Ruth Ibikunle
The stock market last week closed on a positive note with 0.17% growth, week on week. Year to date, the market has returned 38.98% with the All Share Index and Market Capitalisation at 71,230.48 points and N39.172 trillion.
In a stock market review with the MD/CEO of Global View Capital Limited, Aruna Kebira, the following were discussed:
Excerpts:
• The market last week closed last week on a positive note with 0.17% growth. What is the outlook for the new week?
The market would continue to be upward looking to the end of this year.
The lot that has worked in the favour of the market, sterling quarterly rendition of quarterly results from the issuers, and quality information emanating from the market are still very much around to end the year with.
Based on that, I believe the market would still close the week and the month in the green zone.
• Mecure gained as high as 60.73% in one week, closing the week at N9.21. Is it a good buy at the current price?
Mecure listed 4bn units of its share on the exchange by way of introduction. The pattern of supply we have seen in the stock is such that would make the price rally for a considerable length of time.
According to sources, out of the 4b units listed, about 98% of them are in the hands of the original investors that would not sell, therefore what is available to exchange hands in the market is low.
In elementary economics, we know that scarcity leads to an increase in price and that is what we have seen in the movement of the price of Mecure.
The Q3 2023 earnings release to the market was also not bad, with an EPS of N0.50, a PE ratio 0f 11%, and an earnings yield of 8.7%.
With the exit of Glaxo from the market and Fidson taking a position to be the leader in that market, Mecure is also trying to struggle and make its impact felt in the industry.
• What are the possibilities in Nigerian Breweries and Academy Press?
Nigerian Breweries in Q32023 suffered a setback in their financials as a result of the reclassification of the exchange rate. It ate deep into their operational results and the market drove it down to N36.50.
But it is a stock well known to the market and still the market believes that this phase will soon pass, the market is holding on to the stock at a price between N36.50 and N42.00.
When all the dust of the economic reengineering by the current administration has come to settle, NB will rise from the dust and take its place in the market.
• Nigeria’s GDP grew by 2.54% in Q3 2023. How can this figure improve participation in the capital market?
GDP growth is a measure of the performance of the economy at a particular period.
The growth is an indication that things have not actually gone awry and the way every average Nigerian is thinking. It is a hope rekindling output.
It measures the welfare of the citizens and the growth shows that when all the other necessities are met, the next destination is investment, and out of the available investible funds, a percentage would look in the direction of the capital market.
• What are the stocks to watch?
Japaul Gold, Dangote Sugar, Nascon, FCMB, Fidelity, Transcorp and a host of others