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C & I leasing gains 349% as Nigerian stocks end first quarter of 2019 in deep red

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Nigerian stocks closed the first quarter of the year posting a combined year to date negative return of 1.24%. Apart from the Premium and Industrial Goods indexes, most other indexes posted negative returns.

The first quarter of the year witnessed a slew of cautious investing as investors weighed the possible consequences of the 2019 general elections, Brexit, the US economy and other emerging market developments. So while investors helped stocks close higher in February with a 6.41% pop, March performance dragged the index down falling by 2.14%.

As we begin a new quarter, it is important to take note of stocks that have performed the best in the first quarter of this year while also observing those that performed worse.

Nigerian Stocks 2019 First Quarter Performance

How many stocks gained – Based on the data from the Nigerian Stock Exchange, about 44 stocks posted gains in the first quarter of the year. Our of the 44, 26 posted at least double-digit gains and one triple-digit gain.

Best stock for the year so far – C&I leasing was the stock that posted the best return in the first quarter of 2019 with a whopping 349% return. This is despite the fact the company is yet to publish its 2018 9 months and full year results. In its half-year results, pre-tax profits were only up by 20% while revenue was only up by 10% year on year respectively.

Why C&I Leasing – Typically when stocks report impressive returns like we have seen above it is often tied to a potential change in the shareholding structure of the company. It could perhaps mean that there is likely going to be an acquisition, merger, potential investment or share reconstruction. The company does have about N2.28 billion in deposit for shares. A more plausible reason for the share price increase could well be the share consolidation being executed by the company. C&I Leasing recently consolidated 4 shares existing in the company into 1. This should basically quadruple its share price.

Other top gainers – These include the likes of ABC Transport, Dangote Flour, and Julius Berger which gained, 83%, 49%, and 37% respectively. Focussing on Julius Berger, the construction giant reported a 47% rise in earnings per share on the back of improved topline revenues. Construction contracts, for example, rose from about N135 billion in 2017 to about N178.5 billion in 2018. The company also declared a final dividend of N2 per share sending the share price northwards.

What about losers – There were about 63 stocks on the losers list with about 35 of them losing over double digits. Notable among the losers were GSK, Flour Mills, Nigeria Breweries and PZ Cussons losing 26, 22%, 22%, and 19% respectively. GSK share price drop is rather surprising considering that it had a better result than the year before and also declared dividends.

Coronation Research

Here is a list of the best and worst stocks in the first quarter of this year.

Coronation Research

Note: Thanks to our visitor KC for the comment on the share consolidation

Download (PDF, 186KB)

1 COMMENT

  1. Please revisit the C&I Leasing analysis. Stock performance should be adjusted for the reverse stock split. On an adjusted basis, the stock price has dipped and market cap reduced.

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