The month of November was a bearish month for the stock market. Despite various attempts to move to bull territory, the ASI declined by 4.90% with the index price arriving at N30,798.76. its Year to date, the index has declined by19.27%. 25 equities appreciated in price the previous week, lower than thirty (30) a week before that. 41 equities depreciated in price, higher than 24 of the previous week, while 103 equities remained unchanged, lower than 115 equities recorded in the preceding week. The market is still in a bearish state as the 50-day moving average is above the 10-day moving average and the index price.
The Stocks to watch comprises the top gainers and losers in the prior week, as well as companies in the news for various reasons. There are also those that released their results or made key announcements after the trading session on Friday and those with expected corporate actions.
This is not a buy or sell recommendation but more information about these stocks to help with insightful financial decisions this week. As usual added are the stock graphs in a six months’ average to give you more insights as I will be explaining some quantitative perspective on the market.
Diamond Bank Plc is a stock to watch as a result of being the worst performing stock last week, and indeed last month. it performed badly the previous week as it shredded 31.58%. The stock opened at N0.95 and closed at N0.65, down N0.30. Year to date, the stock declined by 56.67%. This has caused the stock to drop sharply to a 5-year low of N0.65.
The bank this week expressed confidence it would meet bond payments due next year and stated it had gotten approval from the Central Bank of Nigeria (CBN) to operate as a national bank. The move means the bank will require a lower minimum capital adequacy ratio, of 10% to operating. The bank’s move to apply for a National Banking license may ease some of the pressure to raise fresh capital, and probably cause an increase in price or overall market improvement.
The stock graph indicates the stock is still in Bear territory. The price of the stock has gone lower and the 50-day moving average is still above the stock price and 10-day moving average. This stock should be looked out for as it has new developments that may improve the stock.
Continental Reinsurance Plc is a stock to look out for this week by virtue of being the previous week’s best performing stock. The stock opened at N1.50 and closed at N2. The stock had a N0.50 or 33.33% price increase. Year to date, the stock is up 42.86%.
The surge in the company’s stock price is largely due to a notice issued this week pertaining to a proposed acquisition by its dominant shareholder. CRe African Investments Limited is offering N2.04 per share for the 10,372,744,314 ordinary shares of 50 kobos each, which it does not own.
The stock graph indicates the stock is in Bull territory. The stock price is way above the 50 and 10-day moving average as the 10 is above the 50-day moving average as well. The price was at its peak on the 29th of November and the volume improved tremendously on the 2nd of December 2018 when the stock price slightly decreased.
The stock could witness some volatile trading this week, as investors take positions to “lock in some short-term gains”. This may or may not improve the performance of the stock this week.
FCMB Group Plc should be a stock on your watchlist by virtue of the company having an investor conference call on Wednesday this week. The group released its Q3 (third quarter) 2018 results last week, and they showed a marked improvement year on year.
The conference call should provide more clarity as to how this was achieved, and the group’s plans for the coming year. However, looking at its stock graph, the stock is in Bear territory.
The good news, however, is the stock price is above the 10-day moving average and at the same point as the 50-day moving average. There has been a 15.8% increase in stock price from Thursday 29th November to 3rd December 2018 with the price increasing from N1.32 to N1.56 (N0.24 increase). This is a sign that the stock may have a performance improvement this week.
Resort Savings and Loans Plc should be on your watch list as a result of the company’s release of its long overdue results dating- 2016 and 2017. The company could release some results for 2018, which should give a clearer picture of its current financial state, and draw it closer to an injection of funds by a private equity firm, Milost Global.
The non-release of its results had made the company be suspended from trading by the NSE, and made it difficult for Milost getting a proper market valuation before investing.
The stock graph, however, shows Resort savings and loans plc has been suspended since June and so there has been no activity in the stock market since then in terms of volume traded in the market. The price of the stock has remained N0.50 since June till now. With the results released, there may be an improvement the stock this week.
Consolidated Hallmark Insurance Plc is a stock to be on the watch for by virtue of shareholders’ approval of a private placement, which would net the firm about N734 million.
This obviously gave the stock some edge as it has been in Bull territory since 2nd of November as the stock price and the 10-day moving average are above the 50-day moving average.
The 10-day moving average and the stock price has been moving together over a month as the stock price has remained N0.30 and the 50-day MA seems to be catching up to it so better watch out.
Since the stock is in its gains, the firm could witness some volatility in trading, as some investors may decide to sell off in other to lock in some gains.
As the year slogs to an end and as investors begin to ponder what went wrong with the stock market in 2018, it may be time to begin to strategies on what needs to be done in 2019 to improve investment returns. The Nigeria All Share index has lost 7.631 points since the beginning of the year to the end of November, a record 20% loss. The importance of high dividend stocks in a portfolio cannot be more now than ever before with the increased uncertainties in the market. One of the ways to keep your investment growing or at least insulated from the ups and downs of the market, apart from through diversification, is to have stable income-producing stocks in such a portfolio. We will keep giving you insights and quantitative perspective of the market and the stocks you should have your eye on.
The red line on the graph is the 10-day moving average
The purple line on the graph is the 50-day moving average.
The graph underneath represents the volume of the stocks at various points in the market.
All the images are gotten from the InfoWARE Market Data Terminal, follow this link to enjoy a one-month free trial ( http://www.infowarelimited.com/infoware-product-contact-page/ )