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Stock Market’s ‘Great Rotation’ to Catch Out investors, Warns DeVere Boss

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The growing noise about the rotation from growth to value stocks as a result of the optimistic vaccine news is “misguided” and could “catch-out investors,” warns the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The stark warning from Nigel Green, chief executive and founder of deVere Group, which has $12bn under advisement, comes following several key breakthroughs in the fight against Covid-19 causing an ‘unprecedented’ rotation in stocks.

Market rotation is the counter movement by traders from one equity class or sector into another.

Mr Green warns: “Optimism driven by progress towards a Covid-19 vaccine has prompted many investors around the world to ditch several of 2020’s high-flying stocks – the ones that benefitted from the impact of the pandemic – and buy ones that were beaten down by coronavirus.

“In the last few days, there’s been a historical, violent rotation from growth and momentum stocks, like stay-at-home tech, to value funds, including financials and industrials, as a result of the positive vaccine news.

He continues: “Hopes for a potential vaccine are legitimate and the developments are, without question, positive news for humanity.

“However, The Great Rotation could be misguided and could catch-out investors.

“They might be looking ahead to the post-pandemic era with a virus-free economy, but the world, the global economy, how we live, do business and interact remains fundamentally changed.

“It is doubtful the world will go back exactly to how it was pre-Covid – there are many aspects of the ‘new normal’ which people like and support. As such, some of the major shifts are unlikely to be reversed.

“The remote working phenomenon is one example. Even if 20% of office workers return to the office full time, the change in working patterns is monumental.

“Other examples include business travel being replaced with videoconferencing, and online retail – people have fallen in love with it. Will they all suddenly go back to the stores? Then there’s the use of apps for everyday tasks such as banking, also for healthcare and medical analysis, amongst many other things.

“In many ways, Covid-19 simply accelerated the growing trend that existed before towards consumer convenience, for 24/7 access and on-demand.

“Therefore, dumping stocks that support these major societal and economic seismic shifts in favour of so-called recovery stocks might catch investors off guard.”

The deVere CEO also highlights that the roll-out of a mass global vaccination agenda will be a lengthy process and will face an uphill logistical struggle, plus there are the “vaccine sceptic concerns to address.”

He concludes: “The best way for investors to position themselves for the opportunities and to mitigate risks is to have a broad spread of investments, and not to try to second guess the market.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Nigerian Stock Exchange

Japaul Gold and Ventures Plc Drops 7 Percent Following Failure to File 2020, Q1 2021 Financial Statements

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Japaul gold and ventures plc - Investors King

Shares of Japaul Gold and Ventures Plc, a mining business and technology development company, fell by N0.04 or 6.78 percent on Friday to close at N0.59 a share after the management of the company announced it will not be filing the first quarter (Q1) 2021 unaudited financial statements due to the pending audited financial statements of 2020.

On Friday, investors transacted 8.362 million shares of Japaul Gold and Ventures, the highest since May 4, 2021 when 9.317 million shares exchanged hands.

The uncertainty surrounding the H&H Mines Limited deal announced in November 2020, the fundraising expected for the deal and the lack of clarity surrounding the company’s financial position continue to drag on its shares and general outlook.

Japaul Gold closed as the third loser on the Nigerian Exchange Limited on Friday. The bourse gained N52 billion to close at N20.579 trillion on Friday.

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Nigerian Stock Exchange

Eternal Plc, Regency Assurance Plc, Others Boost Nigerian Exchange Limited (NGX) on Friday

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Nigerian stocks extended their winning streak to three days as stocks of Eternal Plc, Regency Assurance Plc, NEM Insurance Plc and others closed in the green.

Investors traded 219.549 million shares valued at N2.918 billion in 4,107 deals during the trading hours of Friday.

The Exchange All-Share Index rose by 0.25 percent to 39,481.89 index points, up from 39,382.96 index points recorded on Tuesday before Ramadan break.

The market value of listed equities gained N52 billion from N20.527 trillion it settled on Tuesday to close the week at N20.579 trillion on Friday.

Zenith Bank led the most trade stock with 32,028,318.00 shares valued at N754,936,979.00, while Access Bank followed with 28,759,013.00 shares estimated at N243,792,645.45. See the details below.

Top Gainers

Symbols Last Close Current Change %Change
ETERNA N6.00 N6.60 0.60 10.00%
REGALINS N0.31 N0.34 0.03 9.68%
NEM N1.90 N2.08 0.18 9.47%
CHIPLC N0.45 N0.49 0.04 8.89%
ABCTRANS N0.34 N0.37 0.03 8.82%

Top Losers

Symbols Last Close Current Change %Change
ACADEMY N0.40 N0.36 -0.04 -10.00%
LINKASSURE N0.75 N0.69 -0.06 -8.00%
JAPAULGOLD N0.59 N0.55 -0.04 -6.78%
MBENEFIT N0.42 N0.40 -0.02 -4.76%
COURTVILLE N0.21 N0.20 -0.01 -4.76%

Top Trades

Symbols Volume Value
ZENITHBANK 32,028,318.00 N754,936,979.00
ACCESS 28,759,013.00 N243,792,645.45
FIDELITYBK 19,673,037.00 N46,296,242.69
FBNH 18,461,104.00 N131,407,101.35
GUARANTY 11,193,843.00 N332,102,077.70

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Nigerian Stock Exchange

Folasope Babasola Aiyesimoju, Group Managing Director UACN, Dumps N231.750 Million on UACN Shares

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Folasope Babasola Aiyesimoju - Investors King

The Group Managing Director of UAC of Nigeria Plc (UACN), Folasope Babasola Aiyesimoju, invested N231.750 million in UACN Shares.

The management disclosed in a statement signed by Nkemdirim Agboti, Company Secretary, UACN.

Aiyesimoju bought 22,500,000 UACN shares at N10.30 a unit on May 11 2021 in Lagos, Nigeria (the Nigerian Exchange Limited trading floor).

Aiyesimoju became UACN Group Managing Director and Chief Executive Officer on April 1 2019 following Mrs Omolara Elmide exit.

Mr Aiyesimoju is a finance professional with experience spanning corporate finance, principal investing and private equity. Over the course of his career, Fola has lived and worked in Sub-Saharan Africa’s most important economies gaining experience of the operating landscape in the region. He holds a B.Sc. (Hons) degree in Estate Management from the University of Lagos, where he was awarded a Certificate of Excellence in Real estate development and finance, and earned the right to use the CFA designation in 2006.

He is the founder of Themis Capital Management, an investment firm focused on concentrating capital and talent on high-potential opportunities in Sub-Saharan Africa.

Aiyesimoju first joined the Board of UAC of Nigeria PLC in March 2018 and is a member of the Governance and Remuneration Committee of the Board. He was also appointed Managing Director/CEO of UACN Property Development PLC (“UPDC PLC”) in August, 2018 and, in his capacity as Group MD/CEO of UAC, will serve concurrently as Managing Director/CEO of UPDC PLC until anew Managing Director/CEO is appointed for the subsidiary company.

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