Newly listed Aradel Holdings Plc led the league of market’s laggards last week after its share price decreased by 25.75percent, followed by Caverton Offshore Support Group Plc which dropped by 20 percent. No fewer than 45 stocks lost their prices while 39 gained in the week ended Friday November 1 as the NGX-ASI dipped by 2.03 percent.
Aradel recently disclosed its plans to pay interim dividend, less than a month after listing. The company will pay an interim dividend of N8 per share, representing a dividend payout of N34.8 billion for the nine months (9M) to September 30, 2024.
The dividends will be paid to shareholders whose names appear on the shareholders register as of November 20, 2024. The proposed interim dividend for 9M 2024 is 433 percent higher than the N6.5 billion interim dividend distributed by the group in 2023.
On October 14, Aradel Holdings Plc was listed by introduction on the NGX at a share price of N702.69, however, the stock’s share price has declined to N445.60 as at Friday November 1.
In 9M 2024, Aradel Holdings posted a net profit of N110.6 billion, marking a 477 percent year-on-year growth from the N19.2 billion recorded in the corresponding period in 2023. Hence, the dividend distributed for the period represents a dividend payout ratio of 31 percent.
In FY 2023, Aradel paid a total dividend of N43.4 billion, representing an interim dividend of N30 per share and a final dividend of N170 per share for its 217.2 million ordinary shares of N10 each.
Also, Ellah Lakes Plc decreased by 12.59 percent, followed by Regency Assurance Plc (-12.50 percent). When a delegation of stockbrokers, led by Muyiwa Adeyemi, Managing Director, Atlas Portfolio visited Ellah Lakes Plc plantation in Edo State, they were impressed by the company’s commitment to diversification and sustainable growth.
The securities dealers, said they observed significant investments in palm plantation and piggery facility, which are expected to contribute substantially to the company’s revenue streams. The visit reinforced stockbrokers’ confidence in Ellah Lakes Plc management and its ability to deliver value to shareholders. The company has placed a premium on becoming a diversified agribusiness over the next five years.
Other major laggards last week include Royal Exchange Plc (-11.27 percent), Veritas Kapital Assurance Plc (-11.25 percent) and Bua Cement Plc (-11.09 percent).
Before its recent dip, Veritas Kapital was among a few stocks that posted triple-digit gains this year. The stock has gained 283.78 percent year-to-date (YtD). Veritas Kapital started 2024 with a share price of N0.37 and traded at a share price of N1.42 as of November 1, 2024.
“This week, we will closely monitor the market to identify attractive entry points in fundamentally strong stocks. Mid-week portfolio adjustments will be made as needed, with updates provided through the Daily Market Summary to keep our positions optimised,” according to CardinalStone Research in their November 4 Model Equity Portfolio (MEP) report which is an expression of opinion about Nigerian equities “and does not represent an actual portfolio of stocks (though market liquidity is respected)”.
Read also: Forty-five stocks lose, 39 gain as NGX-ASI dips by 2.03% in one week
According to Futureview Research analysts in their recent note, “We anticipate a mixed performance in the equities market this week, as investors selectively target key stocks following recent price dips”.
Likewise, share price of Lasaco Assurance Plc decreased by 10.84 percent last week, Guinea Insurance Plc (-10 percent), and Cadbury Nigeria Plc (-9.89 percent). In the review week, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) and Market Capitalisation depreciated by 2.03 percent to close the week at 97,432.02 points and N59.039 trillion respectively.
“We anticipate a positive trend in the equities market this week, with a reduced sell bias as investors are likely to re-enter fundamentally sound tickers now trading at attractive levels,” according to Lagos-based Meristem research analysts in their November 4 note.
The analysts said investors positioning in tickers expected to close 2024 with strong earnings—based on nine months (9M) 2024 results—as well as upcoming corporate actions are likely to further bolster positive market sentiment.
“We do not rule out profit-taking activities as investors may capitalise on short-term gains given the recent trends in the equities market. Overall, we envisage that buying interest will likely outweigh the sell bias this week,” Meristem research analysts further noted.
On the contrary, Transnational Corporation Plc increased most by 314.03 percent. The market was notified that the entire 40,647,990,293 issued shares of Transnational Corporation Plc were delisted from the Daily Official List of Nigerian Exchange Limited (NGX) on Monday, October 28 while the newly reconstructed issued share capital of 10,161,997,574 ordinary shares of 50 Kobo each were also listed on the Daily Official List of NGX at N44.2 per share.
Also, Eunisell Interlinked Plc rose by 60.57 percent in one week, while other major advancers include John Holt Plc (+20 percent), University Press Plc (+18.28 percent), and Livestock Feeds Plc (+12.32 percent).
Northern Nigeria Flour Mills Plc went up by 11.76 percent, Skyway Aviation Handling Company Plc (+10 percent), Vitafoam Nigeria Plc (+10 percent), Sunu Assurances Nigeria Plc (+10 percent), and Conoil Plc (+9.14 percent).
“Looking forward, the equities market is expected to retain its buy interest as investors cherry-pick undervalued stocks. However, given the high interest rates in the fixed income and money markets, we expect some bearish undertone to persist in the equities market as fixed income biased investors take advantage of the high yields in the fixed income space,” according to United Capital research analysts in their recent investment views.
They said “the bulls will remain incentivised to persist in bargain hunting, given the tremendous mid-long-term opportunities in the equities market”.
They analysts also foresee fund managers and businesses beginning to entertain mid-long-term (≥6 months) investment objectives, “cherry-picking only sound equities with strong fundamentals and ongoing corporate actions”, adding that “this strategy will maximise market opportunities, thereby optimising portfolio returns,”
All other indices finished the week lower with the exception of NGX Banking, NGX AFR Bank Value, NGX AFR Div Yield, NGX MERI Growth, NGX MERI Value, NGX Oil & Gas and NGX Growth which appreciated by 0.19 percent, 1.76 percent, 1.52 percent, 0.16 percent, 0.48 percent, 1.15 percent, and 0.07 percent respectively while the NGX ASeM index closed flat.
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