• Thursday, July 25, 2024
businessday logo

BusinessDay

These stocks still deliver positive returns despite talks of slowdown

Large caps maintain dominance as profits jump

Equities never give guaranteed returns but some stocks on the Nigerian bourse are delivering that smartly, even double-digit.

Some of the stocks and their returns as at December 2 are Access Bank Plc (+35.3percent), Africa Prudential (+8.5percent), BOC Gases Nigeria Plc (+45.4percent), Caverton (+30.2percent), C&I Leasing (+234.3percent), Custodian Investment (+6.2percent), and Fidelity Bank (+3percent).

Others are MTNN (+33.3percent), Red Star (+6percent), Sterling Bank (+7.9percent), Union Bank (+25percent), and Lafarge Africa (+12.4percent).

Few kobo stocks have also impressed lately. Some of them and their returns are ABC Transport (+41.4percent), AIICO (+11.1percent), Chams (+90percent), CHI (+2.6percent), Cornerstone Insurance (+265percent), Courteville (+30percent), Jaiz Bank (+32percent), Law Union (+18.3percent), Livestock (+4.1percent), Royal Exchange (+9.1percent), and Wema Bank (+15.9percent).

These record positive returns come on the heels of the market’s performance indicator showing a negative return of -14.09percent as at eleven months to November 30.

Just like Warren Buffett whose investing style definitely leans toward sticking with stocks for long periods, investors who chose to hold these stocks year-to-date have reasons to smile despite talks on market’s slowdown. Though, investors are expected to lock in value stocks with attractive dividend yields in anticipation of the December rally.

No doubt that some speculators made money lately from some stocks that are currently showing negative returns after improved buy decision in their favour pushed up their prices.

Contrarily, others were caught in the web of losses due to activities of profit-takers on their select counters. Some other investors took medium to long-term positions in anticipation of improved capital gains and dividend income.

“We expect the equity market to continue to benefit positively from the restriction placed by the CBN on local investors in the fixed income (OMO) space, as prices and dividend yields remain attractive in the equity market”, according to Lagos-based Vetiva research analysts in their December 2 note.

“In the first stage of market recovery lately, bank stocks were favoured but soon experienced profit-taking, last week, as consumer-facing industrial stocks were bought instead. We think that where banks continue to offer dividend yields in excess of T-bills, investors will likely continue to support their stocks,”  according to research analysts at Coronation Merchant Bank.