Stock Market to Benefit From Low Valuations – Experts
Investment experts have said the Nigerian Stock Exchange would benefit from low stock valuations despite the present mixed performance following sell pressure in banking stocks.
The experts hinged their analysis on the usual investors’ search for undervalued yields with strong fundamentals.
The NSE market capitalisation expanded by N14 billion last week but the All Share Index declined by 0.08 percent 25,572.57 basis points, highlighting the mixed performance of the Exchange amid growing economic uncertainties.
The analysts at Cordros Capital, in the review of the week performance, said the bourse could see a positive performance in the long run over compelling valuations while advising investors to exercise cautions when buying given current uncertainties.
They stated: “In the absence of a positive catalyst, and given the still uninspiring macro story, we guide investors to trade cautiously in the short term.
“However, we expect the market might benefit over the longer term on compelling valuations and as investors seek alpha-yielding opportunities in the face of negative real returns in the fixed income market.”
Experts at Afrinvest Securities, another Lagos-based investment banking company, said the new week would see investors taking profit, a situation they said could weigh on the Exchange and plunge stock value.
Bank Stocks Top Charts Amid Strong Third Quarter Performance
Bank stocks top both gainers’ and top traded stocks’ charts on Tuesday as investors at the Nigerian Stock Exchange continues to increase their holdings of banks’ stocks amid strong third-quarter financial results.
Zenith Bank led the most traded stocks for a second consecutive day on Tuesday following a declaration of N509 billion gross earnings and N177 billion profit after tax in the first nine months of the year.
Investors traded 71,933,841 shares of Zenith Bank valued at N1,730,151,404.20 during the trading hours of Tuesday.
Transcorp, the only non-bank stock on the top five trades, followed Zenith Bank with 37,172,526 shares worth N32,853,263.27.
Guaranty Trust Bank Plc, Access Bank and United Bank for Africa (UBA) exchanged 30,003,182 units, 29,549,235 units and 29,332,033 units estimated at N1,022,126,997.60, N243,311,726.70 and N236,303,261.20, respectively.
Investors exchanged a total of 365.414 million shares valued at N4.692 billion in 6,325 deals on Tuesday to return the bourse to the green zone after two days of consecutive declines.
The Nigerian Stock Exchange market capitalisation rose by N114 billion from N17.829 trillion it closed on Monday to N17.943 trillion on Tuesday. While the NSE All-Share Index gained 220.82 index points or 0.06 percent to 34,349.56 index points it settled on Tuesday, up from 34,119.74 index points on Monday.
Stanbic IBTC Bank led gainers with N2.8 or 7.08 percent gain to finish the day at N42.35 per share. See the details below.
Insider Dealing: Paul Miyonmide Gbededo, MD Flour Mills, Purchased 1.95 Million Shares in Flour Mills
In a disclosure statement filed with the Nigerian Stock Exchange, the management of Flour Mills of Nigeria Plc said Paul Miyonmide Gbededo, the Group Managing Director, purchased 1,949,839 shares in the company.
In a statement signed by Umolu Joseph, the Company Secretary and Director, Flour Mills of Nigeria, Gbededo bought the 1,948,839 shares at N28 per unit on November 17, 2020.
The Managing Director invested N54,567,492 in Flour Mills of Nigeria Plc in a move that suggested confidence in the future of the company.
The disclosure is in line with the Nigerian Security and Exchange Commission’s new policy on insider dealings. See the transaction details below.
Insider Dealing: Chide Agbapu Buys 1 Million Shares in Fidelity Bank
The management of Fidelity Bank on Friday said Mr. Chidi Agbapu, a non-executive director, bought 1,000,000 shares of Fidelity Bank Plc.
In line with the Nigerian Stock Exchange (NSE) disclosure policy, the lender said Agbapu purchased the shares in two different transactions on November 9, 2020.
According to a statement signed by Ezinwa Unuigboje, Company Secretary, Fidelity Bank, the shares were purchase in two deals of 500,000 units each at N2.75 per share. See the details below.
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