Transnational Corporation (Transcorp) Plc, Access Holdings and Nigerian Breweries are some of the stocks to watch out for this 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.
Transnational Corporation (Transcorp) Plc has been the centre of attention in the stock market in the past three weeks due to Femi Otedola’s decision to buy the firm’s shares.
During this period, Transcorp’s shareholders saw the value of their investment rise by 122.8 per cent, as demand for the firm’s shares skyrocketed.
But the interest in Transcorp seems to be wearing off amid reports that Otedola has exited the company by selling his shares to Tony Elumelu.
After reports emerged on Friday disclosing Otedola has divested, Transcorp’s share fell in value by 9.93 per cent, as investors reacted negatively after the report.
This ended a three-week bullish run. With the confidence decline in the capital market on Friday, investors need to trade with caution, as profit-takers could extend their activities into this week, further tanking Transcorp’s share.
Access Bank made the news last week after the firm’s Group Managing Director and Chief Executive Officer of Access Holdings, Herbert Wigwe, bought 1.13 billion shares.
It is not known if Wigwe bought the shares because he has confidence in Access Holdings’ growth prospects or to prevent a powerplay within the company similar to the situation in Transcorp Plc.
Ripples Nigeria had reported that Femi Otedola surprised the capital market after acquiring billions of Transcorp shares to take control of the firm from its Chairman, Tony Elumelu.
Elumelu was forced to buy more shares to snatch back control of Transcorp before Otedola later reportedly agreed to sell the shares he bought to Elumelu, ending the powerplay between them.
Prior to the recent acquisition by Wigwe, Access Holdings’ GMD only held 4.93 per cent control of the company. But after buying 1.13 billion shares, his stake increased to 8.13 per cent.
Acquisition or sales of shares by top-level executives like Wigwe is usually a signal or roadmap for minority investors or the capital market on what action to take regarding a firm’s shares.
A buy could increase confidence and a sell negatively impact on investors’ confidence towards a firm’s shares in the capital market.
Nigerian Breweries recorded N10.71 billion loss after tax in the first quarter of 2023, with the brewer’s revenue declining from N137.77 billion recorded in Q1 2022 to N123.31 billion during the same this year.
The company blamed the Central Bank of Nigeria (CBN) of Nigeria for the disappointing turnover, stating that the Naira redesign policy, which resulted in the Naira crunch, affected the economy, contributing to its low revenue.
With the N10.71 billion loss, Nigerian Breweries’ ability to pay shareholders will be affected, considering dividend is paid from the net profit to investors holding the company’s shares.
This comes at a period the capital market’s confidence in Nigerian Breweries is on a decline, considering year-to-date, the firm’s share has fallen by 22 per cent.
Nigerian Breweries has been struggling to attract equity investors prior to the release of the financials. After the earnings report was released last week Wednesday, the share of the firm depreciated by 12.32 per cent.
Amid the financial struggle of the firm, investors have dumped Nigerian Breweries’ shares in the first month of the second quarter of this year, so investors need to trade with caution going forward.
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