Court battle, regulatory clampdown, other reasons Transcorp Plc, GTCO, Union Bank are stocks to watch this week

The Nigerian stock market will open this week’s trading on Tuesday due to the Eid el-Fitr public holiday on Monday.

During trading sessions this week, Transnational Corporation (Transcorp), GTCO and Union Bank are stocks to watch, following the influence of a new investor, regulatory clampdown, bad investments and the court battle that threatens stability.

Ripples Nigeria stocks watchlist is a selection of stocks monitored for viable trading or investing opportunities. An investor may casually generate a list of equities for investment purposes. But we have taken the pain to do that based on certain parameters in order to save you that hassle.

Kindly note that Ripples Nigeria Stocks Watchlist is not a buy, sell or hold recommendation. It is advisable to consult your financial advisor before making any investment decision.

Transcorp Plc

Transnational Corporation (Transcorp) Plc has been one of the most sought-after shares in the Nigerian stock market, as Femi Otedola joins the firm’s majority shareholders.

Last week, shareholders recorded a 44.97 per cent increase in their investment value after reports that Otedola was buying the company’s shares spurred demand for the equity.

This made Transcorp Plc the best-performing equity after four days of trading last week, as its stock price rose to N2.45 kobo per share, from N1.69 kobo.

Consequently, Transcorp will open the stock trading this week red hot, although, with the excitement of Otedola’s presence wearing off, profit-takers could cash in on the bearish run.

GTCO

Guaranty Trust Holding Company (GTCO) subsidiary, GTBank, lost 21 per cent of the parent firm’s net profit following a bad investment in Ghana’s securities.

READ ALSO:Transcorp, First Bank and Fidelity Bank are stocks to watch this week

GTBank lost N35.55 billion in its investment tied to the Ghanaian government’s securities; Treasury bills, Eurobonds, Local US bonds and Cedis bonds.

The loss was recorded in 2022, the same year GTCO reported a N169.17 billion net profit, which is below the N174.83 billion profit after tax at the end of 2021.

This will affect the capital base of the company, weighing on its ability to improve the dividend payout to shareholders.

It could affect the capital market’s confidence towards GTCO in the capital market, as the firm also lost N128.6 million to a regulatory fine from the Central Bank of Nigeria (CBN) in 2022.

The fine bothers on failure to meet several regulatory requirements, which include the Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) examination.

Union Bank

On Thursday, Ripples Nigeria reported that Union Bank is facing a N1.485 trillion lawsuit that threatens the commercial bank’s financial stability.

The Federal High Court already awarded the N1.495 trillion against Union Bank in favour of the claimant, but the lender is fighting against the judgement debt in the Supreme Court.

This is a cause for concern considering the N1.495 trillion debt judgement is 53.2 per cent of the company’s N2.79 trillion total assets.

It will put pressure on the capital base of the firm should it lose the case, making it impossible to meet its commitment to shareholders – although Union Bank projects a positive outcome.

It’s left to see how shareholders react to Union Bank when trading in the stock market resumes this week for another four days of activities.

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