In volume terms, the equity market in Nigeria was more than 50 per cent stronger in the just departed week and that ramped up the size of trade to 1.3 billion shares.
But, for a market that has remained dominantly inactive since January, that level of liquidity seems hard to sustain considering that FBN Holdings individually contributed 481.5 million units to Friday’s trade alone, with the quantity of shares exchanging hands alone accounting for nearly half of the entire week’s, meaning the volume jump was not broad-based.
For that reason, the optimism the change in volume will bring to investors and traders will likely be cautious.
The selection, a product of analytical market watch, offers a guide to entering the market and take strategic positions in hopes that equities will gain value with the passage of time, particularly in the short term.
This is not a buy, sell or hold recommendation. You may have to involve your financial advisor before taking investment decisions.
Eterna features on this week’s list on the dual strength of its half-year earnings performance and for trading below its intrinsic value, which makes it cheap for investment.
The energy firm reported a one-third surge in sales January through June during which profit jumped almost five fold and expects revenue to reach N70.4 billion in the first quarter.
Fidelity makes the pick for being priced well below its real value, meaning it stands a chance of significant appreciation in the short term and even beyond. It closed the last session at N2.41 per share at a PE ratio of just 2.05, making it the cheapest of the thirteen commercial banks currently listed on the bourse.
UNITED BANK FOR AFRICA (UBA)
UBA appears on the list on account of trading significantly below its actual value. Its PE ratio is 2.06 and its EPS is N1.20.
Fidson makes the selection on the basis of a growth of 57 per cent growth in revenue and 138 per cent in profit for the first half of this year. Considering the drug-maker’s closing price of N6.09 at the last trading session, the stock is currently priced below its intrinsic value with a PE ratio of 6.66.
NEM appears on the strength of its almost one-quarter expansion in sales and an increase of 29 per cent in profit at mid-year. The underwriter sees gross premium written rise to N25.5 billion and bottom-line to N4.1 billion come year end.
NEM’s PE ratio at the last trading session was 3.92 at N2 per share.
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