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Julius Berger, Cadbury, Lafarge catch equity investors’ interest


News » Business
Nigeria

IMAGE: Julius Berger, Cadbury and Lafarge logos »

Dec.02.2013

 

Increasing demand for the shares of Julius Berger Nigeria plc, Cadbury Nigeria plc, and Lafarge Cement Wapco plc has impacted hugely on the pricing of these equities, BusinessDay trend watch has found.

Looking at the performance of these stocks from January 2, 2013 to November 26, 2013, out of 30 largely capitalised stocks at the Nigerian Stock Exchange (NSE), investors in the trio reaped the highest returns resulting from their share price appreciation.

For instance, the share price of Julius Berger Nigeria plc which led the pack, rose from year open level of N34.65kobo to N70  (an increase of 102.02 percent) as at November 26, 2013; Cadbury Nigeria plc rose from N29 to N57 (up 96.55 percent); while Lafarge Cement Wapco plc rose from N57.50kobo to N105.25kobo (up 83.04 percent).

Before the recent sell pressure weighing on the Nigerian stock market, price appreciation witnessed across most of these large cap stocks contributed in making the bourse performance index attain 39,246.05 points with corresponding 39.77 percent in year-to-date (ytd) return.

Other runners up in this trend watch are stocks like Nestle Nigeria plc which rose from N700 to N1, 250 (an increase of 78.57 percent); Stanbic IBTC Holdings plc, which rose by 78.18 percent (from N11 to N19.60); Dangote Sugar Refinery plc also rose by 72.47 percent from N6.43kobo at the beginning of the year, to N11.09kobo as at November 26; United Bank for Africa plc share prices rose by 64.47 percent from N4.56kobo to N7.50kobo.

In addition, UACN plc rose by 57.98 percent from N42 to N66.35kobo; Dangote Cement Plc rose by 51.44 percent from N128.10kobo to N194; GlaxoSmithKline Consumer Nigeria plc rose by 43.68 percent from year open level of N45.10 to N64.80kobo.

With strong trading volume, the Nigerian equities market in the later part of the period under review, traded higher, defying analysts’ expectation of profit taking. Some of these large cap stocks are either fairly valued for the year or pricey at current valuation.

As the Nigerian stock market out-performs other Exchanges across the Sub Saharan Africa (SSA) region, it further helped to reinforce foreign investors’ appetite for Nigerian equities –with some of these stocks that recorded sterling performance as major beneficiaries from the foreign portfolio inflow (FPI).

In contrast, BusinessDay trend analysis in the review period shows that FCMB group plc, Skye Bank plc, FBN Holdings plc, and Guinness Nigeria plc are the laggards among the 30 large cap stocks.

FCMB group plc dropped from N4.10kobo to N3.45kobo (negative of 15.85 percent); Skye Bank plc moved down from N4.73kobo to N4.05kobo (down 14.38 percent); FBN Holdings plc dropped from N17.10kobo to N16.03kobo ( a decline of 6.26 percent); and Guinness Nigeria plc declined by 5.45 percent from year open level of N275 to N260 as at November 26.

In addition to the aforementioned, other stocks that make up the NSE 30 Index which tracks the top 30 companies in terms of market capitalisation and liquidity are Nigerian Breweries plc, which rose by 11.5 percent, from N148 to N165.02; International Breweries plc rose from N16.20 to N22, up 35.80 percent; Ecobank Transnational Incorporated plc rallied by 33.24 percent, from N11.25kobo to N14.99kobo; Access Bank plc gained 6.23 percent from N9.31 to N9.89kobo;  and Oando plc gained 20.87 percent from N12.41 to N15.

In addition, Ashaka Cement plc was up by 14.67 percent from N18.40 to N21.10; GTBank plc rose from N24.60 to N27.50, up 11.79 percent; Fidelity Bank plc was up by 15.74 percent from N2.35 to N2.72; while PZ Cussons Nigeria plc rose by 30.36 percent from N28 to N36.50.

Others are Diamond Bank plc which gained 31.85 percent from year open level of N5.40 to N7.12; Union Bank of Nigeria plc also appreciated by 35.69 percent from N7.37kobo to N10; Dangote Flour Mills plc rose by 18.15 percent from N8.21kbo to N9.70kobo; Unilever Nigeria plc appreciated by 30.64 percent from N47 to N61.4; Zenith Bank plc rose from N19.40 to N21.22, up 9.38 percent; Flourmills Nigeria plc gained 30.77 percent from N65 to N85; while Total Nigeria plc appreciated by 36.02 percent from N17.10 to N16.03.

Despite recent trends likened to price correction, analysts said the negative market breadth and waning trading activity reinforce their view that the party in the equity market is over for the year, as they expect the NSE Index to trade in tight range through the year, to justify their expectation of 35percent year-end return target for the NSE Index.

Till date, analysts remain bargain hunters in the equity market, as they seek lower entry prices in value stocks, to build new positions ahead of the 2014 “January rally.

“The return in the equity market is typically clustered within a short period, which we foresee to be first-half (H1) in 2014, as we think local political risk (on the run-up to 2014 election) and stimulus tapering in the United States may dampen equity prices in second-half (H2) 2014. Thus, we believe early birds in the equity market will harvest the best gains next year. Thus, build new positions ahead of 2014 rally,” analysts at UBA Capital recently advised investors.

Article Credit: BusinessDay Newspapper

Updated 3 Years ago
 

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