By ADEBAYO OBAJEMU
In spite of the downturn in the economy occasioned by COVID-19 and near recession economic situations in the country; some stocks have always stood out defying the odds to make good for themselves.
These blue-chip stocks, also tagged NSE 30 stocks are renowned basically for being the most capitalized Stocks on the Nigerian stock market.
These stocks are the staple of many investors- traditional and institutional, are not important not for any other reason but for their systematic significance and the gravitas they hold in Africa’s biggest economy, low volatility exposure and for more consistent return on investment when compared to low or medium capitalized stocks.
For record, these stocks are said to account for more than 70% of the total equities valuation of the 2020 best-performing stock market in the world.
Also, it is no longer news that investors pump up their buying pressure on them mainly because they produce dependable earnings and are often known to pay steady dividends to investors.
Of significance is the fact that the dividend yield on the NSE30 Index at the end of May 2021 stood at around 6.30%.
According to Ambrose Omokordion Chief Executive Officer at Investa, “the movement of the prices of these stocks most times influences the market performance upsides or downsides, depending on investors’ sentiments.”
The elite list of stocks has collectively posted yearly gains of about 46%, as investors rely on them more often for surviving economic downturns and operating profitably. This is unsurprisingly why many of them have a record of stable and reliable growth.
Business Hallmark presents the top five best-performing NSE 30 stocks so far in the year.
Lafarge Africa PLC (WAPCO)
The cement giant has defied COVID, market expectations inspite of some headwinds in Nigeria’s real estate sector, by recording strong growth in recurring earnings before interest and taxes in the year 2020 which shot up by 30.8% as against the previous year’s result.
Not too long ago, shareholders of the cement giant commended the company for its dividend payout of 100 kobo amid an era of harsh and challenging economic macros.
The Khaled El Dokani-led company records yearly gains of 87% as the firm once again emphasized its determination and avowed commitment to deliver superior stakeholder value through innovation, and continuous improvement.
First City Monument Bank
The bank has done significantly well as records a yearly return of 80% to its shareholders with recent price trajectory exhibiting no sign of stalling its bullish run amid a recent report that revealed the company unanimously approved the payment of a dividend of N2.97 billion, translating to 15 kobo per ordinary share for 2020.
The fast-growing tier 2 Nigerian bank in its most recent earnings call disclosed that it remains resolute in the face of challenges posed by the resurging COVID-19 pandemic. The most recent financial results have also affirmed customers’ confidence in the Ladi Balogun-led financial powerhouse.
Just recently also, Oikocredit, a Dutch-based cooperative, recently invested about $10 million in debt in the bank, further affirming the bank’s systemic role in providing credit to the unbanked, small and medium scale businesses in Africa’s largest economy.
Without doubt, the cement giant is doing well. The company has achieved sterling growth lately by posting an improvement in its revenue and profit in Q1, 2021 despite stiff economic headwinds. The cement company posts a yearly gain of about 69%.
Institutional investors are keying into the highly capitalized stock as market commentators anticipate the company’s total cement production capacity to reach 20 million metric tons per annum upon completion of its Sokoto cement plant and an additional 3 lines of 9 million metric tons total capacity in Edo, Adamawa and Sokoto states, in three years’ time.
Guinness Nigeria Plc
The top brewery stock in the past month has recorded immense buying pressures as it bounces back into profit territory from two-quarters of losses in its present financial year ending June 2021.
The company posts a yearly return of 66%, with recent price action showing room for more upsides. Guinness Nigeria sales revenue is looking up for the first time in 3 years.
Additionally, the stock is all fired up with GCR Ratings upgrading the long-term and short-term Issuer ratings on the NSE30 Stock to AA-(NG) and A1+(NG) respectively, with the outlook accorded as stable, underpinned by its robust cash flows.
Dangote Cement Plc
Nigeria’s most valuable stock by market value affirmed its huge footprint on Nigeria’s manufacturing sector by recently approving N272.6 billion as dividend, translating to N16 per share for the year 2020, to its shareholders.
A significant number of investors have held firm to the stock for attaining a trillion-naira revenue growth, amid economic challenges facing the $514 billion giant. Its chairman, Aliko Dangote, Africa’s richest man reinforced the company’s commitment to maximizing shareholder value.
The cement giant posts a yearly return of 65.5
In a related development, the Nigerian stock market saw limited trading sessions this week on account of a public holiday on Monday.
Gains were reported last Wednesday through Friday but they are a mere trifle when set beside the steep loss of Tuesday, which set the week up for a fall of N266 billion.
All but the insurance and the oil & gas indexes have posted positive returns this year of the five sector indexes tracked by the Nigerian Exchange. While the insurance index is up 6.03 per cent, the oil and gas index has gained 38.91 per cent so far this year.
All the key market performance indicators declined this week. Market breadth was positive as 38 gainers were reported against 25 laggards.
The all-share index and market capitalisation simultaneously dropped by 1.30 per cent, the former closing at 38,648.91 points and the latter at N20.143 trillion.
Trade volume of 981.147 million shares estimated at N10.384 billion was recorded in 15,001 deals, relative to the 1.058 billion shares worth N12.831 billion that were traded in 17,854 deals the week before.
The financial services industry led the activity chart, with 695.803 million shares valued at N5.178 billion and traded in 8,616 deals. It added 70.92 per cent and 49.86 per cent to the total equity volume and value respectively.
The consumer goods sector came next, trading 75.879 million shares estimated at N1.227 billion in 2,263 deals. The conglomerates sector was third, trading 67.430 million shares priced at N367.306 million in 612 deals.
Regarding index movement, all indices rose except the NSE ASI, NSE Main Board, NSE MERI and NSE Industrial Goods, which dipped 1.30 per cent, 3.26 per cent, 1.33 per cent and 0.05 per cent respectively. The NSE Growth and NSE ASeM indices closed flat.