Amid the stock market rout and a gradually growing economy, the policy inconsistency of the Buhari-led administration continue to de-motivate investors from naira assets, however, some firms have seen their shares advance in 2019.
The above means that there is light at the end of the tunnel for the broader economy that grew some 2 percent in the first three months of the year, its strongest first-quarter growth since 2015.
Among the 30 most-capitalized stocks on the Lagos Exchange, four including Nigeria’s third-largest miller, Dangote Flour, Cadbury, Sterling Bank and Union Bank, delivered most value to investors, and outshined the benchmark index, which has returned 6.6 percent losses on Monday.
These four stocks also outweighed the NSE-30 year-to-date performance that is down some 12 percent.
Dangote flour has the best year-to-date performance among NSE-30 firms with 139.7 percent return despite negative bottom-line spurred by 16.31 percent decline in receipt from flour as well as elevated operational expenses.
The strong appreciation in the miller’s shares is triggered by the N130 billion purchase consideration offered by food and agri-business giant, Olam International, to acquire the miller’s total 5 billion shares outstanding.
Mid-tier lenders Sterling bank and Union bank returned 21.05 percent and 21.43 percent to investors respectively since the start of the year. This translates to a monetary appreciation of N11 billion and N35 billion respectively.
Sterling’s tangible share advance is largely on the back of its relatively earning figures in full year 2018 and first quarter 2019. The lender posted a double-digit growth of 15 percent in 2018 full year to N9.2 billion partly due to 18.1 percent surge in non-interest revenue, and further sustained momentum with a modest 5 percent rise in bottom-line.
Union Bank’s bottom-line dipped 4 basis points to N5.2 billion on the back of lowered interest income spurred by low interest rate environment, but bottom-line was not severely battered, thanks to 39 percent surge in non-interest earnings.
Cadbury has seen its shares advance 2.5 percent since the year started, making it the only consumer goods player in the NSE-30 space with share appreciation.
The food products maker had its best earnings scorecards in two years. Top-line and bottom-line were at their peak at N36 billion and N823 million respectively since 2017, even as the firm maintained tempo in the first three months to March.
The Lagos bourse has been bullish in the last three trading days, thanks to enlistment of telecom giant, MTN Nigeria Plc, which is now the second largest-listed firm after Dangote Cement.
Analysts positioned that the local bourse would rally in the near term, but the market still need economic-enhancing policies for full recovery.
Israel Odubola
