Despite renewed desires for another positive driver, many stocks on the Nigerian Exchange Limited (NGX) have seen increased buy activities this year and their returns surpassed 100percent year-to-date (YtD).
While investors continue to ponder over the latest inflation data from the National Bureau of Statistics (NBS), worthy of note is that positive sentiments seen since May 30 due to interesting pronouncement on May 29 and policies implementation by the President Bola Tinubu-led new administration has pushed the market to new highs.
Nigeria’s new President has been speedily warming himself to investors after wasting no time in announcing an end to the country’s costly fuel subsidy programme and unveiling adoption of single exchange rate. Since this development, Oil & Gas and Banking stocks turned investors delight.
For instance, investors holding till date stock like MRS have seen 387.6percent rise in its share price this year. Investors in Tripple Gee are not left out in the record rally as the stock has yielded 393.7percent return this year.
Also, FTN Cocoa has risen this year by 365.5percent, while investors in Transcorp have seen 209.7percent increase in the value of their stock this year. Ikeja Hotels has also impressed investors with 223.8percent return this year.
In their recent views, Futureview Research analysts said they expect a mixed trading pattern this week “as investors continue to select stocks with attractive dividend yields while keeping wary of abandoning gains in the market.”
“Nonetheless, we recommend that investors only invest in stocks that are fundamentally sound,” the analysts added in their June 16 note.
The stock market recorded +5.79percent return this month, according to trading data as at week ended June 16, while the positive return year-to-date (YtD) as at same trading week was 15.12percent.
Research analysts at Lagos-based Meristem in their June 19 stock recommendation said they expect bargain-hunting activities to remain prevalent in the market. “The positive sentiment is expected to be driven by investors’ continued optimism about the corporate performance of companies (particularly in the financial services sector),” they added.
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“Furthermore, we envisage that investors’ optimism in the pro-market posture of the new administration persists and thus we project buying interest on some attractive tickers. On the flip side, we do not rule out the possibility of bouts of selloffs on stocks that have gained appreciably in the prior weeks. Overall, we anticipate the overriding sentiment in the market to be positive during the week, howbeit marginally,” Meristem research analysts added.
Other stocks that have surpassed 100 percent returns this year include NAHCO which rose by 118.8percent year-to-date (YtD), according to trading data as at week ended June 16. Investors in AXA Mansard Insurance have seen their stocks rise this year by 105percent; while those who are holding till date, the shares Lasaco have seen 164.4percent return this year.
Conoil share price has also risen this year by 198.1percent, while investors in Eterna have seen their share price rise this year by 106.3percent. Also, investors holding the shares of Northern Nigeria Flour Mills have recorded 126 percent return this year.
“Market yearns for its next positive driver, as investors continue to mull over the latest inflation data from the NBS. We expect mixed trading this week, with a likely decline in the average traded volume for the week,” according to Vetiva research analysts in their June 19 note to investors.
In addition to the above counters that have yielded returns in excess of 100percent, other stocks have also impressed investors and have reasonably surpassed the market benchmark performance indicator. For instance, in the banking sector, Access Corporation rose by 67.6percent year-to-date, while ETI was up 45.3percent as at the week under review.
Others are: FBN Holdings (+45percent), FCMB Group (+29.9percent), Fidelity Bank (+59.5percent), GTCO (+33percent), Jaiz Bank (+89.1percent), Stanbic IBTC Holdings (+89.1percent), UBA (+46.1percent), Union Bank (+10.2percent), Unity Bank (+85.5percent), Wema Bank (+23.6percent), and Zenith Bank (+29.2percent).
National Bureau of Statistics released Nigeria’s May 2023 Consumer Price Index (CPI) report. The report revealed yet another increase in year-on-year (y/y) inflation rate, rising to 22.41percent from 22.22percent in April 2023.
Berger Paints with 74.2percent return YtD leads other industrial goods stocks followed by Cutix which rose by 24.4percent year-to-date. For consumer goods stocks, PZ which has risen this year by 67.4 percent trails the outperforming Northern Nigeria Flour Mills. Cadbury is also up by 58percent YtD, while Dangote Sugar Refinery has risen by 43.3percent. Looking at the performance of others consumer goods stocks revealed Flour Mills (+23.2percent), Honeywell Flourmills (+38.9percent), Nascon (+62.2percent), and Unilever (+35.3percent).
“This week, we expect the bullish sentiments in the market to linger in the short-term, driven by positive sentiments by investors on account of interesting pronouncement and policies implementation by the new administration. However, we foresee pockets of profit-taking activities as some investors would book their gains from the bourse’s recent rally,” United Capital research analysts said.
In the Oil & Gas sector, aside the earlier mentioned stocks that have yielded over 100 percent YtD returns to their investors, other stocks like Total (+74.5percent), Oando (+43.9percent), and Seplat (+20percent) have also impressed. In the Agriculture sector, Livestock Feeds (+52.3percent) trails FTNCocoa which has risen by 365.5percent. Also, while Okomu Oil rose by 43.3percent YtD, Presco went up by 30.9percent.
Other stocks are: John Holt (+57.5percent), Cornerstone (+85percent), NEM Insurance (+40percent), MTNN (+27.4percent), Academy Press (+54.3percent), C& I Leasing (+40.6percent), and RedStar (+54.9percent).