• Thursday, April 18, 2024
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Stock market up by 0.10% as Transcorp Power listing adds N1.86tn to capitalisation

Stock market closes in red as investors await MPC outcome

Nigeria’s equities market opened the new week on a positive note, rising by 0.10percent. The Nigerian Exchange Limited (NGX) on Monday March 4 listed by introduction Transcorp Power Plc 7.5billion ordinary shares of 50 kobo each at N240 per share.

The listing added about N1.86trillion to the equities market capitalisation of the Nigerian Bourse. Investors exchanged 40million units of Transcorp Power Plc shares worth N10.560billion.

Read also: Stock market sees first gain after MPC decisions as GTCO, UBA rally

The stock market defied recent hike in benchmark interest rate that makes investment in fixed income market more attractive.

The Debt Management Office (DMO) on behalf of the Federal Government of Nigeria announced the March edition of the FGN Savings Bond with an interest rate of 15.097percent for 2 years and 16.097percent for 3 years.

As of December 31, 2023, Transcorp Power Plc register of members reveals a total of 7.5billion outstanding shares. A significant majority of these shares (51.57percent) is held by the parent company, Transnational Corporation Plc (Transcorp), amounting to 3.87billion shares.

Also as at December 31, 2023, RichPoint Limited is the second highest shareholder with 33.27percent holding. Further down the line, Woodrock Energy Resources Limited, Seaforce Investments Limited and Thomassen Holding Limited have 7.46percent, 3.60percent, and 2.57percent of the total shareholding, respectively.

The residual percentage of 0.20percent is distributed among 7 shareholders with less than 1percent each of the total shareholding.

The power company took market stakeholders through its Facts Behind the Listing, after performing the Closing Gong Ceremony of the NGX.

Read also: Stock market rout continues Thursday on MPC decisions

At the close of trading on Monday March 4, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) and Market Capitalisation increased from preceding trading day’s lows of 98,737.06 points and N54.027trillion respectively to 98,847.89 points and N N55.889trillion. In 10,749 deals, investors exchanged 429,639,960 shares worth N19.924billion.

“We expect mixed sentiment towards equities investments, with bearish sentiments possibly outweighing positive sentiments as a direct result of the high yields in the fixed income market.

“However, we expect increased appetite among investors towards corporates in the financial services sector, as investors look to continue to position themselves in dividend-paying stocks ahead of full-year dividend declarations,” United Capital research analysts said in recent note to investors.

Also, according to Meristem research analysts, “We foresee the local bourse to trade on a mixed note, however with a bearish tilt. Particularly, some companies’ unimpressive financial performance may amplify the lingering negative sentiment”.

“Furthermore, we highlight that investors’ anticipation of rising interest rates in the fixed-income market, particularly ahead of the T-bills auction scheduled for this week, may further may limit liquidity in the equities market.

Read also: Stock market down by 1.27% as investors seek better yields after MPC rate hike

“Meanwhile, we note the potential for bargain hunting on stocks that present attractive upside potentials to investors. Overall, we expect the market to close in the red zone this week,” said Meristem research analysts.