback in December. How will investors benefit from this?
The share buyback of Dangote Cement has been done in tranches for fairly longtime now. The exercise has always push the price upward as the buyback is at a price.
Investors who might have bought into the stock at a much lower price will definitely benefit as the pressure of the demand will definitely move the price up
What are the possibilities in Access, FBNH, Zenith, UBA, Fidelity Bank and GTCO?
It is noted that a lot of liquidity is entering into the banking sector especially in the last two weeks.
The continuation of this movement will push the prices of most active banking stocks like ACCESS, FBHH, Zenith, UBA, Fidelity and GTCO up.
The say is also premised on the fact that their q3 earnings releases were not a disappointment to the market.