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STOCKS TO WATCH: Seplat, Dangote Cement, Bank investors need to trade with caution

Published

1 year ago

March 13, 2023

The stocks to watch list this week includes Seplat, Dangote Cement and Bank stocks as the Nigerian stock exchange resumes for another trading week.

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.

Seplat

Seplat has been in a negative light in recent weeks which doesn’t portend well for the oil and gas company in the stock market.

The firm’s leadership is currently under scrutiny and this has led to the suspension of its Chief Executive Officer, Roger Brown, from his position for a week.

Brown was barred from discharging his duties as Seplat’s CEO amid a court petition against him by aggrieved stakeholders. His visa and working permit have also been seized by the Nigerian government.

The leadership issue comes at a period the management is unable to obtain approval from FG to complete the acquisition deal with ExxonMobil.

Uncertainty around the completion of the deal and Seplat’s leadership stability could have an effect on equity investors’ confidence in the firm’s growth prospects.

Already, the value of shareholders’ investment has fallen by -9.43 per cent since the Ministry of Interior wrote to Seplat on March 3, 2023, that Brown has been banned from working in Nigeria.

So, investors should trade with caution as the Nigerian stock market resumes for another trading session this week.

Dangote Cement

Shareholders of Dangote Cement are set to earn from a share buy-back programme initiated by the company to consolidate ownership and reduce the financial burden of dividends on the firm.

The share buy-back, which will last for one year, ending on December 12, 2023, is expected to increase Dangote Cement’s equity value in the stock market, as it reduces the outstanding shares.

This will raise the value of investments held by shareholders in Aliko Dangote’s cement manufacturer, but it will come at a cost to the company in the short-term, as well as free up more capital in the long-term.

In 2023, Dangote Cement shareholders will gain from two sources; share buy-back and dividends during the year, as a result, Dangote Cement is one of the stocks to watch out for this week and towards the end of the year.

Banks

In the first two weeks of March, about N87.4 billion in market valuation has been lost by 10 Nigerian commercial banks in the stock market.

The affected banks are First Bank, Zenith Bank, and Access Bank, Guaranty Trust Bank, United Bank for Africa, Stanbic bank, Sterling Bank, First City Monument Bank, and Jaiz bank.

Ripples Nigeria understands that the losses came amid the difficulty of the banks in making the country’s currency notes; N200, N500 and N1,000 notes available for Nigerians to finance their daily activities.

As a result, livelihood or trade has been affected, leading to the destruction of bank properties. The losses show investors’ confidence is wearing thin, so traders should be cautious on the exchange floor, to avoid being dragged into the dip.

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