As investors await the prospective acquisition by Olam, Dangote Flour, subsidiary of Dangote Industries Limited, leads the Nigerian equities market in returns as the manufacturing giant has tripled its market value over the last 9 months.
A Dangote Flour investor in January would have purchased a share at N6.85 at the beginning of the year and 9 months after, his investment would have appreciated by 224.09 percent as the company’s stock price closed at N22.2 on Friday.
Other than the Flour manufacturer, Cornerstone Insurance and Thomas Wyatt complete the top three companies with the highest return since January. Cornerstone Insurance has recorded a 130.00 percent as the share price has risen from N0.2 in January to N0.42 at the end of Friday’s trading session to come in second to Dangote Flour. Thomas Wyatt completes the top three with a 65.22 percent gain year to date.
Obinna Uzoma, Chief Economist at EUA Intelligence explained that, “A market rise is expedient for CornerStone Insurance owing to a vote of confidence by investors who anticipate a decent financial performance next year. The company’s willingness to maintain the recapitalization requirement has bolstered investor confidence and the market is appreciating of the fact.”
B.O.C Gases was the fourth best performer recording gains of 45.37 percent YTD, while MTN (39.39%), John Holt (38.64%), Caverton Offshore (25.00%), Union Bank (25.00%), Lafarge Wapco (20.48%), Trans-nationwide (18.46%) complete the top ten best performers.
Read Also: Dangote Flour, Cornerstone, MTNN top as equities gain N267bn in quarter three
The Nigerian stock market breadth of 0.24 since the beginning of the year reiterates the bearish perception towards Nigerian companies. Market breadth is used in technical analysis to gauge the general direction of the stock market based on all traded stocks. Only 24 stocks on the bourse has returned positive gains since January as against the 100 companies with negative returns while 40 had remained unchanged.
“Apart from the possible Santa rally in December, the equities market might continue its bearish trend, maintaining its low double-digit negative trend well into the last month of the year.” Uzoma added.
The five worst performers since January are GlaxoSmithKline (-50.69%), Guinness (-52.15%), International Breweries (-58.69%), Resort Savings and Loans (-60.00%) and GoldLink Insurance (-62.26%). The stock market closed at 27,589.79 index points t of Friday. Year to date, the All Share Index is down 12.21 percent.
