With the earnings season upon us, investors are getting a glimpse of what their investment could become in future, and for some, its more growth or more losses.
The combination of earnings, operational decisions and economic environment are expected to weigh on capital market’s confidence towards companies; such as Union Bank, BUA Cement, PZ Cussons, amongst others, as they go on with their trading activities.
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The Nigerian lender closed last week as one of the best gainers in the capital market, after the company reported earnings growth of 12.7%, alongside a 12.5% in profit after tax for H1 2022.
Shareholders of Union Bank saw their investment appreciate by 7.84% after five days of trading last week, which was the period of its financial disclosure, as the earnings growth drove positive sentiments among investors.
This triggered high demands for Union Bank stocks, causing the share to rise in value by N0.40kobo, closing the week with N5.50kobo, above the N5.10kobo it started the week with. It therefore signals the equity among sound stocks going into this week.
While BUA Cement had reported its revenue grew by 51.7% in Q2 2022, the growth was overshadowed by the 47.3% rise in cost of sales to the market.
The company spent more than the N91.05 billion profit it recorded in Q2 on producing its products, as expenses grew to N97.5 billion, surpassing the N66.15 billion disbursed for the same purpose in Q2 2021.
Rise in cost of sales left BUA without profit during the period, threatening the projected value shareholders expect on their investment in the cement manufacturer in longterm, as it forces the company to increase debt, and increases debt financing cost, considering the US has hiked interest rate.
Investors holding PZ Cussons stocks lost -18.27% of their investment after five days of trading last week, resulting to the equity ending the session as the biggest loser.
And it will be going into this week on the back of last week’s sell off, creating fear among investors of further stock dump, which will pile up shareholders losses – so investors are advised to trade cautiously as the session resumes.
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