FeaturedMarket Update

Our View & Trading Strategy: Nigerian Stock Market, Week Ended 26th August, 2022

 

NGXASI Performance

  • In the just concluded week, the lead index of the Nigerian Exchange, NGXASI closed in the positive, adding 0.63%, thus, it rounded up the week at point 49.682.14 from 49,370.62 point. Similarly, the market capitalization measuring the value of all listed equities, closed at N26,797 trillion having increased in value by same 0.63%.
  • Although, the market closed in the positive, it can safely be established that, movement on the lead index is chiefly dominated by few high Cap listed equities, leading amongst the high cap is Airtel Africa.

Technical View

 

  • Technically, the positive move observed on the lead index do not seems to have impacted other major blue-chips, to ascertain this, we observed few technical indicators along the movements on the lead index charts WoW, thus, the followings are our findings;
    • There is a sharp diversion between NGXASI and Money Flow Index (MFI) trend, though the lead index turned up, MFI maintained the sharp downward turn that commenced since mid-July. The implication of this is that, Funds is still flowing out of the market in the form of price reduction on listed equities. In another interpretation, it could mean that, investors/sentiments remained bearish despite the seemingly reversed position of the lead index
    • At the start of July, MACD crossed its signal line from the top to the bottom. This is a bearish signal. Please understand that, even after the gains during the week, no change or sign of near trend change is noticed.
    • We equally put to test, Relative Strength Index (RSI) cross over (RSI15 Vs RSI7) the essence is to capture possible weekly signals. At the end of the week activities, RSI7 remained below RSI15. Please understand that it crossed below since Mid-June. This is also a bearish signal

Recommended Trading Strategy

    • Buy the deep by positioning in your equities of choice in tranches, that is, as price drops, you take a portion of the new price. For example, if you intend to take up a million units of a given equities, at various intervals, do 30-50 thousand as price dips
    • For listed equities with glaring evidence of deeper price drops, take your loss, and repositioned in the deeps. That will mean, selling high to buy lower, thus taking more volume at lower price, for a quicker profit point at market reverse
    • Make sure you understand the trend of your equities of choice, rather than following the market by the lead index trend.
    • Don’t be a one sided investor, digest every fundamentals of your equities of choice.
  • For a one-on-one training on technical analysis and technical tools, talk to us at tradelines Dot Biz Investment Ltd- tradelines.com.ng or Call Segun on 08037155684, Debo on 07037844125.

 

Stanbic IBTC Interim Dividend-Our View

    • As against N1.00 Interim Dividend announced in 2021 half year, the management announced N1.50 interim cash dividend for the period ended 30th June, 2022
    • The said dividend is same as 63.37% of the total earnings for the period. This is higher than last year’s 46.60% payout ratio
    • Although the payout is on the high side, we are of the view that, the bank will only need to perform better for the rest of the year, so as to maintain continued improvements in its full year dividend announcements.
    • This is because, the said interim dividend may affect its share outstanding more that its earnings, since investors are allowed to convert dividend into holdings with the bank.
    • Please understand that, the shares outstanding of Stanbic changes twice in a year, due to the policy that permits investors to convert dividend to shares. Thus, more holdings will compete for the full year’s earnings.
PREPARED BY TRADELINES
STANBIC IBTC HOLDINGS
Investment/Valuation Ratios
Tickers 2022 2021 %Chg
EPS 2.37 2.15 10.3
TCIP/SHARE 2.22 0.81 175.91
P/E-Ratio 2.96 4.57 35.24
Earnings Yield 8.45% 5.47% 54.42
BV/Share 29.17 32.98 11.54
PBV 0.96 1.19 19.25
LDR 63.19% 56.84% 11.19

PREPARED BY TRADELINES

DIVIDEND INFORMATION

Tickers 2022 2021 %Chg
Latest Final Dividend 1.50 1.00 50
Final Dividend Pay-Out Ratio 63.37% 46.60% 35.99
Final Dividend Yield 5.36% 2.55% 110

Zenith Bank Interim Dividend-Our View 

  • The bank only managed to build its earnings by marginal 4.99% and so, it is not a surprise that the dividend announced (30k) is same as what was declared in the previous half year.
  • Backing up this point is the fact that, the Payout ratio this year is 8.45% almost same as the 8.88% payout in the corresponding half year.
  • We therefore justify the dividend as commendable by the management of Zenith Bank, especially when the sudden change in its operating economy is put into consideration.
ZENITH INT’L PLC
Investment/Valuation Ratios
Tickers 2022 2021 %Chg
EPS 3.55 3.38 4.99
TCIP/SHARE 2.57 3.53 27.28
P/E-Ratio 1.55 1.8 14.12
Earnings Yield 16.13% 13.85% 16.44
BV/Share 40.52 36.42 11.27
PBV 0.54 0.67 18.97
LDR 57.75% 60.55% 4.62

PREPARED BY TRADELINES

DIVIDEND INFORMATION

Tickers 2022 2021 %Chg
Latest Final Dividend 0.30 0.30 0.00
Final Dividend Pay-Out Ratio 8.45% 8.88% -4.75
Final Dividend Yield 1.36% 1.23% 10.91

 

  • In conclusion, we recommend that, rather than running off the market, investors should take timely advantage of dropping prices, it is should be noted that, the market currently have low tolerance for short term investments options, nevertheless, it guarantees high profit margin for long term investment options. Therefore, trade accordingly. Safe Trade.

Comment here

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FeaturedMarket Update

Our View & Trading Strategy: Nigerian Stock Market, Week Ended 26th August, 2022

 

NGXASI Performance

  • In the just concluded week, the lead index of the Nigerian Exchange, NGXASI closed in the positive, adding 0.63%, thus, it rounded up the week at point 49.682.14 from 49,370.62 point. Similarly, the market capitalization measuring the value of all listed equities, closed at N26,797 trillion having increased in value by same 0.63%.
  • Although, the market closed in the positive, it can safely be established that, movement on the lead index is chiefly dominated by few high Cap listed equities, leading amongst the high cap is Airtel Africa.

Technical View

 

  • Technically, the positive move observed on the lead index do not seems to have impacted other major blue-chips, to ascertain this, we observed few technical indicators along the movements on the lead index charts WoW, thus, the followings are our findings;
    • There is a sharp diversion between NGXASI and Money Flow Index (MFI) trend, though the lead index turned up, MFI maintained the sharp downward turn that commenced since mid-July. The implication of this is that, Funds is still flowing out of the market in the form of price reduction on listed equities. In another interpretation, it could mean that, investors/sentiments remained bearish despite the seemingly reversed position of the lead index
    • At the start of July, MACD crossed its signal line from the top to the bottom. This is a bearish signal. Please understand that, even after the gains during the week, no change or sign of near trend change is noticed.
    • We equally put to test, Relative Strength Index (RSI) cross over (RSI15 Vs RSI7) the essence is to capture possible weekly signals. At the end of the week activities, RSI7 remained below RSI15. Please understand that it crossed below since Mid-June. This is also a bearish signal

Recommended Trading Strategy

    • Buy the deep by positioning in your equities of choice in tranches, that is, as price drops, you take a portion of the new price. For example, if you intend to take up a million units of a given equities, at various intervals, do 30-50 thousand as price dips
    • For listed equities with glaring evidence of deeper price drops, take your loss, and repositioned in the deeps. That will mean, selling high to buy lower, thus taking more volume at lower price, for a quicker profit point at market reverse
    • Make sure you understand the trend of your equities of choice, rather than following the market by the lead index trend.
    • Don’t be a one sided investor, digest every fundamentals of your equities of choice.
  • For a one-on-one training on technical analysis and technical tools, talk to us at tradelines Dot Biz Investment Ltd- tradelines.com.ng or Call Segun on 08037155684, Debo on 07037844125.

 

Stanbic IBTC Interim Dividend-Our View

    • As against N1.00 Interim Dividend announced in 2021 half year, the management announced N1.50 interim cash dividend for the period ended 30th June, 2022
    • The said dividend is same as 63.37% of the total earnings for the period. This is higher than last year’s 46.60% payout ratio
    • Although the payout is on the high side, we are of the view that, the bank will only need to perform better for the rest of the year, so as to maintain continued improvements in its full year dividend announcements.
    • This is because, the said interim dividend may affect its share outstanding more that its earnings, since investors are allowed to convert dividend into holdings with the bank.
    • Please understand that, the shares outstanding of Stanbic changes twice in a year, due to the policy that permits investors to convert dividend to shares. Thus, more holdings will compete for the full year’s earnings.
PREPARED BY TRADELINES
STANBIC IBTC HOLDINGS
Investment/Valuation Ratios
Tickers 2022 2021 %Chg
EPS 2.37 2.15 10.3
TCIP/SHARE 2.22 0.81 175.91
P/E-Ratio 2.96 4.57 35.24
Earnings Yield 8.45% 5.47% 54.42
BV/Share 29.17 32.98 11.54
PBV 0.96 1.19 19.25
LDR 63.19% 56.84% 11.19

PREPARED BY TRADELINES

DIVIDEND INFORMATION

Tickers 2022 2021 %Chg
Latest Final Dividend 1.50 1.00 50
Final Dividend Pay-Out Ratio 63.37% 46.60% 35.99
Final Dividend Yield 5.36% 2.55% 110

Zenith Bank Interim Dividend-Our View 

  • The bank only managed to build its earnings by marginal 4.99% and so, it is not a surprise that the dividend announced (30k) is same as what was declared in the previous half year.
  • Backing up this point is the fact that, the Payout ratio this year is 8.45% almost same as the 8.88% payout in the corresponding half year.
  • We therefore justify the dividend as commendable by the management of Zenith Bank, especially when the sudden change in its operating economy is put into consideration.
ZENITH INT’L PLC
Investment/Valuation Ratios
Tickers 2022 2021 %Chg
EPS 3.55 3.38 4.99
TCIP/SHARE 2.57 3.53 27.28
P/E-Ratio 1.55 1.8 14.12
Earnings Yield 16.13% 13.85% 16.44
BV/Share 40.52 36.42 11.27
PBV 0.54 0.67 18.97
LDR 57.75% 60.55% 4.62

PREPARED BY TRADELINES

DIVIDEND INFORMATION

Tickers 2022 2021 %Chg
Latest Final Dividend 0.30 0.30 0.00
Final Dividend Pay-Out Ratio 8.45% 8.88% -4.75
Final Dividend Yield 1.36% 1.23% 10.91

 

  • In conclusion, we recommend that, rather than running off the market, investors should take timely advantage of dropping prices, it is should be noted that, the market currently have low tolerance for short term investments options, nevertheless, it guarantees high profit margin for long term investment options. Therefore, trade accordingly. Safe Trade.

Comment here

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