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Market Views

Access Bank, First Bank up, investors gain N747 billion W/W

Fifty-three (53) equities appreciated at price during the week, higher than thirty-six (36) equities in the previous week.

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nIGERIAN STOCK EXCHANGE, STOCK MARKET, MARKET CAPITALIZATION

The All-Share Index and Market Capitalization both appreciated by 5.30% to close the week at 28,415.31 and N14.852 trillion respectively. Investors gained 747.19 billion.

Explore Data on the Nairametrics Research Website

  • A total turnover of 3.140 billion shares worth N35.372 billion in 35,099 deals was traded this week by investors on the floor of the Exchange, in contrast with a total of 1.532 billion shares valued at N16.901 billion that exchanged hands last week in 17,882 deals.
  • The Financial Services industry (measured by volume) led the activity chart with 2.325 billion shares valued at N25.816 billion traded in 21,306 deals; thus contributing 74.05% and 72.99% to the total equity turnover volume and value respectively.
  • The Oil and Gas industry followed with 200.567 million shares worth N1.012 billion in 1,977 deals.
  • The third place was the Industrial Goods industry, with a turnover of 149.200 million shares worth N3.631 billion in 2,991 deals.
  • Trading in the top three equities namely Zenith Bank Plc, FBN Holdings Plc, and United Bank for Africa Plc. (measured by volume) accounted for 1.236 billion shares worth N15.724 billion in 9,774 deals, contributing 39.36% and 44.45% to the total equity turnover volume and value respectively.
  • Fifty-three (53) equities appreciated at price during the week, higher than thirty-six (36) equities in the previous week.
  • Fourteen (14) equities depreciated in price, lower than fifteen (15) equities in the previous week, while ninety-six (96) equities remained unchanged, lower than one hundred and twelve (112) recorded in the previous week.

READ: MOBIL, DANGOTE CEMENT record gains, as market liquidity increases by 120%

Top gainers

  • ETERNA PLC. up 32.48% to close at N3.63
  • INTERNATIONAL BREWERIES PLC. up 21.03% to close at N4.72
  • AFRICA PRUDENTIAL PLC up 20.63% to close at N5.73
  • TRANS-NATIONWIDE EXPRESS PLC. up 19.48% to close at N0.92
  • FBN HOLDINGS PLC up 19.23% to close at N6.20
  • ACCESS BANK PLC. up 16.42% to close at N7.80
  • GLAXO SMITHKLINE CONSUMER NIG. PLC. up 16.00% to close at N5.80
  • NASCON ALLIED INDUSTRIES PLC up 15.87% to close at N12.05
  • LINKAGE ASSURANCE PLC up 15.79% to close at N0.44
  • NIG. FLOUR MILLS PLC. up 14.81% to close at N4.65

READ: GUINNESS, NB, SEPLAT, AIRTEL, UNILEVER record impressive gains, investors gain N82.46 billion WoW

Top losers

  • UACN PROPERTY DEVELOPMENT COMPANY PLC down 11.96% to close at N0.81
  • TRIPPLE GEE AND COMPANY PLC. down 10.00% to close at N0.36
  • DEAP CAPITAL MANAGEMENT & TRUST PLC down 10.00% to close at N0.27
  • ACADEMY PRESS PLC. down 6.90% to close at N0.27
  • CONOIL PLC down 5.57% to close at N14.40
  • LAW UNION AND ROCK INS. PLC. down 5.17% to close at N1.10
  • JAIZ BANK PLC down 4.84% to close at N0.59
  • CHAMS PLC down 4.76% to close at N0.20
  • UNION DIAGNOSTIC & CLINICAL SERVICES PLC down 4.00% to close at N0.24
  • OANDO PLC down 2.62% to close at N2.23

READ: GTBANK, UBA, ZENITH BANK record gains, as investors gain N18.2 billion

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Outlook

Nigerian bourse recorded impressive gains in the week amid growing political uncertainty across Nigeria’s borders

  • Nigeria’s major export earning asset, crude oil printed higher as Hurricane storm threatened 17% of America’s crude oil supplies, thereby trading at $43/Barrel.
  • Significant buying pressures from Nigeria’s notable stocks rallied investors inflows W/W, as institutional investors took advantage of decent stocks that were trading relatively at a discounted level.
  • On the macro level, Nigeria’s 2021 budget revealed plans to finance the deficit with flows from new borrowings (N4.28 trillion), privatization proceeds (N205.15 billion), and drawdowns from multilateral and bilateral loans secured for specific projects and programs (N709.69 billion).
  • Nairametrics expects you to seek the counsel of a certified Stockbroker when choosing stocks to buy, as Nigerian Stocks often exhibit cyclic returns.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Follow Olumide on Twitter @tokunboadesina or email [email protected] He is a Member of the Chartered Financial Analyst Society.

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Market Views

Analysts pick Nigerian stocks Warren Buffett may likely buy

Financial market experts talk on what Nigerian stocks Warren Buffet may likely consider, based on his unique principles.

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warren-buffett, Young Investors, Here’s why Warren Buffet's $4.6m lunch with Bitcoin entrepreneur is experiencing delay , What Warren Buffet will do if he traded Nigerian stocks

Warren Buffett’s strategy as regards investments has earned him the popular nickname the “world’s greatest investor.”

The global investment community holds the 90-year-old man with so much high esteem when his successful investment strides is considered and the fact that he is now worth about $88.4 billion, and seats on the boards of so many blue-chip companies.

Buffet has long believed in the value-based investing model, as he only invests in companies that exhibit solid fundamentals such as strong earning power, the potential for continued growth, and most importantly, selecting those with low or no debt.

READ: Why Warren Buffett’s company is buying shares of a gold mining company

Consequently, Nairametrics has sought the opinions of selected financial market experts on what Nigerian stocks the world’s most powerful investor may likely consider, based on his unique principles.

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Angela Aya, Head, Institutional Sales at Alonati in an exclusive interview with Nairametrics spoke on key insights Buffett usually looks out for when selecting stocks.

“Warren Buffet’s investment philosophy centers around traditional yet intricate qualities like company debt profile, profitability, historical performance, exposure to commodities, product offerings, and historical dividend payouts.

“He is considered a value investor focusing on high dividend-paying blue-chip companies that show robust earnings characterized by strong balance sheets holding investments over the long term,” Aya said.

READ: Why You Should Not Invest Like Warren Buffet

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She elaborated on the impressive performance of the Nigerian Stock market in relation to the value they bring in the long haul by stating;

“Despite the Nigerian All Share Index outperforming the rest of the world in 2020, Nigerian stocks are relatively cheap from a purchasing power parity standpoint.

“Therefore, in a long-term strategic value investment play, bellwether stocks that offer stability, show profitability, and are resistant to systemic shocks will be the picks. They may not be trendy or might seem out-right boring, but they are reliable and proven to outperform given time. “

READ: Is Zenith Bank thriving on the strength of sound financial indices?

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Adetayo Teluwo, a Portfolio Manager at one of Nigeria’s most valuable firms spoke on key metrics accustomed to Warren Buffet’s investment style;

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Teluwo said, “I will focus on the long term, adopt a buy-and-hold mentality and prioritize blue-chip dividend-paying stocks that have proven their worth over decades.

Since I do not have bottomless pockets, I will make out time to shortlist based on ROE, D/E, and a blend of perceived ‘intrinsic value’

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ROE = Net Income ÷ Shareholder’s Equity

Debt-to-Equity Ratio = Total Liabilities ÷ Shareholders’ Equity

READ: What Warren Buffet will do if he traded Nigerian stocks

Following Buffett’s investment principle, Adetayo went further by revealing the type of Nigerian stocks he would select. He said;

“According to Warren, if you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.

“If I had the conviction of Warren, these will be my top stock picks:

“Julius Berger, UBA, Zenith Bank, GTBank, Custodian, NAHCO, CHI Plc, NEM, Jaiz Bank, WAPIC, Unilever, GSK, MANSARD, Dangote Sugar, Afrinsure”

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READ: Import substitution, devaluation spur revenue growth for Dangote Sugar

Silas Ozoya, President/CEO, SUBA Capital adds up to our remarkable respondents as he discloses that Nigeria’s stock market’s most liquid sector would be on Buffett’s top list, not forgetting his love for consumer staple stocks;

“Banking stocks for a start would be his first pick because he has a history of investing in financial institutions.

“So, he would go with stocks like Zenith Bank, GTBank, and FCMB because of profitability in the case of Zenith. Cutting edge technology in the case of GTBank, and versatile banking products in the case of FCMB.

“Warren Buffet is also big with daily consumables and beverages. So, he would go with the stocks of Nigerian Breweries Plc, Dangote Sugar, and Guinness Nigeria Plc.

“I’ve been following Warren Buffet’s investment strategy for a while and three things I’ve noticed are that he says the money would always exchange hands, financial institutions would always make money, and people would always consume daily consumables.”

READ: Why Warren Buffett is making less money now

Bottom line

  • It’s key to highlight the rarity of Warren Buffet’s tenets in selecting stocks on the account that he has remained relatively consistent over many decades.
  • Still, it remains critical for readers to understand that applying Buffet’s strategy takes a whole lot of discipline and patience.
  • However, the few who have followed the founder of the world’s biggest conglomerate, (Berkshire Hathaway) on applying his analytical investment tools have had no regrets in the long term.

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Market Views

Netflix gains 17% after beating investors expectation

Netflix for the first time ever passed the 200 million subscriber mark and had an impressive reserve of  $8.2 billion in cash.

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Netflix supporting education by offering some free shows

Netflix’s share price bounced about 17% higher after it beat market expectation, powering the video streaming stock to close high after adding more customers than expected and revealed it no longer needs debt in building its entertainment empire.

The positive upbeat guidance on free cash prompted bullish remarks from Wall Street analysts, though some questioned how much of the subscriber growth was pulled forward.

Stock traders increased their buying pressure on Netflix stock because of the surprisingly strong growth, as well as news that Netflix balance sheets are solid enough for Netflix considering share buybacks. Shares jumped 17% percent to $586.34 in recent trading Wednesday.

Netflix for the first time ever passed the 200 million subscriber mark and had an impressive reserve of $8.2 billion in cash.

READ: Netflix, Amazon, Zoom, Shopify drop over 10%

Specta

 

COVID-19 pandemic has aided Netflix’s business, forcing people in spending more time indoors coupled with curbing other traditional entertainment options like movie theaters and concerts.

Netflix added 25.9 million customers in H1, 2020, and ended up adding 36.6 million customers in all – a record.

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“Investors come out of the fourth quarter incrementally more bullish on the potential of a powerful developing shareholder return story for Netflix in the coming years,” Evercore ISI analyst, Lee Horowitz wrote in a note to Bloomberg News.

READ: McCaleb, co-founder of Ripple sells 28.6 million XRP

Analysts at J.P. Morgan Securities said the company is likely to begin share buybacks in the second half of the year.

Quick fact: Netflix is an American streaming company that allows subscribers to watch movies, documentaries, different popular TV shows, and many more through internet-connected hardwires.

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Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics also spoke on the impressive gains sighted in the $259 Billion valued company;

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“Earnings reports also underpinned equity sentiment. Netflix rose 16% after noting its subscriber numbers increased by a record 37 million in 2020. Serenely, it seems lockdowns and TV go hand in hand.

READ: Nigeria leads the world in Bitcoin searches on Google

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“A testament to the maximum policy overdrive, investors wasted little time getting their feet wet after Janet Yellen espoused by the Biden “go big” policy approach to repair the economic damage caused by the pandemic, which also highlights the importance of helping small businesses and the unemployed.”

What to expect: The Stock market is seeing through longer lockdowns on the premise that COVID vaccinations will lead us out of the pandemic quickly and had helped triggered significant buying pressure on stocks like Netflix taking advantage of reduced social mobility in play

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Cryptocurrency

World’s biggest asset manager provides Bitcoin to clients

The world’s largest asset manager BlackRock Inc is adding bitcoin futures as an eligible investment asset class.

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The world’s largest asset manager, BlackRock Inc is adding bitcoin futures as an eligible investment asset class according to a recent filing by the leading asset management company in a move to bring crypto to its customers.

BlackRock, in a report credited to Reuters disclosed that it was using such asset class as bitcoin derivatives for its two funds namely; BlackRock Global Allocation Fund and BlackRock Strategic Income Opportunities.

Such funds listed above will invest only in cash-settled bitcoin futures traded on commodity exchanges registered with the Commodity Futures Trading Commission, the company said in a filing to the Securities and Exchange Commission yesterday.

Recall some weeks ago, BlackRock CEO, Larry Fink had disclosed, the flagship crypto is on his company’s radar amid the rapid gains recorded by Bitcoin this year alone.

Speaking recently at the Council on Foreign Relations alongside Mark Carney, former Governor of the Bank of England, Fink said, “Bitcoin has caught the attention and the imagination of many people. Still untested, pretty small relative to other markets.”

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  • BlackRock is the world’s biggest asset manager with about $7.4 trillion in assets under management as of the end of Q4 2019.
  • Its massive size allows it to do what no other asset management on planet earth can do.

Upshot

Also, the BlackRock CIO of Fixed Income buttressed his bias, on why Cryptos are here to stay, taking into account its role in payments among the world’s millennials.

“I think cryptocurrency is here to stay and I think it is durable and you’ve seen the central banks that have talked about digital currencies. I think digital currency and the receptivity, particularly millennials’ receptivity to technology and cryptocurrency is real. Digital payments systems are real, so I think Bitcoin is here to stay,” he said.

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