Transactions on the floor of the Nigerian Exchange on Wednesday closed on a positive note with 0.95% growth. The All Share Index and Market Capitalization stands at 52,097.62 points and N28.367 trillion respectively. Year to date, the stock market has returned 1.65%.
In a stock market review with the MD/CEO of Global View Capital Limited, Aruna Kebira, the following were discussed:
• The stock market on Wednesday again grew by 0.95%. Can we say the Bulls are back?
Barely a month before the formal inauguration of a new government and the official swearing-in ceremony of the President-elect, we cannot expect anything less in the market.
Market performance in the past days has moved to confirm the return of the Bulls to the floor.
We saw yesterday the reversal in the price of Total almost back to the pre-marked down price.
Alongside were stocks like Cadbury, Transcorp, and Honeywell Flour to support the push in the ASI.
We should be expecting a more vibrant and thriving market ahead of the swearing-in ceremony of the new government.
• What is driving the prices of Academy Press, Livestock Feed, Total Energy, Cadbury, and Honeywell?
In price determination, performance takes centre stage. If you look closely, what is common to these stocks is their performances, whether past or present.
Livestock Feeds Q1 2023 is positive from a negative position in Q4 2022. Honeywell’s Q4 is around the corner and a good representation is expected. Though Honeywell and Flourmill have the same year-end Honeywell comes cheaper than FMN, therefore the force is likely to hit Honeywell first before extending to FMN
Cadbury made a huge turnaround in Q1 2023 by declaring a 124% growth in their PAT. And the market has moved to appreciate the stock in that regard.
• Transcorp is climbing towards N3. Is it a good BUY at N2.95?
Transcorp has become the bride with the golden chain every investor would want to court. After the last news of Otedola’s acquisition of a 6.3% stake in the company, there was an off-market trade on April 25 of over a billion units at N2.45k by United Capital Securities and over five billion units on April 26, at N2.45 by the same United Capital Securities as the buyers and sellers.
These acts have heralded that the battle for the soul of the corporation has just begun. The winner will be seen by all in the coming days.
Meanwhile, as these acquisitions are being made, the outstanding shares of the corporation are being mopped out of circulation and thereby creating scarcity. In the laws of elementary economics scarcity normally leads to an increase in price and that is what we are currently seeing in the price of Transcorp.
It is also believed by the investor that if these volumes are being sought after by these two captains of industry, then there is a hidden value in Transcorp that is waiting to be unlocked.
It traded one billion plus on April 26 and an unsatisfied bid in the neighborhood of five hundred million units.
The investors are justling to have a piece of the action to change the mantra of “where two elephants fight” …This time around the grasses will certainly enjoy it.
• BUA Foods has declared a final dividend of N4.50 for the 2022 year-end. How attractive is the stock at N102?
At the price of N102 and dividend declaration of N4.50, the dividend yield for BUA Foods would be 4.4% and we have better yields on the floor. Consider Access N1.30 dividend at N10.35, which is 12. 5%. Speculators and discerning investors would rather go for a better yield.
• What is driving the price of Airtel?
Airtel Africa’s price was punished by the market while investors were moving their funds from it to pursue stocks that declare dividends as its financial year end is March.
Now that most dividends have been marked down while some have been paid, investors are considering the cheapness and value of Airtel Africa. Remember its 52-week high is N2,040 while its 52-week low is N1,198.00 and that is where it rises from.
The quality of its final result will now determine to what extent it can rise further.
• Why is Fidelity Bank trending down?
When results were being expected, investors took positions in stocks they believed would perform and one of such is Fidelity.
But as we speak, they are yet to release their Q4 2022. Stock speculators have no time to waste. As there are possibilities in Transcorp, Cadbury, MTN, and Total, they are moving their resources from Fidelity to other avenues for good yields.
• What are the stocks to watch?