Nigerian stocks are getting off to a great start, having returned about 11.1 per cent in just weeks in continuation of the momentum that helped them yield about 46 per cent last year.
Negative real yields on Nigerian bonds and treasury bills have made it impossible for them to beat the country’s sticky inflation.
That is forcing pension funds and institutional investors to divest investment in fixed-income securities and plough the proceeds into stocks, which are currently experiencing a big boom, helping to drive the combined value of Nigerian shares to a peak never before seen.
In the week that just went by, the all-share index hit a historic 80,000 points as demand soared significantly and volume continued to regain pre-pandemic levels.
Expectations of strong full-year results and higher dividends will likely shape investors’ investment decision this week
PREMIUM TIMES has assembled a number of stocks with fundamentals and other potential, adopting key analytical approaches to save you the hassle of randomly picking equities for investment.
The selection, a product of analytical market watch, offers a guide to entering the market and taking strategic positions in hopes that equities will gain value with the passage of time, particularly in the short term.
This is not a buy, sell or hold recommendation but a stock investment guide. You may need to involve your financial advisor before taking investment decisions.
ECOBANK Transnational Incorporated (ETI)
ETI tops this week’s pick for trading significantly below its intrinsic value, making it cheap for investment.
The price-to-earnings (PE) ratio of the pan-African lender is presently 2x, while its price-to-book (PB) ratio is 0.56x.
FCMB Group
FCMB Group makes the list for trading well below its real value, brightening its chance of price appreciation. The PE ratio of the financial services group is 3.8x, while its PB ratio is 0.58x.
Sovereign Trust Insurance
Sovereign Trust makes this week’s pick for currently trading significantly below its real value. The underwriter’s PB ratio is 0.65x, while its PE ratio is 8.5x.
ALSO READ: Nigerian stocks end 2023 yielding N13 trillion
Learn Africa
Learn Africa makes the cut for trading below its real value. The publisher’s PE ratio is 5.8x, while the PB ratio is 0.67x.
Cornerstone Insurance
Cornerstone Insurance appears in the pick for currently trading below its intrinsic value.
The insurer’s PE ratio is 2.6x.
Access Holdings
Access Holdings makes this week’s selection for trading well below its real value. Its PE ratio is currently 3.7x, while the PB ratio is 0.6x.
Zenith Bank
Zenith Bank appears on the list for trading significantly below its intrinsic value. The lender’s PB ratio is 0.7x, while its PE ratio is 3x.
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