Among the 30 most capitalized companies on the Nigerian Exchange Limited (NGX), entities associated with billionaire businessman Tony Elumelu have delivered exceptional returns to investors in 2023. Notably, Transcorp Hotels Plc, Transnational Corporation Plc (Transcorp), and United Bank for Africa Plc (UBA) have outperformed other large-cap stocks on the NGX.
Key Points:
- Top-Performing Elumelu-Linked Companies:
- Transcorp Hotels Plc: 720.8% returns YTD.
- Transnational Corporation Plc (Transcorp): 515.9% returns YTD.
- United Bank for Africa Plc (UBA): 219.1% returns YTD.
- Increased Buy-Side Activity:
- Recent buy-side activity in the Nigerian stock market is attributed to investors positioning in value stocks ahead of full-year financial reports and potential corporate rewards like dividends.
- Analysts’ Observations:
- Analysts from Lagos-based United Capital Research anticipate strong investor sentiments, particularly in the banking sector, driven by impressive performance and anticipation of full-year 2023 earnings. However, they caution about potential profit-taking activities following market highs.
- Financial Performance Highlights:
- Transcorp Hotels: Q3 2023 showed robust YoY growth in revenue (31.76%) and profit (62%).
- Transcorp: Reported Q3 2023 revenue of N128 billion, a 36% increase, and operating income of N42.7 billion.
- UBA: Q3 2023 gross earnings grew by 115.2%, reaching N1.309 trillion, with profit before tax rising by 262% to N502.01 billion.
- Market Returns YTD:
- The Nigerian stock market has recorded a 41.27% return YTD, driven by increased investor interest in oil and gas, banking, consumer goods, and insurance stocks.
- Performance of Other NGX-30 Member Companies:
- Notable returns from other companies include Access Corporation (158.8%), Dangote Sugar (257.6%), Sterling Financial Holding Company (198.6%), MTNN (14%), and GTCO (72.2%).
- Market Capitalization Increase:
- The significant returns from firms and new listings in 2023 have contributed to pushing the market higher by over N11.69 trillion.
- Zenith Bank Performance:
- Zenith Bank, another large-cap stock, has witnessed a 54.6% rise in 2023.
- Institutional Demand and Future Outlook:
- Institutional demand for tier-one banks has been observed, with portfolio managers actively rebalancing positions. Analysts anticipate continued positive trading but acknowledge the possibility of profit-taking activities.
- Global Economic Trends:
- CardinalStone Research analysts highlight the rally in banking names, driven by local and some foreign participation. They also note some institutional demand for tier-one banks.
Conclusion: Tony Elumelu’s affiliated companies have emerged as top performers on the NGX in 2023, showcasing impressive returns. The overall market has experienced significant growth, driven by increased investor interest and positive sentiments. As the year concludes, analysts remain watchful for potential profit-taking activities and encourage investors to focus on high-quality stocks with strong fundamentals.
