Dangote Cement, Tier-1 banks tipped as stock to watch

By Peter Egwuatu

DESPITE the rally witnessed in the equity market last week on the Nigerian Stock Exchange, NSE Financial analysts have cautioned investors to be careful in their investment choice amidst brewing political jitters ahead 2019 elections.

Analysts also tipped Dangote Cement and depressed Tier-1 banks as stocks to watch this week following the return of positive sentiment as investors begin to take position.

Stockmarket

It was a jolly ride for the Nigeria’s equity market as gains were recorded in all trading sessions of the last week.  Specifically, the NSE All Share Index, ASI recorded a whopping 3.94 percent Week on Week, W o W gain following buying sentiments across sectors.

https://newlive.vanguardngr.com/2018/12/nse-index-up-by-0-68-as-banking-stocks-trail-investors/

In the same manner, another stock market gauge, market capitalisation appreciated by 3.94 percent to close the week at N11.562 trillion.

Reacting, analysts at Lagos based investment firm, Cordros Capital said: “In spite of last week’s rally, our view continues to favour cautious trading pattern in the equities market amidst brewing political jitters ahead 2019 elections, and the absence of a positive market trigger. However, we expect the positive macroeconomic fundamentals to drive recovery in the long term.”

Commenting as well, analysts at Vetiva Research said: “With positive investor sentiment returning to the market last week, we are cautiously optimistic. Whilst we expect buying momentum to fizzle out on cement stocks, we foresee some buy interest in depressed Tier1 banking stocks.  The stock to watch,  Dangote Cement  gained 10 percent  in four sessions last week. The stock gained 3 percent on Friday to close at ?194.90 and is up 3 percent in 2019, underperforming the Industrial Goods sector (nine percent   Year to Date, YtD ).

Meanwhile, a total turnover of 1.270 billion shares worth N13.463 billion in 16,476 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 1.265 billion shares valued at N14.074 billion that exchanged hands penultimate week in 19,278 deals. The Financial Services Industry (measured by volume) led the activity chart with 1.131 billion shares valued at N10.573 billion traded in 10,352 deals; thus contributing 89.06 percent and 78.54 percent to the total equity turnover volume and value respectively.

The Consumer Goods Industry followed with 37.744 million shares worth N1.628 billion in 2,054 deals. The third place was Conglomerates Industry with a turnover of 37.699 million shares worth N102.918 million in 566 deals. Trading in the Top Three Equities namely, Diamond Bank Plc, Guaranty Trust Bank Plc and Zenith Bank Plc (measured by volume) accounted for 696.955 million shares worth N8.509 billion in 3,753 deals, contributing 54.86 percent and 63.20 percent to the total equity turnover volume and value respectively.

Meanwhile, Sovereign Trust Insurance Plc has announced through its stockbroker, Dynamic Portfolio Limited, a proposed approval from the NSE and listing of a Rights Issue of 4,170,411,648 ordinary shares of 50 kobo per share, on the basis of one (1) new share for every two (2) ordinary shares held by shareholders.