• Tuesday, October 03, 2023
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Here’re stocks investors have made money this year

NGX Regulation Limited (NGX RegCo) has released the “Code of Conduct for Approved Persons of Trading License Holders” of Nigerian Exchange Limited (NGX), in keeping with its commitment to promoting high professional standards and ethical conduct within the capital market.

Some listed stocks on the Nigerian Exchange Limited (NGX) have impressed investors this year despite that the market has witnessed mixed sessions of bargain hunting and profit taking activities.

While the equities market closed the week ended Friday May 26 with positive year-to-date (YtD) return of 3.36 percent, performance data showed even some stocks that have far outperformed the market with over 100percent return.

Topmost on the list are stocks like Tripple Gee which has risen this year by 393.67percent, followed by that of International Energy Insurance which rose by 239.47percent, according to market data as at Friday May 26.

Other stock investors have made money this year are MRS (+189.36percent), John Holt (+161.64percent), Transcorp (+171.68percent), Ikeja Hotel (+128.57percent), Nahco (+103.91percent), Northen Nigeria Flour Mills (+112.20percent), Geregu (+103.96percent), Conoil (+80.94percent) and BUA Foods (+80percent).

Recently, the Central Bank of Nigeria (CBN) after a two-day Monetary Policy Committee (MPC) meeting raised its benchmark interest rate also known as the Monetary Policy Rate (MPR) by 50basis points to 18.5percent while keeping other parameters constant.

“The rate hike is reflective of the Committee’s commitment to ensuring price stability in the economy. Given that the increase in rates was widely anticipated we do not expect the Committee’s decision to have a significant impact on asset prices. Structural factors impacting inflation remain unabating, thus the decision is not likely to lower inflationary pressures in the near term,” said Meristem analysts in their post-MPC commentary.

They noted that “the general expectation is for a marginal uptrend in yields. Essentially, the recent MPR hike could prompt investors to demand higher rates in a bid to narrow the negative real returns caused by the persistent inflationary pressures. However, we opine that system liquidity would continue to call the direction of the fixed income (FI) market in the near to medium term especially with the expected Eurobonds maturity ($500million) in July 2023”.

Read also: Cornerstone Insurance boss says underwriters undermining premium pricing

Meristem analysts further noted that the recently released Foreign Portfolio Investment (FPI) report by the NGX revealed that foreign participation on the local bourse hit a new low of N8.47billion (4.43percent of market activity) in April 2023.

Foreign portfolio participation on the local bourse was N9.19billion in March, February (N19.62billion), while in January it was N24.90billion.

“The continued deterioration in foreign portfolio investment reflects the foreign investor’s apathy towards the Nigerian bourse. In the near term, we expect the market to remain positive, due to buying interest on tickers that still have attractive valuations. The major downside to this is the possibility of selloffs on stocks that have recently recorded gains,” Meristem analyst further noted in their post-MPC commentary.

Other stocks that have risen remarkably this year with over 20percent returns are: Academy Press (+27.13percent), Access Corporation (+34.12percent), Berger Paints (+45percent), Cadbury (+36.97percent), Chams (+86.36percent), Cornerstone Insurance (+33.33percent), Cutix (+24.38percent), CWG (+51.49percent), Dangote Sugar (+24.61percent), FBN Holdings (+27.06percent), Fidelity Bank (+33.10percent), FTN Cocoa (+134.48percent), GlaxoSmithKline (+23.58percent), Honeywell Flour Mills (+29.91percent), Japaul Gold (+28.57percent) and Julius Berger (+28.57percent).

In the first four months of 2023, the total domestic transactions performed by investors on the floor of the Nigerian Exchange Limited (NGX) rose to N659.26 billion.

This is according to the recently released data on domestic and foreign portfolio participation in Nigeria’s equity trading for the month of April.

The prolonged FX scarcity, inflation among others have been taking their toll on the Nigerian economy and the capital market which is the barometer of the economy has seen mixed sentiments in transactions in the month under review.

Africa’s biggest economy saw its Gross Domestic Product (GDP) grow by 2.31 percent (year-on-year) in real terms in first-quarter (Q1) 2023, down from 3.52 percent in Q4 2022 and 3.11 percent in the same period last year, the National Bureau of Statistics (NBS) said recently.

“The Nigerian economy was negatively impacted by the Naira liquidity crunch of first-quarter (Q1) 2023, which had a more telling effect on the informal economy and resulted in moderated GDP growth of 2.31percent (versus 3.52percent in Q4’2022). The tamer growth is behind our projection of 2.6percent and Bloomberg’s consensus of 2.8percent.

“This outcome is also consistent with the indications provided by high-frequency data, such as the Purchasing Managers’ Index (PMI) and business confidence surveys, which pointed to a significant contraction in economic activity during the review period,” said CardinalStone Research analysts in their May 24 note.

Domestic transactions decreased by 45.30 percent from N3.556 trillion in 2007 to N1.945 trillion in 2022 whilst foreign transactions also decreased by 38.47 percent from N616 billion to N379 billion over the same period.

Furthermore, total domestic transactions accounted for about 84 percent of the total transactions carried out in 2022, while foreign transactions accounted for about 16 percent of the total transactions in the same period.

However, the transaction data for 2023 shows that total domestic transactions stood at N659.26billion, whilst total foreign transactions currently stood at N62.18 billion.

Nigeria’s domestic investors have also shown interest in stocks like Lasaco which according to May 26 stock performance data rose this year by 68.97percent.

Other counters, including penny stocks, investors have shown interest to buy are: Livestock Feeds (+28.44percent), Linkage Assurance (+30percent), Living Trust Mortgage Bank (+68.13percent), Axa Mansard (+54.50percent), Mutual Benefit (+25.93percent), Nascon (+38.74percent), Oando (+42.86percent), PZ Cussons (+48.90percent), RedStar (+28.32percent), Regency Alliance (+28percent), and RT Briscoe (+46.15percent).

Despite slowing economic growth, other stocks investors bought include: Sovereign Trust Insurance (+28.57percent), Sunu Assurance (+65.52percent), Tantalizers (+25percent), Thomas Wyatt (+34.02percent), Total (+29.02percent), Transcorp Hotel (+20percent), UBA (+22.37percent), Unilever (+24.57percent), and Coronation Insurance (+22.50percent).

As the market enters the final month of second-quarter (Q2) of 2023, market watchers anticipate this mixed trading pattern to continue while investors are expected to respond to any major take away from the inauguration of Bola Ahmed Tinubu as Nigeria’s new President.