Though some investors in Nigeria’s equities may not be enjoying the market’s bumpy ride lately but it is worthy to note that amid the cloudy skies on Custom Street, many stocks have done well this year.
Investors buy stocks to enjoy either capital appreciation (which the difference between the purchase price and the selling price) or dividends which are returns distributed to shareholders from a company’s earnings or profits.
Top on the list of stocks that investors currently enjoy capital appreciation this year include: Morison (+311.8percent), LASACO (+271.4percent), Honeywell Flourmills (+220.8percent), Regency Alliance (+118.2percent), Cutix (+117.4percent), and Vitafoam (+114.7percent).
For investors who want to gain from stock, they are advised to buy the current laggards, especially the value counters that are trading at record lows –these stocks have the potential to rally in future.
At the Nigerian Bourse, banks have been releasing their financial scorecards for the first half (H1) with some declaring interim dividends. Despite the influx of the banks H1 scorecards, there has not been remarkable reactions that could stir overall positive sentiment on the Nigerian Exchange. As at the beginning of this trading week, the equities market’s negative return this year was -3.36percent.
“Although we anticipate buying interest on some tickers that have witnessed significant share price depreciation in the previous weeks, we still see scope for further selloff. Furthermore, while we await the outcome of the Monetary Policy Committee meeting this week, we do not expect any surprise that would turn market tides. Thus, we expect the market to close the week in the red”, said equity research analysts at Lagos-based Meristem.
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Other stocks that have outperformed the market are: Champion Breweries (+141.9percent), CHI Plc (+65.6percent), Eterna Plc (+41.2percent), Fidson Healthcare (+35.3percent), Guinness (+57.9percent), Julius Berger (+51.7percent), Learn Africa (+36percent), Livestock Feeds (+49.6percent), and May & Baker (+27.4percent).
Though the market continues to decline, but in their September 13 note, Lagos-based analysts at Vetiva Securities said, “We expect some Tier-1 banking names and small cap counters to continue to boost market activity as investors continue to bargain hunt across sectors.”
Investors have also made money this year in Nahco (+26.1percent), Oando (+20.3percent), Okomu Oil (+20.9percent), Seplat Energy (+88.8percent), Sovereign Trust Insurance (+35percent), Total (+53.2percent), Tripple Gee (+50percent), UACN (+42.1percent), United Capital (+72percent), and Wapic (+25percent).
“In the medium term, we expect the market to remain choppy. Additionally, market participants will be watching the fixed income space closely amid a hike in stop rates at the recent NTB auction, the analysts said in their recent note” said United Capital analysts who had expected some bargain hunting on some tickers that experienced selloffs last week.
For investors who took position in Wema Bank, the stock has risen this year by 11.6percent, Lafarge (+4.5percent), Veritas Kapital Assurance (+15percent), Transcorp Hotel (+2percent), PZ Cussons (+10.4percent), Prestige Assurance (+4.3percent), Presco (+12.1percent), Pharm Deko (+8percent), Oando (+20.3percent), Northern Nigeria Flourmills (+8.3percent), and NEM Insurance (+6.7percent).
GTI research analysts said in their outlook for the week ending September 17, 2021 that, “We expect bullish sentiment in the coming week as bargain hunters take position in the recently depreciated stocks. However, some investors may take profit from the appreciated stocks”.
Stocks like Mutual Benefit (+11.1percent), Linkage Assurance (+15.4percent), Ikeja Hotel (+5percent), Flour Mills (+11.3percent), FBN Holdings (+4.9percent), Conoil (+7.2percent), BOC Gases (+21.7percent), Julius Berger (+21.1percent), Ardova (+14.4percent), Access Bank (+10.1percent), and Academy Press (+20percent) have also outperformed the market this year.
