Here’re stocks that outperformed NGX-ASI year-to-date

Nigeria’s stock market has risen this year by 31.81 percent, thanks to some counters that have outperformed the market, thereby spurring this record growth year-to-date (YtD).

Oando has outperformed the market remarkably with its 686.7 percent rally this year. In the Oil & Gas sector, the stock is followed by Eterna (+116.6percent), Conoil (+100.2percent), Seplat (+77.6 percent), Total Energies (+75 percent), and Japaul Gold (+50.6percent).

The NGX trading data as at Monday September 30 also showed that RT Briscoe has risen this year by 424.6 percent, thereby surpassing all others listed on the Services sector of the NGX.

BUA Foods is leading the consumer goods sector as its share price has risen this year by 104.2percent, followed by Flour Mills (+87.7percent), and Honeywell (+41.6percent).

Meyer is leading other industrial stocks with its return of 115.9 percent YtD, while Cutix followed with 105.1 percent return. Others in the industrial sector are: CAP (+67.9percent), Dangote Cement (+66.3percent), and Berger Paints (+62.3percent).

Also looking at the Natural Resources/Utilities subsector, Geregu Power is leading other stocks, as it has risen by 188.2 percent, followed by IMG which is up 160.2 percent as at September 30. Tripple Gee which rose by 111.2 percent in nine months of this year has outperformed other stocks listed under the ICT subsector.

The Construction/Real Estate sector has Julius Berger as its lead performer. The stock has risen this year by 225.6 percent. Further look at stocks listed under the Other Financial Institutions subsector shows that Veritas Kapital is up this year by 308.1 percent, followed by United Capital (+139.3 percent), and Deap Capital Management & Trust (+110.3 percent). Cornerstone Insurance (+79.3 percent) is leading others in the insurance sector.

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For the conglomerates, UACN has outperformed others with its rally by 63.4percent. Presco has beaten others in the agricultural subsector recording growth of 151.5 percent this year; followed by Livestock Feeds (+61.6percent), and Ellah Lakes (+52.8percent).

Nigeria’s stock market has continued to defy the Central Bank of Nigeria (CBN) recent hike in monetary policy rate (MPR). In its latest push to check inflation, the Monetary Policy Committee (MPC) of the CBN surprised market participants by increasing its benchmark interest rate, known as the Monetary Policy Rate (MPR) by 50 basis points to 27.25 percent from 26.75 percent, the fifth straight hike this year.

The Olayemi Cardoso-led CBN had also raised the Cash Reserve Ratio (CRR) of commercial banks by 500 basis point to 50 percent from 45 percent, and that of merchant banks by 200 basis points to 16 percent, while keeping other parameters unchanged.

In their September 30 note to investors, research analysts at United Capital said, “Looking forward, the equities market is expected to retain its buy interest as investors cherry-pick undervalued stocks. However, fixed income biased investors are expected to lock in on current rates in the fixed income space given the sentiment that rates might have peaked.”

“We expect the equities market to retain its current posture. Additionally, the recent 50 basis points (bps) hike by the MPC would have little or no impact due to government’s tight hand to increase yields at the fixed income and money markets. Notably, the Bulls will remain incentivised to persist in bargain hunting, given the tremendous mid-long-term opportunities in the equities market,” the analysts added.

United Capital research analysts further noted that fund managers and businesses “may begin to entertain mid-long-term (≥6 months) investment objectives, cherry-picking only sound equities with strong fundamentals and ongoing corporate actions. This strategy will maximise market opportunities, thereby optimising portfolio returns”.

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Despite the raise in policy rate, equities market rose by 2.05 percent or N1.158trillion in September alone. The market’s gain in September was driven banking, Oil & Gas, and insurance stocks despite profit taking seen in consumer and industrial stocks.

“We expect a mixed performance in the local bourse as investors reassess existing portfolio following the recent hike in MPR to 27.25 percent. However, this could be partially balanced by targeted bargain hunting, driven by positive corporate actions and strategic dividend positioning,” investment research analysts at Lagos-based Futureview said in their September 30 note to investors.

Ahead of Monday’s trading, analysts at Lagos-based Vetiva Research said they expect to see investors adopt a wait-and-see approach to the market in the coming weeks, “as they anticipate the release of third-quarter (Q3) 2024 earnings results”.

Also in their view, Meristem analysts expect the equities market to close down this week, “as we anticipate profit-taking activities as investors rebalance their portfolios to lock in gains ahead of the new quarter.”

“We anticipate a shift in investor sentiment towards the fixed income market, driven by high yields, as the Monetary Policy Committee’s hawkish stance tightens system liquidity and slows equities market activities. While we anticipate continued positive volatility on

tickers like Julius Berger, United Capital and NAHCO this week, we don’t expect it to significantly affect the overall market. Barring any major corporate action this week that might drive the market towards the positive, we expect the local bourse to close in the negative territory,” Meristem analysts said.