The stock market continued its bullish journey on Monday with marginal growth of 0.04%. So far this year, the market has returned 14.47%
In a stock market review with the MD/CEO of Global View Capital Limited, Aruna Kebirathe following was discussed:
•The market opened the week with a marginal growth of 0.04%. What should we expect for the week?
This week is the penultimate week of Christmas and after Christmas week, the year will come to an end.
It has been a tradition in the market for Fund and Portfolio Managers to help close most of the high positions in favor of their portfolios.
The year 2022 is not likely to be an exception and since there is a band limit in which a price can move one day, its actions had to have started in earnest.
On top of that, there are always high expectations for the coming year at the end of each year, as stock prices have experienced the worst in the hands of market participants, upside potentials are enhanced.
Prices have wide gaps to cover between what they are trading and their 52-week high.
In this context and given the third quarter results in the market, I sense that the week will turn positive again, even if there is an intermittent burst of profit taking.
•What is driving the price of Learn Africa?
Learn Africa in their Q2 2022 showed a noticeable deviation from their Q2 2021. Instead of the losing position of N126,432.00 they made a profit of N110,078 which represents a growth of 187%. Market forces act randomly to compensate or punish prices for their performance.
The stock has been trading at N165 since the beginning of the month and this jump is a testament that the market is set to end the year on a high note.
• Why are Neimeth and AXA Mansard trending down?
Neimeth has been trending lower since the beginning of the month from N1.40 and N1.28k closed on Dec 12, 2022
A cursory look at its latest published earnings report revealed that its earnings also trended lower.
Revenue fell 11.3%, they experienced a 140.5% post-tax loss and negative -5.77k EPS from a 14k eps which represents a 141.2% decline.
The market is a discount factor, this has to be well reflected in the share price, that is what we are seeing.
•How attractive is FBNH in N11?
The big elephant is pregnant with non-public information. I continue to believe in its strength to weather many adverse market conditions and stay on its feet.
At N11.00, FBNH still has the advantage of moving up to its 52-week high of around N15.00, although the price has held around N11.00.
•What are the possibilities at Zenith Bank, Fidelity and WAPCO?
Zenith, Fidelity and Wapco are stocks to watch. Zenith’s liquidity serves as both an advantage and a disadvantage. It may take a lot of effort for the price to rise, but it will surely do so when the market dynamics are in its favour.
Fidelity has always presented its quarterly earnings with fantastic earnings returns indicating the low stock price. It is set to rally when the market turns completely.
Wapco has continually tried to keep up with the industry to which it belongs. It is the cheapest cement stock and also has the potential to catch up with the prices of other stocks in the industry.
Word of the parent company worrying about terrorist sponsorship issues has come and gone and that has been factored into the price and the moment the market turns Wapco will pivot with it.
•What are the actions to monitor?
It may sound a little too traditional about my choice of stocks to watch, but I’ll still stand by. Guinness, Nigerian Breweries, Okomu Oil, Presco, Fidelity, NGX are stocks to focus on as the year draws to a close and another year begins.