Ruth Ibikunle
The Nigerian stock market last week closed on a positive note with 0.48% growth. Year to date, the market has returned 31.16% with the All Share Index and Market Capitalisation at 98,070.28 points and N59.425 trillion respectively.
In a stock market weekly review with the MD/CEO of Globalview Capital Limited, Aruna Kebira, the following were discussed:
Excerpts:
- The market last week closed on a positive note with 0.48% growth. What is the outlook for the new week?
The expectation of robust and quality Q32024 earnings results is high in the market arena. A reflection of the numbers that issuers released for Q22024 is a reference point.
On the other hand, we have noticed some tractions in the prices of the SWOOT stocks, which to a large extent explained what happened last week, we are also expecting a continuation of that traction even this week as the week is the penultimate week to the end of the month of October.
Against all odds, I can see the market also closing in the green region this week.
- What is driving the growth in Transpower, Mecure, and Dangote Sugar?
Transpower has been in limbo, after the initial rally, for fairly a long time. The price was brought down from over N300 and it traded at N280.00.
Transpower from an analyst’s point of view possesses superior fundamentals to that of Geregu. Geregu is currently trading at N1.150.00. The market is a rewarder and a discounting factor, it is a matter of time, before the price of Transpower either levels up with that of Geregu or surpasses it.
The activities in the stock and the traction in it this week will be a determinant of the clear direction.
Dangsugar may be receiving attention and the market can interpret that the friction in the pms pricing between Dangote Refinery and the NNPCL has been laid to rest.
The man will now have a clear head to organize himself and get on track with what he has started in the business combination of Dangsugar, Nascon, and Dangote Rice.
Chance is, that there is already a move in that direction.
· Aradel Holdings was listed on NGX last week. Is it a good buy at the current price of N625.4?
The listed price of Aradel did not meet the expectations of the general investors. The first notice of the listing of the stock on the NGX revealed that it would be listed at N469+.
Traditionally, when there are sensitive activities in a stock, such stock is suspended from trading. But Aradel was allowed to continue to trade on the NASD OTC up until the Friday precedent to its listing on the NGX.
Investors felt cheated and considered the stock overvalued. At listing, Aradel’s capitalization was higher than that of Seplat, so as far as analysts are concerned the stock was overvalued.
Like the discounting factor and rewarder of performance that the stock market is, it has started the correction in the pricing of Aradel
Whether the price is attractive at N625.47 is a matter that only the market can determine now as a new listing. But nobody would want to catch falling knives.
If it has the tendency to rebound, a lot of investors would jump at it, but the question at this time is ‘Who will bell the cat’?
- How attractive is Oando at N77?
From the grapevine, Oando is set to celebrate its 30th anniversary. At most celebrations the host always wants to surprise the guests with presents and what have you.
We saw in 2013, the company released three earnings reports. Q42012, Q12013, and Q22013 and surprised the market by declaring a final dividend of N0.30 for Q42012 and N0.70 interim for Q22013.
History has a way of repeating itself and if that comes true, be rest assured that the price of the stock will break the N100.00 mark.
- Nigeria’s inflation rate grew to 32.70% in September 2024. How would this impact capital market participation?
The attendant consequences of the growing rate of inflation are what the stock market has been contending with since the beginning of the year.
The slowdown we saw in the months of July and August in the inflation figures was just a dead-cat-bounce situation. The continuous upward review of the pump price of pms would not allow inflation to moderate and the incessant growth would lead to an increase in the cost of production and transportation which will in turn affect the cost of food items.
Inflation erodes people’s purchasing power.
Income is either consumed or saved and aggregate savings is equal to aggregate investment, so we were taught in elementary economics.
But the plight of an average Nigerian now is how to grapple with the ever-increasing price of feeding to the extent that savings are now zero. Income is now being fully consumed.
In that vein, investible funds have greatly depleted and that would of a necessity have a negative impact on the liquidity in the market arena.
- What are the stocks to watch?
Transpower, Fidelity, Wapic, Oando, Tantalizer, UBA, Access, and a host of others