Penny stocks’ prices hit 52-week high on positive market sentiment

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Equities’ trading activities on the Nigerian Exchange Limited, NGX, was mixed as the All-Share Index, ASI, ended the week flat at 39,485.65 points despite the heartwarming 5.01 per cent growth in the Gross Domestic Product, GDP, report for the second quarter of the year, Q2’21, announced last Thursday.

This signaled there was cautious trading ahead of month-end in the midst of earnings expectations on the big banks.

Meanwhile, shareholders of the banks have blamed the Central Bank of Nigeria, CBN, for withholding the Tier-1 banks results even when it is almost two months after the half year.

Commenting, Chairman of New Dimension Shareholders Association of Nigeria, Mr Patrick Ajuda said: “The blame is squarely at the door step of their primary regulator, CBN which have not yet given them the approval. Therefore, as shareholders of the bank, we call on CBN to act expeditiously by giving approval as delay is denying us the opportunity of enjoying our interim dividend.”

Another shareholder, Chairman of Progressive Shareholders of Nigeria, PSAN, Mr Boniface Okezie said: “My take on that is the bank have  submitted their accounts    to CBN and awaiting    approval from them. The cause for the delay I guess is just that the CBN is not working actively as they ought to do.

“For now we are contemplating as to what the banks are going to give out in terms of interim dividend. And my advice to the regulators is that they must hasten up to give approval when the bank and its auditors have completed their works and pass to them.

“There should not be unnecessary delay as this may end up causing anxiety among the investing public.”

Another shareholder activist, Moses Igbrude said: “The release of quarterly reports is compulsory and mandatory for all listed entities on the capital market. 

The delay in releasing half year results by four tier-1 banks may be due to regulatory compliance but the banks must bear in minds there are timeline for the release of results as stipulated by Securities and Exchange Commission, SEC. I believe they will release the half year results before the deadline set by SEC or failure will attract penalty which will not be good for the banks and the shareholders.”

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Meanwhile, further analysis of the market showed that bargain hunting activities in First Bank Holdings led to gain of 1.4 per cent, Access Bank 1.1 per cent, Zenith Bank (0.4 per cent) and MTN Nigeria 0.3per cent. Consequently, the  Month-to-Date, MtD, and    Year-to-Date,YtD, returns were flat at 2.4 per cent and -2.0 per cent, respectively.

Activity levels were mixed, as trading volumes rose by 16.7 per cent Week on Week,  W-o-W, while value traded declined by 33.5 per cent  W-o-W. Across sectors, the Insurance index went up 1.1 per cent, Banking index 0.3 per cent and Oil and Gas index 0.1 per cent while the Consumer Goods index declined -0.4 per cent and Industrial Goods index  -0.2 per


Commenting on the market performance, analysts at Cordros Securities Limited said: “This week, we believe earnings from the big banks in the coming week will bring some breath of fresh air to the local bourse. Particularly, as the declaration of interim dividends will accompany the results. Overall, we advise investors to seek trading opportunities in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”

Analysts at InvesData Consulting Limited, said : “Despite the seemingly directionless nature of the market, medium and low priced stocks like UPDC, Capital Hotel, Vitafoam, Honeywell, United    Capital, and others are breaking out resistance levels and making new 52-week high on improved volume and positive market sentiment, regardless of the low traded volume that shows the absence of institutional investors at the market arena at this point.

On market outlook, analysts at InvestData said : “ We expect the ranging trend to continue as the market awaits industry news ahead of month-end window dressing, first-tier banks results and    as well as the continued repositioning of portfolios ahead of the year last quarter.

We note also that some stocks are trading within their ‘buy’ ranges to become more attractive at this point for income investors and traders, even as the market anticipates positive news, while oil price continues to oscillate above $68pb to support the global economy and stock market recovery across climates.”

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