Stock Market Review: Meet The Top Winners Part 3

This week, we will be looking at the performance of stocks in the Nigerian stock market (NGX). We will identify the top gainers, key indices of assessment, and key news events that encouraged investors to inject new money into the stock market.

The week in review is week 7 of the year 2022. In the Nigerian stock market (NGX), the all-share index (ASI), which is the key instrument to assess the general performance of the capital market worldwide, was negative as the index declined four out of five times to close at 47, 140.48 bps.

Its decline represented a 189.32 basis point fall from the 52-week all-time high of 47,329.80 bps.

Factors responsible for this decline might be attributed to some institutional investors doing the "whale shark" on the stock market, i.e., making large withdrawals to either meet personal commitments or direct capital to other profitable ventures for the time being.

But overall, investors’ confidence in the Nigerian stock exchange is still relatively bullish compared to previous weeks.

What could have been responsible for this bearish outcome?

Several things may be responsible for this sudden surge of selling pressure on the domestic bourse.

1. The Contaminated Fuel Saga Continues: For more than two weeks, the scarcity of fuel brouhaha brought about by the contaminated fuel saga continues. Car owners still struggle to find fuel. In places like Abuja, Sokoto, Jos, and a few other places, car owners pay as much as N500 per liter just to get fuel to run their vehicles or generators. Some of the petroleum stocks declined marginally because of investors’ dissatisfaction with the way they are being handled.

2. Financial Statements: Since the early part of the year, the floor of the Nigerian stock exchange has continued to attract investors’ attention as some companies post their audited financial reports, while others that haven’t been releasing information yet release information about their releases soonest. Impressive results helped a lot of stocks enjoy an appreciable capital lift as the promise of dividend payment motivated new investors into doing the needful. A top investment banking group, United Capital Plc, promised to pay one of the biggest dividends to its shareholders.

4. Boardroom Resolutions and AGM: Boardroom resolution releases remain one of the key ingredients of equity market characteristics. Companies after strategic meetings, make public their resolutions for the benefit of their shareholders. These meetings are aimed at reassuring shareholders that the company is headed in the right direction. The same goes for annual general meetings (AGM).

5. Speculative events: Speculative dealings will continue to be a fundamental part of equity trading. People buy or sell stocks based on either hearsay or verifiable facts. That’s the way it goes.

6. Strategic Appointments: Strategic appointments also help to reassure shareholders that a company really knows what it is doing and where it is going. During the week, Flour Mills of Nigeria, Fidelity Bank Plc, and OANDO Plc made very important appointments. These appointments generally boasted the confidence of not only their shareholders but did the same for the entire equity market.

7. Industry conflict between Bua Foods, Dangote Sugar Refinery, and Flour Mill of Nigeria Plc: These three companies dominate the sugar industry and are key to the federal government's agenda to drive local production and self-sufficiency of sugar for the country. Unfortunately, three of them got entangled in a needless rift that generated a bit of media attention and stirred the market slightly as it affected the buying momentum of investors who, properly, would have helped drive the bullish momentum for the equity market.

8. Good News: The good news from Julius Berger Plc's going into cashew processing agro-industry and MTN rebranding helped drive buying momentum in the market as institutional investors expressed excitement about the future of profit-making.

9. Director dealings: Though not strong enough to cause a major shift in the market direction for any share or equity market in general, they are still capable of driving momentum or staying still.

Who were the top gainers?

We used one major parameter to identify the best-performing stock. The parameter used was the percentage climb that was reflected in the stock growth value.

The top gainers are:

1. LearnAfrica, better known as LEARNAFRI on the NGX Stock Exchange, is a company that is engaged in the publishing and distributing of educational materials for all levels of learning, including nursery, primary, secondary, and tertiary. The company operates in the publishing of books segment. It markets reference, professional, and general reading materials. It offers teacher training and development programs, digital content provisioning, and educational consultancy services. The company started trading with an opening price of NGN1.50/UNIT and grew by exactly +39.64% during the week to close at NGN2.20/UNIT on Friday, February 18, 2022, making the company the toast of investors for week 7 of 2022.

2. RTBRISCOE came second as the company's share price appreciated by +28.97% throughout the week to close at NGN60.00 on Friday. The company appeared in the gainers’ chart thrice.
3. VERITASKAP came third as the company's share price appreciated by +18.22% throughout the week to close at NGN0.24 on Friday. The company also appeared in the gainers chart twice.
4. SCOA: The company's share price appreciated by +17.56% throughout the week to close at NGN2.35 on Friday. The company appeared in the gainers chart twice.

The Equity Market Valuation Situation

The market opened with NGN25,360.70 trillion and closed at NGN25,406.15 trillion, gaining NGN45.45 billion in the process.