Markets
These penny stocks hit a 5-year low last week
Last week was a negative one on the Nigerian Stock Exchange, as the All Share Index closed at 30,672.79, down 194.03 basis points or 0.63%. Year to date, the index is down by 19.80%. Stock performance has been varied. While some stocks are still trading close to their year highs (and in some cases 5-year highs), others have hit a year low and some, a 5-year low.
The following stocks hit a 5-year low in last week’s trading.
Cornerstone Insurance Plc
Cornerstone Insurance hit a 5-year low of N0.20 per share in Friday’s trading session. Year to date, the stock is down 60%. Investors that have held the stock in the last years have slightly bigger losses at 64.9%.
Why has the stock done so poorly?
The decline in the stock’s price over the last few years may be closely connected to its poor performance. The company has not paid dividends in over three years, and recorded losses after tax of N1.7 billion in 2016 and N3.3 billion in the 2017 financial year. Its poor performance had caused Nairametrics to classify it as a Zombie insurance stock for investors to avoid.
2018 may however be a turn around year, going by its results for the nine months ended September 2018. The firm made a profit after tax of N658 million, as against a loss after tax of N2.1 billion recorded in the comparative period of 2017. Barring any large claims, Cornerstone Insurance could thus make a full year profit in 2018.
Investors expecting dividend payments may have to wait a while, as the company currently has negative retained earnings and is barred from paying dividends till these are wiped.
Daar Communications Plc
Daar Communications Plc hit a 5-year low of N0.40 per share in last Thursday’s trading session on the Nigerian Stock Exchange. Year to date, the stock is down 20%. Investors that have held the stock in the last 5 years have nothing to cheer about, as it has declined by 20%.
For investors that bought the stock during its Initial Public Offer in 2008 at N5 per share, and have held, they would have suffered a 92% loss in value.
Why has the stock done poorly?
Daar has recorded losses over the past few years, and 2018 may be no different, even though the magnitude of losses has reduced. Results for the nine months ended September 30, 2018 show that revenue increased from N2.5 billion in 2017 to N3.3 billion in 2018. The firm however recorded a loss after tax of N320 million in 2018, as against N2 billion in 2017.
Daar had, in a statement released to the NSE, announced that it had embarked on some staff restructuring and business rejigging. The company also promised to hold its 2017 and 2018 AGMs in the first quarter of 2019.
Full year 2018 results should provide some more clarity on how well its turnaround efforts have yielded fruits. Till then, the stock could continue sliding to the N0.20 mark.
Stock Market
Dangote Cement loses N92 billion on NGX, as investors digest Q1 2021 financial results
The NGX All-Share Index and market capitalization declined by 0.92%, as shares of Dangote Cement and MTN declined.
The stocks of top cement companies on Wednesday closed in the downline as investors sold off stakes in the shares of Dangote Cement despite impressive Q1 2021 results.
Data tracked on the Nigerian Stock Exchange revealed that the shares of Nigeria’s most capitalized company lost a whopping N92 billion in market value, at the back of a 2.49% decline in the share price of the leading cement producer.
On the flip side, shares of BUA Cement, another key producer in the Nigerian cement industry closed flat on the exchange today, while Lafarge Africa lost a meagre N1.6 billion of its market capitalization, triggered by a 0.47% decline in its share price.
The impact of this decline on the NSE Industrial Index
The 2.49% decline in the shares of Dangote Cement weighed heavily on the Industrial index, an index that tracks the performance of industrial companies listed on the Nigerian Stock Exchange.
At the end of the market today, the industrial index closed lower at 1918.94 index points, driven by the N92 billion market value loss which Dangote Cement suffered today on the exchange.
The index depreciated by 1.19% to print its biggest loss in a day since the 3oth of March when it depreciated by 1.90%.
Decline in Dangote Cement and MTN Nigeria shares weighed on the Nigerian Stock Exchange
The Nigerian Stock Exchange NGX, closed on a negative note today largely occasioned by the decline in the shares of MTN Nigeria and Dangote Cement.
The shares of MTN Nigeria suffered a market value decline of 4.65%, to close the day lower at N162 per share as investors continue to price in the impact of regulatory restrictions on new SIM sales and activations on the revenue and earning power of the company. Mobile subscribers on the MTN’s network declined by 5 million to 71.5 million in the first quarter of 2021.
This bearish sentiments in the shares of MTN and Dangote Cement both led to the NGX All-Share Index and market capitalization decline of 0.92%, to close lower at 39,111.30 index points and N20.468 trillion respectively.
Stock Market
Conoil, Courtville soar as NGX ASI plummets
The All-Share Index decreased by -0.81% to close at 39,114.73 from 39,433.81.
The Nigerian Stock Exchange market maintained the bearish momentum speculated by analysts. The All-Share Index decreased by -0.81% to close at 39,114.73 from 39,433.81.
• Nigerian Stock Exchange market value currently stands at N20.64 Trillion. Its Year-to-Date (YTD) returns currently stand at -2.87%.
• The market breadth closed negative with the bears as CONOIL led 25 Gainers, and 20 Losers topped by BOCGAS showing a hint of consolation.
Top gainers
1. CONOIL up +10.00% to close at N18.70
2. COURTVILLE up +10.00% to close at N0.22
3. SEPLAT up +9.99% to close at N604.40
4. LINKASSURE up +8.62% to close at N0.63
5. ACCESS up +5.19% to close at N8.10
Top losers
1. BOCGAS down -9.99% to close at N12.25
2. LIVESTOCK down -9.90% to close at N1.73
3. SCOA down -9.66% to close at N2.15
4. REDSTAREX down -9.59% to close at N3.11
5. REGALINS down -9.38% to close at N0.29
Outlook
The Nigerian stock market continued the bearish run held yesterday as it posted losses once again at the end of the trading session today.
• Market sentiments tend toward consolidations as the NGX ASI closes with 25 Gainers and 20 Losers.
• Nairametrics advises cautious buying in this era of growing uncertainties.
