Stock Market Review: June 19, 2023

The stock market last week closed on a positive note with 5.49%, bringing the All Share Index and Market Capitalization to 59,000.96 points and N32.126 trillion respectively. Year to date, the market has returned 15.12%.

In a stock market review with the MD/CEO of Global View Capital Limited, Aruna Kebira, the following were discussed:

Excerpts:

The market was bullish last week with 5.49% growth. What is the outlook for the new week?

The market responded to the actions in the news, the suspension and consequent arrest of the CBN governor and the EFCC Chairman coupled with the liberalization and unification of the exchange rate.
On Thursday, June 15, 2023 the market witnessed a tumult of sell pressure occasioned by profit taking and the actions of bargain hunters.
Most stocks moved to establish their new 52-week high prices, therefore profit taking was inevitable.
Be that as it may, in as much as the information responsible for the rally is still prevalent at the market arena, the market has only one direction to toe, that is, forward.
Mr. President is seen by the market as being on the right course in his administration as every of his pronouncement is received in the market with much enthusiasm.
I foresee the market and nay, the prices recovering to the new 52-week high prices they set for themselves on Thursday last week. Since they were able to touch them, they can touch them again the second time.

• How sustainable is the growth seen in most of the stocks that rallied last week?


After the rain come sun shine, after stocks prices established new 52-week high prices, owing to the experience of 2006-2009, most investors moved to realise their profits.
That is not to say that the profit taking would stagnate prices, no. As far as the incumbent government is seen toeing the much-needed path to economic recovery, these prices we saw on Thursday would be reattained and sustained.
It might not be immediately this week, but mark my word, as they have tested that height, they will get back there and surpass them even if it is by a fraction.

• What is driving the growth in FTN Cocoa? How attractive is the stock at N1.35?


The price of this stock since the company was able to obtain a convertible loan of USD6,350,000 (Six Million Three Hundred and Fifty Thousand United States Dollars) from OH Ecosystems LLC has been on the march upwards. Waking up from a price of 25k to 1.35, that is a whopping 428% capital gains.
The market believes that the facility will provide the required working capital and enough for productive activities that would snowball to a better bottom line for the company and the shareholders.
At N1.35, it is only the market that can tell the next direction of the stock price.

• What is the best entry price for Zenith and GTCO?


The best entry price of Zenith and GTCO would have been at their 52-week low prices of N18.90 and N16.80 respectively but the next best entry prices is where they are trading now.
As far as it has been established by the market that the two stocks are both value and growth stock, and also for the fact that nothing has changed from the current information at the market arena, these two stocks would continue to look forward.

• Insurance Companies were also part of the rally last week. How attractive is that sector?


Last week rally was a market wide rally as the information available at the market place was not limited to any sector. It was an economy wide information and therefore nearly all stocks were affected.
We saw the likes of Omatek and Deap Capital appearing after along while on the top gainers list.
Therefore, the Insurance sector would not have been exempted.

• What are the possibilities in Access, UBA and FBNH, Presco and Okomu


These stocks having established new 52-week high prices and witnessed a pullback during the course of last week, it would be a good to go action taking position in them at the current market prices.
Mr. President has not finished with his surprises yet and the market would continue to respond positively to any of his action.

• What are the stocks to watch?


Wapco, MTN, Nigerian Breweries, Fidelity and FCMB

Source: Stock Market Review: June 19, 2023 – StocksWatch (stocksng.com)

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