Investment and economic experts at Bancorp Securities Limited, one of Nigeria’s investment research and consultancy firms, have predicted sustained mixed trading sessions on the Nigerian bourse this week as investors bargain hunt and cherry-pick fundamentally sound stocks.
The analysts gave this projection in the firm’s ‘Weekly Stock Recommendations: Aug 29th– April 2nd 2022’ report circulated to our correspondent yesterday.
Even then, the firm still recommended five stocks to investors as strong buy based on the listed companies’ recent financial and other performance indices scorecards.
The stocks include WAPCO (Lafarge Africa Plc), MTNN (MTN Nigeria Plc), ZENITH (Zenith Bank Plc), GTCO (Guaranty Trust Bank Plc), and UBA (United Bank for Africa Plc).
The firm noted that National Bureau of Statistics (NBS) released the GDP report for Q2 2022 last week which indicated sustained positive GDP growth as real Gross Domestic Product grew by 3.54% year-on-year (y/y) in Q2’ 2022, higher than the Q1’22 uptick of 3.11%.
According to the analysts, the Q2 2022 GDP growth rate signaled sustained growth for the seventh consecutive quarter since the recession witnessed in 2020, adding that the growth was largely driven by the non-oil sector buoyed by the services sector which grew by 6.70%.
A further appraisal of the NBS’ report findings also showed that the oil sector contracted by -11.77% y/y in Q2’ 2022, as the sector continues to grapple with low crude oil production levels given massive theft and vandalism.
The firm’s experts noted that the positive development “perhaps tossed the equities market to a positive close, despite the prevailing negative sentiments”, adding that the surprisingly good interim dividend announcement prompted renewed buying interest in STANBIC, and AIRTEL shares continued decent patronage on the dual-listing stance.
On the previous week performance of the equities market, Bancorp Securities reported that these gains among a few other bellwether stocks helped the ASI to close positive, thus increasing the NGX All-Share Index by 0.6% week-on-week (w/w) to settle at 49,682.15 points.
As expected, the report indicated that the market capitalization increased by N168.0bn to N26.8tn and YTD return strengthened to 16.3%, up from the previous 15.6% return.
The report further stated: “Similarly, activity level improved as total volume and value traded grew 11.1% and 24.8% w/w to 914.4m units and N15.26 bn respectively. The top traded stocks by volume were MBENEFIT (147.1m units), FBNH (95.1m units), and JAIZBANK (63.3m units) while NESTLE (N3.8bn), MTNN (N2.1bn) and ZENITH (N1.2bn)
“Meanwhile, performance was down across sectors within our coverage with the exception of the Insurance Index which advanced 3.38% due to buying interest in NEM, MBENEFITS and ROYALEX.
“The Industrial Goods and Oil & Gas indices led laggards, down 4.2% and 4.1% w/w respectively on the back of losses in DANGCEM, BUACEMENT, SEPLAT, and ETERNA. While, the Consumer Goods and Banking indices dipped 1.7% and 0.7% w/w respectively following price decline in NNFM, VITAFOAM UBN, and ACCESSCORP”, the firm added.
