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| [20-Sep-2021] Investors reposition for interim dividends as financial stocks dominate trading |
| Although transactions on the Nigerian Exchange Limited (NGX) reopened on a bearish note, repositioning for interim dividend-paying banking stocks fueled activities last week. Consequently, the all-share index (ASI) and market capitalisation appreciated by 0.06 per cent and 0.05 per cent to close the week at 38,943.87and N20.29 trillion respectively. At the close of trading NGX Banking, NGX Insurance, NGX MERI Growth, NGX Consumer Goods, NGX Oil/Gas and NGX Industrial Goods indices, depreciated by 0.79 per cent, 0.58 per cent, 0.12 per cent, 0.21 per cent, 3.35 per cent and 0.24 per cent respectively while the NGX ASeM, NGX Growth and NGX Sovereign Bond Indices closed flat. Also, Access Bank Nigeria Plc raised its half-year net profit by 42.4 per cent. The bank’s profit after tax also rose to N86.93 billion, up from N61.03 billion achieved in the corresponding period in 2020. Interest income grew by 29.56 per cent to N319.7 billion over the period. Similarly, United Bank for Africa Plc posted a profit after tax (PAT) of N60.6 billion in its half-year (H1) operations as against N44.4 billion recorded in 2020. The bank’s profit before tax (PBT) also rose from N57.1 billion to N76.2 billion, translating to an annualised return on average equity (ROE) of 17.5 per cent as against 14.4 per cent in 2020. The percentage increase in PAT was 36.3 per cent while PBT rose by 33.4 per cent. The Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion urged investors to take advantage of the market pullback to reposition for interim dividend and undervalued stocks. He stated that trading within their ‘buy’ ranges is a situation that is expected to attract funds into the equity space given the high dividend yields capable of serving as a hedge against inflation. Analysts at Cordros Capital said: “We expect the lull in the local bourse to persist until positive triggers in the form of lower FI yields and improved dollar liquidity spur buying interest from domestic and foreign portfolio investors. “That said, we expect risk-averse investors to recalibrate their portfolio towards sound stocks with attractive dividend yields in the week ahead. “However, we advise investors to take positions in only fundamentally justified stocks as the fragility of the macroeconomic environment remains a significant headwind for corporate earnings” Last week, a turnover of 856.289 million shares worth N10.8 billion was recorded in 15,663 deals by investors on the floor of the exchange, in contrast to a total of 1.4 billion units valued at N13.1 billion that changed hands in 19,315 deals during the preceding week. The financial services industry (measured by volume) led the activity chart with 583.038 million shares valued at N3.9 billion traded in 7,894 deals; thus contributing 68 per cent to the total equity turnover. The consumer goods industry followed with 62.961 million shares worth N3.197 billion in 2,579 deals. The third place was ICT Industry, with a turnover of 45.745 million shares worth N1.6 billion in 775 deals. Trading in the top three equities namely Access Bank Plc, Universal Insurance Plc and Wema Bank Plc (measured by volume) accounted for 211.151 million shares worth N789.8 million in 1,403 deals, contributing 24.66 per cent and 7.35 per cent to the total equity turnover. A total of 106,810 units of Exchange Traded Products (ETPs) valued at N1.9 million were traded last week in 21 deals compared with a total of 2,016 units valued at N537,038.08 transacted during the preceding week in 10 deals. Also, 51,261 units valued at N52.9 million were traded in 26 deals compared with a total of 93,019 units valued at N99.809 million transacted in 39 deals. Source:© Copyright The Guardian Online |
| [2021-09-20] Investors reposition for interim dividends as financial stocks dominate trading |