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Focus shifts to Q3 earnings as companies disclose ‘closed periods’

Focus shifts to Q3 earnings as companies disclose ‘closed periods’

Investors have shifted their attention to the state of third quarter (Q3) financials which listed companies will be approaching the Nigerian Stock Exchange (NSE) with in few weeks to come. This comes as equities price deterioration makes investors look towards dividend yields.

In show of the fast-approaching Q3 earnings season, companies are increasingly publicising the “Closed Period” for transaction in their shares which is required to prevent insiders trading ahead of public dissemination of their financial results.

In line with the post- listing requirements of the Nigerian Stock Exchange for quoted companies, the Board of Directors of United Bank for Africa Plc will meet in Abuja on Thursday, October 17, 2019 to consider, amongst other matters, the Group Unaudited Accounts and Financial Statements for the Third Quarter (Q3) ended September 30, 2019.

In the same vein, the Board of Directors of Gtbank will meet on October 16 to consider the group’s unaudited account and financial statements as at September 30, 2019. The closed period for trading in the shares of the bank commenced on September 30.

Likewise, the Board of Directors of Access Bank Plc will meet on October 25 to consider and approve the bank’s unaudited Q3 financials for the same period to September 30. In line with the post-listing requirements of the NSE, a closed period in respect of transactions on Access Bank shares is from October 1.

On October 29, the Board of Directors of Transnational Corporation of Nigeria Plc (Transcorp) will meet to consider among other things the unaudited financial statements of the company for the Q3 ended September 30, 2019. Its closed period commences on October 14 until 24hours after the release of the company’s Q3 results.

With some largely capitalised companies seen recording significant capital appreciation lately, analysts expect portfolio rebalancing activity in early part of this month to spur buying interest in the market.

Their optimism comes despite that drought of positive news dampened investors’ appetite for shares of listed companies in September.

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“We expect the market to remain pressured given global risk- off sentiments and weak domestic participation. Nonetheless, we note that valuations remain attractive while price deterioration has resulted in expected dividend yields on some stocks rising significantly to levels on par with yields on Treasury Bills. Hence, we advise that long-term investors consider appropriately timed investments”, said research analysts at Cordros Capital.

While stock buyers factored in risk-off sentiments in the global economy, as well as macroeconomic and structural issues in Nigeria, the 21-day trading period in September witnessed a mix of bargains and profit taking which resulted to only N60billion in gains.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) gained 0.38percent last month which helped moderate record negative returns year-to-date (YTD) to -12.09percent.

“The bearish sentiment in the market is expected to continue as there are no major catalysts to boost investor confidence, although we see opportunities for bargain hunting”, said Afrinvest research analysts.

While noting that the Nigerian market is currently not for the nervous, Afrinvest analysts said they expect the Index to continue to wander within the negative territory.

“But why are we pessimistic? All indicators strongly suggest there are no possible triggers to herald a rebound in the near term.

“In line with recent trend, the Negative Directional Movement Index (-DMI) still outstrips the Positive Directional Movement Index (+DMI) and continues to display a superstrong ADX (Average Directional Movement Index), indicating the NSEASI’S reluctance to rise to glory,” the analysts stated further.

The NSE ASI had opened the review month at 27,525.81points but it stood higher at 27, 630.56points as at September 30, 2019. Also, the value of listed stocks moved up from September open level of N13.391trillion to N13.450trillion as at September 30.

The local bourse closed the last trading session in the third quarter (Q3) of 2019 in the red as sellers took profit on gains made in preceding week. This happened despite the late rally seen on Monday September 30 in the shares of Nestle Nigeria Plc (3.71percent), Total Nigeria Plc (7.92percent), CAP Plc (9.89percent), Gtbank Plc ( 5.80percent) and Dangote Cement Plc (0.53percent).