Last week had three trading days in Nigeria but ended up being an eventful week. This week is bound to be even more interesting with a lot of market activity expected locally and internationally as the world gears up for what many see as a market correction cum bearish run. Here is a list of Stocks I will be tracking this week. [upme_private]
Oando – Oando released its results some weeks back assuring investors that its acquisition of COP assets in Nigeria was going to be a major turning point in its future prospects. However, the latest fall in oil prices may just be about to put a spanner in the works for the company. A drop in oil prices is likely to affect their revenues and potentially output, hurting margins which the company needs so badly. As Oil prices drop to under $90 their projections will be under threat suggesting that the share price may just come under some pressure again.
Seplat – Just like Oando, this stock is also exposed to the global oil price downfall even so as it is a major upstream sector. The company is also listed in the UK and it currently is close to its one year low as at today (October 13). Seplat half year results was down by almost 50% as a drop in volumes hurt margins. It is likely that if the fall in oil prices were to continue their full year results may take a hit. This fear is likely to dominate the minds of investors as the week flows by. This one stock I will be watching.
Listen to our podcast on how the market sell offs may affect Nigerian stocks
Nigerian Breweries – They announced that SEC had approved their Merger with Consolidated Breweries late last week bringing close the consummation of another huge deal in the highly competitive beer market. Consolidated Breweries has some value brands that Nigerian Breweries needs particularly in the lower market (33 Larger for example) which can leverage on NB huge distribution network to increase visibility in the wider market. It will be interesting to see how the market reacts to this stock
Forte Oil – They are typically earlier fliers and I won’t be surprised if their results were to be announced this week. The share prices has remained basically stable in the latter half of this year as no new market intelligence has been made known that can influence price. They did announce that they plan to acquire a downstream asset but this failed to push momentum towards the share price for too long. Any major announcement such as its result may push prices up if their results is as impressive as it was in the first half of the year.
Access Bank – The tier 1 bank announced its rights issue last week and since then has seen their share price trade below the proposed rights issue price. They are likely to announce the qualification date for the rights which on its own should have a significant impact on its share price during the rights issue.
Listen to analyst deliver a buy, sell or hold on Tier 1 Bank Stocks
Skye Bank – AMCON announced Skye Bank had won the bid to acquire Mainstreet Bank, a Bank that is as large as Skye Bank in terms of Net Assets and just slightly less profitable going by the 2013 audited results. Skye Bank is likely to fund this acquisition via a combination of debt and equity as it hopes to use the acquisition to shore up its CAR. Skye Bank is rumoured to have agreed a deal of N120billion and had paid 20%. That means it will need to raise about N80billion which will be more than the N68billion Access bank is currently raising. This will be another stock to watch this week
Ikeja Hotels – No one still really understands what is driving this stock up despite releasing largely disappointing results (Q1 and Q2). It is unlikely that the share price will recede as the driver appears to be other than fundamentals. I suspect someone is buying up the shares in the market in reediness for some form of takeover. Will this stock gain another 50% this week?
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