17/02/2025
STOCK MARKET REVIEW: FEBRUARY 17, 2025
The Nigerian stock market last week closed on a positive note with 2.00% growth. Year to date the market has returned 4.98% with the All Share Index and Market Capitalisation at 108,053.95 points and N67.418 trillion respectively.
In a stock market review with the MD/CEO of GlobalView Capital Limited, Aruna Kebira, the following were discussed
🔰 Excerpts:
🔰 Last week, the stock market closed positively with 2.0% growth. What is the outlook for the new week?
The market last week was heading to close much higher than the 2.02% it eventually closed. But one of the SWOOT stocks dived southward, shedding N39.30, representing a 6.9% decline in price. The stock is Aradel.
A decline of that magnitude of a SWOOT stock on the floor of the NGX is very significant and fundamental to the direction the ASI closes.
The market still closed northwards as a result of the renewed buying zeal of the investors and market participants ahead of the declaration of dividends and bonuses, as the case may be.
The market this week is expected to close in the green as this week marks midway into February. The earnings season is here, and the market will soon begin to experience surprises from the issuers any moment from now.
🔰 What is driving the growth in Honeywell Flour, UPDC, and VFD Group?
VFD, according to their UFS 2024, revealed that the company grew its PAT to N10.4b from a LAT of N750m, representing a growth of 1,486%
Its EPS grew from a negative eps of 395k to a positive EPS of 822k, representing a 308% growth.
Honeywell Flourmill reversed the trend in its financial statement, as revealed by the just-released Q32024.
The company grew its PAT to N8.7b from a LAT of N9.2b, representing a 194% growth.
Its EPS reversed from a negative EPS of 11,639k to a positive EPS of 11,034k
🔰 How attractive is Dangote Cement at N480?
You can recall that this stock was on full offer for a fairly long period. Most Dangote stocks took a holiday and were either trading sideways, stagnating, or experiencing the dead-cat-bounce intermittently while the rift between the Dangote Refinery and the NNPCL lasted.
By the look of things, the dust had settled, and the market believed that the attention of the man would now be shifted again to his other companies.
With a N686.70 52-week high and N349.20 52-week low price, N480 is 43% behind the 52-week high price, signifying that the stock could still have more traction and latitude to repeat the 52-week high feat and most probably surpass it.
The stock has begun to receive the attention of the market again.
🔰 Is Presco a good buy at N785?
As an agricultural produce company and based on its performance trajectory, there are so many possibilities with Presco.
With a N104.28 EPS as at its UFS 2024, rising from an eps of N32.86, representing a 217% increase, it can not easily be ascertained to what extent the price of the stock will go.
This is a stock that pays interim dividends and keeps on surprising and beating the market forecast and analysis opinions anytime it releases its earnings report.
If the stock price is doing N1,000 in the market, it will not be a surprise to many.
The sector in which they operate is very peculiar. Competition is very mild. It is not a manufacturing sector where a group of people can just pool funds together overnight and commence.
It requires a gestation period of draught before harvest, and capacity can not be easily increased overnight and at will, too, because the plantations have to take the natural order to grow and produce.
A lot of resource owners cannot be contemplating putting up competition in the sector.
🔰 Nigerian Breweries reported a Loss after Tax of N144.34 billion for FY 2024. No dividend was declared for the year 2024. What are the possibilities in this stock?
The fate of Nigerian Breweries is like the fate of most manufacturing companies that were adversely affected by the currency revaluation and the depreciation of the Naira coupled with the ever-growing inflation and interest rate since 2023.
The impact of the above situation wasn’t friendly to their balance sheet as they were exposed to foreign currency facilities.
They have to write off the losses as required by the IFRS accounting standard, and that puts serious pressure on their retained earnings which changed the narrative.
They have completed a capital raise via a rights issue, which will enable them to offset their position and de-lever their balance sheet.
The company has to bring its negative reserves to ground zero initially and begin to grow from there before the issue of dividend declaration becomes an item on the agenda in their board meeting.
If the funds they raised from the offer are judiciously used, the worst days for the companies will fast be coming to an end.
🔰 How attractive is First Holdco (FBNH) at N32.45?
The bank can be likened to a cat with nine lives. If the events that had happened to the bank happened to three other banks, they would cave in.
The bank has written off from their balance sheet funds, which is enough to start about three other banks at N25 billion minimum capital.
The battle for the soul of the bank is taking another toll and putting a new set of stress on the institution.
Shrugging off all these, in its UFS 2024, the bank grew its EPS from 859k to 2090k. Representing a growth of 143% and an earnings yield of 43%.
The only more information the market is expecting from the bank before the start of the rally in its price is the DPO (Dividend Pay Out). If the bank surprises the market with a significant dividend declaration, the price will experience serious volatility, albeit in the northward direction.
🔰 What are the stocks to watch?
MTN, Lafarge (Wapco), Dangsugar, Nascon, Access Corp, FCMB, Ellah Lakes and a host of others
Click on the link below to learn more 👇
