The stock market last week closed on a bearish note, shedding 0.11%. Year to date, the market has returned 31.36% with the All Share Index and Market Capitalisation at 67,324.59 points and N36.847 trillion respectively.
In a stock market review with the MD/CEO of Global View Capital Limited, Aruna Kebira, the following were discussed:
• The market closed lower last week by 0.11%. What is the outlook for the new week?
The mood of the market is generally determined by the mood of the economy.
There is haze and mist in the economic atmosphere that the market is responding to. The marginal losses we have been seeing these days are a pointer to the strong current market. Hence, we would have been seeing losses in the neighborhood of 100 basis points.
Notwithstanding, the loss of 8.49% in Dangote Cement on Friday, September 22, and as one of the SWOOT stocks charted the course for the market’s direction last week.
It is common for Dangote Cement to recover quickly after such a loss, so if that is true for this week, there is every likelihood of the market looking northwards.
Nevertheless, I am still optimistic that the appointment of a substantive CBN governor will add fervor to the market and may just be the next external stimulus the market needs to further push above the all-time high ASI figure of 68,000 points.
• Oando touched N14.60 last week but eventually closed the week at N11.85. How low can Oando get to? Is it a good buy?
I know many people have made a kill in the recent rally in the price of Oando, but the fact remains that the stock has no fundamentals.
For speculation, fine especially if you know your onions in that art, but if not, just take a seat, watch, and wait for what would happen to the stock, to avoid stories that touch.
There are so many controversies surrounding Oando. A stock that did its IPO at N97.00, did the right issue for N22.00 and wants to delist from the market at N7.07. This is a stock that rose up to N36.00 on the back of the news of its acquisition of ConocoPhillips assets
Firstly, they wrote to the NGX of their intention to delist at N7.07, next there is a case concerning that in the court.
Secondly, they released their 2021 FYE earnings report in September 2023, purporting to have come out of their loss-making. Again, the auditors came to warn about the level of the gearing they noticed in the report.
They claimed they bought 100% of Eni Agip assets, again, NNPC came and said if that claim is true, it would lead to contractual /legal implications.
And the price of such stock began to gyrate and the market repriced it from about N7.00 to N14.60, a hundred percent jump.
My people once said that the thing that shakes the shrubs in the bus would one day come to the road.
Whatever non-public information, if there exists, about Oando that is making the price rally, would be made public one day, then I will now decide whether is a good buy for me or not.
• Why is Dangote Cement trending down?
The behavior of the prices of stocks is highly premised on the information available at the marketplace.
Peradventure an aggressive and desperate seller who needs to fund a position that may not be delayed beyond a certain date may have to sell at any price and we know that the moment there is a board lot, the price of a stock changes.
And Dangote as a member of the SWOOT, a board lot of 100,000 units is not a common place.
• Sunu Assurance hit N1.05 last week from 79 kobo. What is driving this growth?
Sunu Assurance according to their H12023 earnings report grew their PAT from N55.053m to N2.143bn which represents 3792% growth. Their eps grew from 0.6k to 36.5k which represents 5,983%.
The market is a rewarder of performance, from any angle you may look at the report, whether it was because they were able to control their cost elements or there was growth in their turnover, the market would perceive this type of growth as sterling.
Hence the rally is the price of Sunu Assurance.
• How attractive are banking stocks
The banking stocks, except Access Corp, have shown the market a sneak peek of what the investors should be expecting as final dividends.
The recent H12023 interim dividends declared by some banks are unprecedented, and their earning per share is robust enough to support the quantum of the dividends declared. And because the banking stocks have always been growing, the market is confident that they would also grow and if that is true, there would be corresponding mouth-watering final dividends following.
• What are the stocks to watch?
Dangote Sugar, Nascon, Transcorp, Fidelity, Fidson and Wapco