Last week in our stocks to watch article, we identified 4 stocks that we felt had a crucial role to play in the way the market ends up. This was on the back of the much expected MPC meeting as well as the November 27th OPEC meeting. Both has come and gone and as expected by this blog, the CBN did devalue the naira and OPEC agreed not to cut crude oil supplies. The impact weighed down on stocks around the world and Nigeria including the stocks on our watch list.
This week, we will be keeping an eye on the following stocks as the impact of the devaluation, drop in oil prices and the upcoming Xmas season continuing to impact heavily on the market
Oando – Oando makes our watch list yet again on the back of their recently suspended Rights Issue. The NSE had last week decided to suspend the rights issue after their lead issuing house Vetiva confirmed that they had not obtained SEC approval. The exchange made the announcement towards the end of trading on Friday. Oando shares did drop to N20.76 on Friday after rising to a high of N22.5 (above Rights Issue price) during the week. It will be interesting to see how the market reacts to this announcement on Monday. We will have on eye on their share price.
Mansard Insurance – The company made headlines this week after AXA announced it was acquiring the parent company of Mansard Insurance Plc. The share price gained 5% on Friday to close at N3.15 after opening at N2.86 gaining 11%. Mansard Insurance is one of the biggest Insurance companies listed on the exchange with the highest market capitalization at N25.2billion. This is one stock to watch this week.
Access Bank – The bank MD was put on the spot last week when he in a rather uncharacteristic manner tried to show boat with his little or nothing statement. The share price plunged further last week dropping to N7.61 after opening at N7.83. This is quite below the targeted proposed rights issue price of N8.9. The rights issue has been announced for over two months but is yet to commence. With the regulatory headwinds recently announced by the CBN as it is unlikely that they will continue to stick to this valuation. This is coupled with the dipping share price that is adamant to find a support level above N8
Transcorp Hotels – The company recently concluded its Initial Public Offer but is yet to list on the floor of the Nigerian stock exchange. Information reaching us suggest the IPO was undersubscribed which is quite disappointing for the much hyped IPO. Transcorp Hotels is planning to build world class hotels in Lagos and was banking on raising about N7.7billion in equity to part finance the project. The IPO went for a price of N10 and will be listed at that price when it debuts in the market. This could be the week that it makes its debut so we will be looking forward to seeing how it trades.
PZ Plc– The company has had a bad year in terms of fundamentals and even share price. Earnings per share dropped 5% to N1.16 at the end of the financial year and plunged 30% year on year in the first quarter of the current financial year. The share price has also dropped 19% year to date and looked like it was heading for a massive correction. It dropped to as low as N17.5 during the massive sell offs in early November but has now bounced back to N28.5 gaining a massive 63% in less that one month. I don’t know how long this rally will last but as we all know, the Nigerian stock exchange loves a rally. Last week alone, the stock gained 28% and it is not impossible that it repeats that fit. We will be watching this stock as well