Nigeria’s Equities Market Starts Q4 Positively, Anticipating Q3 Earnings Season

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Nigeria’s equities market has begun the fourth quarter of 2023 on a positive note, aiming to recover recent losses. Analysts expect investor focus to shift towards companies’ Q3 earnings. They recommend buying shares of key companies like Access Corporation, FBN Holdings, FCMB Group, Fidelity Bank, GTCO, and Zenith Bank. Additionally, the Debt Management Office (DMO) is offering FGN Savings Bonds with attractive annual coupons. While market performance has been somewhat bearish recently, analysts believe selected undervalued stocks present opportunities for returns in excess of 15 percent.

Key Points:

  • Nigeria’s equities market has started Q4 2023 on a positive note, aiming to recover from recent losses.
  • Analysts anticipate investor attention shifting towards companies’ Q3 earnings reports.
  • Recommended stocks for investment include Access Corporation, FBN Holdings, FCMB Group, Fidelity Bank, GTCO, and Zenith Bank.
  • The Debt Management Office (DMO) is offering FGN Savings Bonds with annual coupons of 11.074 percent and 12.074 percent for two and three-year tenors respectively.
  • Despite recent cautiousness in the foreign exchange market, the Central Bank of Nigeria’s governor expressed confidence in the economy.
  • Market watchers await communication from the CBN regarding the postponed September Monetary Policy Committee meeting.
  • While the market experienced bearish sessions recently, analysts believe undervalued stocks with strong fundamentals present opportunities for returns.
  • Selected top stock picks include GTCO, Zenith Bank, Access Corporation, FBN Holdings, FCMB Group, Fidelity Bank, Lafarge Africa, Julius Berger, and MTNN.
  • Meristem analysts expect negative sentiment to persist due to limited positive triggers, but they anticipate potential bargain hunting activities.
  • Their top stock picks for the week are GTCO (expected return of 33 percent), Fidson (51 percent), AIICO (15 percent), and Lafarge Africa (15 percent).

Analysis: Nigeria’s equities market is showing signs of a positive start in Q4 2023, with investor attention shifting towards Q3 earnings reports. Analyst recommendations focus on fundamentally sound stocks, reflecting cautious optimism. The availability of FGN Savings Bonds with attractive coupons and potential opportunities in undervalued stocks present avenues for investment. However, analysts remain vigilant about potential market dynamics and advise investors to carefully evaluate options.

BD

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