Despite the negative performance of the Nigerian equities market in 2018, Cement Company of Northern Nigeria (CCNN), Unity Bank, Sterling Bank and other 22 stocks recorded gains.
The year recorded 25 gainers and 69 losers. The market capitalisation during the period under review depreciated by N1.89 trillion as it closed at N11.720 trillion in 2018, while the All-Share Index shed 17.81 per cent during the year to close at 31,430.50 basis points.
Reviewing the gainers for 2018, three stocks grew their share prices by triple digit, 17 stocks recoded double digit growth, while six stocks achieved single digit growth.
CCNN led the gainers for the year by 104.21 per cent, while Unity Bank followed with a growth of 101.89 per cent. Sterling Bank rose by 75.23 per cent, NEM Insurance up by 62.65 per cent, Learn Africa appreciated by 54.55 per cent, Caverton Offshore Supports Group up by 48.84, while Vitafoam Nigeria gained 46.67 per cent.
Also, Diamond Bank by 45.33 per cent, Custodian Investment gained 45.24 per cent, Fidson Healthcare, 33.78 per cent growth, Beta Glass appreciated by 33.11 per cent, Newrest ASL Nigeria rose by 32.77 per cent, NPF Microfinance Bank gained 32 per cent, FCMB Groups increased by 27.70 per cent and Wema Bank and Aiico Insurance up by 21.15 per cent, each.
Eterna expanded by 15.76 per cent, Stanbic IBTC Holdings appreciated by 15.54 per cent, Okomu Oil up by 12.57, while Linkage Assurance, Neimeth International Pharmaceuticals, Medview Airline, Chemical and Allied Products (CAP), Seplat Petroleum Development Company and Berger Paints grew by 9.09 per cent, four per cent, 3.20 per cent, 2.20 per cent and 1.30 per cent, respectively.
A further breakdown linked CCNN stock’s dominance to impressive corporate earnings and merger with Kalambaina Cement, a subsidiary of BUA Cement.
Capital market analysts said that the synergy impacted positively on CCNN shares on the exchange during the period under review, noting that the share price would experience further growth when the merger was consummated.
They added that the merger would result to enhanced production capacity and would as well boost earnings power.
Also, Unity Bank emerged as one best performing stock, attributable to the bank’s efficiency in curtailing cost, better market focus, revamp of electronic channels and increasing customer centricity which are beginning to restore market confidence in the brand.
The bank recently posted ratio of its non-performing loans which stood at zero per cent, describing it as a clear indication of management’s excellent risk assessment. In its 2017 annual report, Unity Bank took some corporate actions resulting in the writing off of N16 billion goodwill that arose from legacy merger and derisking of toxic assets that strategically cleaned up the bank’s loan books.
For Sterling Bank performance, it was noted that the bank’s shares rally after the lender notified its shareholders on plans to issue up N35 billion in Series 6 and 7 commercial paper under its N100 billion commercial paper programme that was established in 2016. According to the Sterling Bank, the proceeds of the CPs are intended to boost the working capital financing need of the bank.
Speaking, the chief operating officer of InvestData Consulting Limited, Mr. Ambrose Omordion said the Industrial Goods and banking stocks dominated the best performance table for the year 2018, a situation that may likely continue in the New Year with other stocks that had suffered losses within the period, rebounding on low attraction ahead of the 2018 full year earnings season in first quarter, 2019 and outcome of the February Presidential elections, despite weak economic fundamentals.
Omordion said that the pre-election year left most equities on the Nigerian Stock Exchange (NSE) grossly undervalued owing to the free fall prices strength of negative sentiment, weak economic fundamentals and mixed scorecards from listed companies, even as data by the National Bureau of Statistics (NBS) showed that Nigeria’s economy had decline in two consecutive quarters before the recent Q3 GDP data revealed growth. The Q4 data may likely look up due to the festive season and end of year activities, amidst the electoral season spending.
He expected that the Central Bank of Nigeria (CBN) in the new year would review its monetary policy stance as part of stabilizing price, while checking inflation even at the detriment of economic activities and export drive.
“The return of foreign portfolio investors this year depends on the outcome of election and whether the present government is returned, or a new one successful installed come May 29, 2019,” he said.
The managing director of HighCap Securities Limited, Mr. Ambrose Omordion said that in 2019, investors should keep their gaze on blue chip stocks in the banking, services, conglomerates, industrial goods, energy and consumer goods sectors, most of which suffered huge losses, despite recording earnings uptrend in the previous financial year-end and are still having strong earnings power enough to further drive their prices in 2019.
Omordion also, noted that the bearish trend may likely continue this year, but the 2018 full year earnings reporting season would drive valuation and prices within a short period and calls for proper timing to know to when to take position and when to exit, in order to protect capital.
He added that the global economic outlook for 2019 remains unpredictable as factors militating the economy are many, ranging from politics, falling commodities prices, trade war tension, Brexit and others likely to shape the world as policy changes continue across U.S, Europe and the Middle East.
He called on investors to plan their trading and investing this year by sticking to instructions and rules while taking advantage of low prices and navigating between opportunities and uncertainties in 2019.