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Market Views

Nigerian Tier-2 banks fired up, investors profit up N1 trillion W/W

Sixty-eight (68) equities appreciated at price during the week, higher than twenty-eight (28) equities in the previous week.

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Global stocks sell-off persists as resurgence of COVID-19 frighten investors 

The Nigerian bourse ended the last trading week in October on an impressive note.

It was a four-day trading week as the Federal Government of Nigeria declared Thursday, 29th October as a public holiday to commemorate Eid-el-Maulud.

  • The All-Share Index and Market Capitalization gained by 6.39% to close the week at 30,530.69 and N15.958 trillion respectively. Investors gained N958.41 billion W/W.
  • Meanwhile, a total turnover of 1.909 billion shares worth N23.610 billion in 23,578 deals was traded this week by investors on the floor of the Exchange, compared to a total of 1.505 billion shares valued at N19.668 billion that exchanged hands last week in 20,552 deals.
  • The Financial Services industry (measured by volume) led the activity chart with 1.478 billion shares valued at N15.576 billion in 12,546 deals. Thus, contributing 77.41% and 65.97% to the total equity turnover volume and value respectively.
  • The Consumer Goods Industry followed with 131.788 million shares worth N2.613 billion in 4,112 deals. In third place was Industrial Goods, with a turnover of 83.526 million shares worth N3.573 billion in 1,818 deals.
  • Trading in the top three equities is FBN Holding Plc, Zenith Bank Plc, and Access Bank Plc (measured by volume). They accounted for 576.514 million shares worth N6.791 billion in 4,652 deals, contributing 30.19% and 28.76% to the total equity turnover volume and value respectively.
  • 68 equities appreciated in price during the week, higher than 28 equities in the previous week.
  • 6 equities depreciated in price, lower than 35 equities in the previous week.
  • 94 equities remained unchanged, lower than 99 recorded in the previous week.

Top gainers

  1. PORTLAND PAINTS & PRODUCTS NIGERIA PLC, up 32.20% to close at N2.71
  2. FCMB GROUP PLC, up 28.28% to close at N3.13
  3. TRIPPLE GEE AND COMPANY PLC, up 27.78% to close at N0.46
  4. STERLING BANK PLC, up 26.43% to close at N1.77
  5. FIDELITY BANK PLC, up 24.26% to close at N2.51
  6. ECOBANK TRANSNATIONAL INCORPORATED, up 24.18% to close at N5.65
  7. LASACO ASSURANCE PLC, up 23.08% to close at N0.32
  8. FLOUR MILLS NIG PLC, up 22.39% to close at N28.15
  9. CUSTODIAN INVESTMENT PLC, up 21.00% to close at N6.05
  10. NESTLE NIGERIA PLC, up 21.00% to close at N1421.70

Top Losers

  1. MORISON INDUSTRIES PLC, down 10.00% to close at N0.54
  2. PRESTIGE ASSURANCE PLC, down 10.00% to close at N0.54
  3. CUTIX PLC, down 8.95% to close at N1.73
  4. NASCON ALLIED INDUSTRIES PLC, down 8.39% to close at N13.10
  5. OMATEK VENTURES PLC, down 7.69% to close at N0.24
  6. CORNERSTONE INSURANCE PLC, down 3.33% to close at N0.58

Outlook

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The Nigerian bourse ended its last trading week in October on a delightful note. Buying pressure was seen across the market spectrum, amid falling oil prices and the U.S dollar propelling higher.

  • Nigerian Tier 2 Banks, which include Fidelity, FCMB, and Sterling Bank, became investors’ delight, as their recent price actions showed greater upside and admirable fundamentals when taking into consideration their P/E ratios.
  • That said, Nairametrics recommends that you seek the advice of a seasoned stockbroker, on the basis that past performance of financial assets can’t guarantee their future performances.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment Trading. Featured Financial Market Analysis for a Fortune Global 500 Company. Member of the Chartered Financial Analyst Society. Follow Olumide on Twitter @tokunboadesina or email [email protected]

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Cryptocurrency

Why Bitcoin still looks like a bargain

With prices exceeding $18,000 for the first time since 2017, BTC looks poised to break its previous all-time high.

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Bitcoin on high demand, hits 2-year high, trading $17,000

As stakeholders, players, and crypto wannabes ponder if increasing their stakes on Bitcoin, the world’s most popular crypto seems ideal now, despite the fact that it’s trading near a record high, Nairametrics decided to weigh in on some key fundamentals showing Bitcoin looks like a bargain.

With prices exceeding $18,000 for the first time since 2017, BTC looks poised to break its previous all-time high. More investors are holding bitcoin for wealth preservation.

READ: Bitcoin on high demand, hits 2-year high, trading $17,000

A recent report from Glassnode, revealed plummeting Bitcoin exchange balances support the narrative that investors intend to hold their flagship crypto more than ever before, taking into consideration that with the prevailing demand in play, and limited supply of Bitcoin, the price would most definitely go north.

READ: Nigerians pay heavy price as laptop scarcity bites harder

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Bitcoin liquidity continues its downward trajectory, buttressing that the macro bitcoin is becoming scarce for open sale.

It is also important to note that Bitcoin has a circulating supply of 19 million coins and a max supply of 21 million coins, meaning there are about 2million left to be mined.

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READ: How Crypto can curb Nigeria’s high unemployment rate

Taking into account that about 4 million Bitcoins have been lost forever as a result of BTCs owners dying, and their next of kin not having access to such cryptos, it is fair to say there are only about 15million BTC presently in circulation to cater for over 7 billion people fighting to have a stake in Bitcoins, meaning that as BTC becomes scarce and more popular, it becomes a matter of time that the crypto asset valuation will hit the roof.

READ: Ripple hits a big bang, gains 30%

Bottom line

It’s vital to consider the bias saying that as global financial regulators begin to implement their regulatory framework on cryptos, it could become a matter of months for global banks and multinationals to increase their buying pressures on BTC. Thereby, pushing the price beyond the reach of an average investor.

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Market Views

Tesla up 500% in 2020, near $500 billion market value

The tech powerhouse is now less than $6 billion short of approaching the $500 billion market value.

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Tesla up 500% in 2020, near $500 billion market value, Survey unveils Elon Musk as the most inspirational leader in tech 

Tesla, the electric car automaker, has gained 500% in 2020 and has become by far the world’s most valuable automaker in the world, despite it producing far less than Volkswagen, Toyota, or General Motors.

The tech powerhouse is now less than $6 billion short of approaching the $500 billion market value, and extending its surge since reports struck Wall Street on Tesla making its S&P 500 debut on December 21, forcing index funds to buy billions of dollars of its share.

READ: U.S stock futures trade flat, Apple regains $2 trillion market value

Unsurprisingly, it became global investors’ choice amid its recent price action rising by 6% – showing a gain of over 6%. Tesla Inc. extended its rally at the most recent trading session ahead of its December debut in the S&P 500 (SPX), as it is now worth a market value of $494 billion.

READ: Nigeria spends N1.08 trillion to import used cars and motorbikes in one year 

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Its market capitalization is higher than the Gross Domestic Product (GDP) of any African country, Nigeria – $448.1billion, South Africa – $351.4billion, Egypt – $303.2billion, Algeria – $169.98billion, Morocco – $118.7billion, Ethiopia – $96.12billion, Kenya – $95.5 billion, Angola – $94.6 billion, Ghana – $66.9 billion, Tanzania – $63.2 billion.

READ: Dangote Cement, Nigerian Breweries drop, investors lose N46 billion

What you should know

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Now worth $494 billion, Tesla will increase the concentration of heavyweight companies within the S&P 500. It will be the 7th most valuable company within the index, just behind Berkshire Hathaway and ahead of Visa Inc., according to Refinitiv data.

READ: Crypto: UniSwap gives each owner over $2,000

  • About a fifth of the car company’s shares is owned by its Chief Executive, Elon Musk and other insiders.
  • The S&P 500 is weighted by the number of companies’ stocks available on the stock market.
  • The car company’s influence within the benchmark will be slightly reduced, putting it in 8 positions, just behind Johnson & Johnson, with an equivalent of about 1% of the S&P 500 index.

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Market Views

Bank stocks remain a buy amid uncertainty prevailing Nigeria’s economy

The All-Share Index and Market Capitalization depreciated by 2.57% to close the week at 34,136.82 and N17.838 trillion respectively.

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Investors flee Nigerian Stocks as FDI and FPI dips

Nigerian Stocks ended the previous week cumulatively on a bearish note.

What we know: The All-Share Index and Market Capitalization depreciated by 2.57% to close the week at 34,136.82 and N17.838 trillion respectively.

In the previous week, Nigerian Stocks had its bullish run halted arbitrarily on the bias that stock traders and investors intensified their profit, taking into account the significant amount of weak earnings recorded by Nigerian Banks.

It was unsurprising to see four Nigerian banks in the top 10 losers chart for the week, as investors fretted on such performance on the basis that Nigeria’s banking industry remains the most vibrant after Agriculture, Energy in Africa’s largest economy.

GTBank 728 x 90

That said, In the coming week stock traders are expected to be very cautious amid recent macros showing Africa’s largest economy has dipped into a recession in Q3 as oil production dropped to a four-year low.

Abdul-Rasheed Oshoma Momoh, Head of Capital Market in TRW Stockbrokers Ltd, in a phone chat interview with Nairametrics, said Nigerian markets are presently playing out like a ping pong ball the momentum has slowed down for now.

More of consolidation now as investors buy into good stocks that have a light at the end of the tunnel. (Zenith Bank, UBA, GTBank, First Bank, Access Bank) taking into consideration he doesn’t see any new highs now till 2021.

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Bottom- line: Profit taking is expected to remain at least in the near term, taking into consideration Nigeria is officially in a recession, meaning a lot needs to be done to get Africa’s biggest economy on its foot, as such development could trigger more profit-taking in spite of the positive trend playing relatively at Africa’s best-performing equity market.

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