Stock Market Review: November 14, 2022

The stock market last week continued its southward journey as the All Share Index and the Market Capitalisation declined by 0.68% to close at 43,968.75 points and N23.949 trillion respectively.

In a chat with Mr Gilbert Ayoola, the capital market expert shed light on the current market mood, market possibilities and stocks to watch.

Excerpts:

•             The market was down last week by 0.68%. Year to date it has returned 2.93%. Is there a possibility that the market will close this year on a positive note?

Judging from performance of the market last week, the market has remained low due mixed reaction of some quoted companies with price having to up and down, occasioned by profit taking thereby closing the market on a negative note.

Majorly a lot of this action have been attributed to investor interest to profit taking though few of the quoted companies on the exchange have shown improved earnings based on their Q3 release results indicated, thereby indicating better performance compared to previous year earnings, such companies like Zenith, GTCO, Access, FBN Holdings, Nigerian Breweries, Presco to mentioned a few.

At present, the stock market still indicates a renewed strength for investors to key into some stocks with sound fundamentals considering their low prices, knowing that some of the are trading below their 52 weeks low. Going by this, the market will still continue to persist around this sentiment of mixed reaction knowing that it’s pre-entry period to the country election year where available fund and spending will be focused around politics and electioneering process.

•             Should we expect the bull any sooner?

Not in any near for now simply because the market will continue to experience a mixed reaction. Even when the market turn out positive;  apparently because of some companies that declares interim dividends, profit taking by investors will continue to bottom down the all share index in terms of numbers.

•             When should investors start taking position ahead the yearly dividend?

Investors can start to position from December till around March 2023, when most of the companies, particularly those having 31 December as their year-end.

So from April there results will begin to hit the market. But for investors who have entered the market much earlier, when the price rally start picking up, there will better be of advantage to enjoy price appreciation.

•             Unity Bank gained 35.71% last week from 42 kobo to 57 kobo. What is driving the price upward? Is it a good BUY at 57 kobo?

Unity Bank Plc has posted gross earnings of N27.6 billion for its 2022 half-year results, representing a growth of 17% year-on-year while at same time  grew its PBT by 23% to N1.8 billion from N1.5 billion in the corresponding period of 2021. And PAT equally increased by 23% to close at N1.6 billion from N1.382 billion in half year 2021.

This indication and number shows that the company is gradually improving its performance and  growth trajectory. It is beginning to show sign of stability. So, judging by this number, if sustained it will impact the bottom line of company for better result. For any investor looking in the direction of the company can position for short to medium term based on the performance of the company.

• Geregu Power moved to N130.2 from N120 last week. What is driving the price? Is it a good BUY?

Company listed at N100 now N130, is an indication that bargain hunters are beginning to identify the huge prospect into the company, knowing that it is the only power transmission company fully listed on NGX for now, and the potential it tends to offer to Nigerians within its sector. Added to this is that the company had successfully completed raising additional fund corporate bond issuance of N40bn towards its expansion drive and continued operation. If judiciously used, all this will help to move the company’s bottom to topline for better profitability and likewise attract foreign investors.

For any investor, it is a good BUY knowing that it’s a stock worth investing for the future.

•             Guinness has dropped to N74.65. Why is it trending down? How low can it get to? What is the best entry price?

This is pressured down due to activities of profit taking. Though, recent performance of the company have been impacted by high cost of operation and poor ability to grow earnings. But if considering the company’s 52-week high at N110, it’s still a stock for consideration despite drop in price.

•             Flour Mills dropped to N27.30 last week. Is it a good BUY?

The company’s Q2 performance have continued to show strong drive in key areas of operation and production. However, the current price has continued to pressure down the activities of profit taking considering its 52-week high of N41.45.

•             Ecobank is yet to release Q3 2022 result. Could this be the reason why the price is trending down? Is it a good BUY at N9.50?

Presently there’s not much activities and news surrounding the company, more so that investors are awaiting the release of Q3 2022. We all know that most market thrive on information, it has further pushed the price to what it is, knowing that the company’s price was at its 52-week high N11.30. At the current price it’s attractive for any investor waiting to consider for renewed position entry.

•             What are the possibilities for the week?

Investor should remain positive in their outlook and buying position into profitable companies with good fundamentals, though activities of the market will still be low judging by investor sentiment even when it look attractive and financial numbers which remains good on account of their business performances.

•             What are the stocks to watch?

Investors should watch companies like Zenith Bank, Airtel Africa, Presco, Okomu, Transcorp, United Capital, Access, FBN Holdings, Seplat and GTCO.

Source: Stock Market Review: November 14, 2022 – StocksWatch (stocksng.com)

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