Stocks Investors Can Buy, Sell, Hold This Week

By Dipo Olowookere

Last week, the equity market in Nigeria was bearish and the reason was not far-fetched, investors are yet to have full confidence in the market.

Last year, the exchange posted a yearly gain of 50.03 per cent and this was surprising because the year 2020 was challenging because of the global health crisis caused by COVID-19.

But despite the harsh environment, the local stock exchange outperformed other leading world exchanges to close bullish. It is important to note that the low yield environment in the fixed income market during the period made many investors have a second look into the equity space.

Since the fixed income ecosystem started to improve this year, the stock market has been struggling as attention has returned to the risk-free investment tool.

Last week, the market recorded a week-on-week decline of 0.69 per cent, but there were hopes that things may get better as the market breadth closed positive after 33 equities appreciated in price, higher than the 25 equities that depreciated in value in the week.

As investors get started for a new trading week, analysts are projecting a bullish week if there are positive macroeconomic or corporate announcements.

However, if there are none, “we expect the bearish run to continue this week, despite the existing bargain hunting opportunities.”

But in the midst of the headwinds, investors can still pick some stocks can could yield cool returns, according to research notes of two of the leading stockbrokers in the market, ARM Securities and Meristem.

Stocks to sell

Both organisations agreed that holders of FCMB shares should sell them because the banking stock is selling above its fair value of below N2. The equity price of the tier-2 lender ended at N2.86.

However, ARM put a sell rating on Nigerian Breweries, Okomu Oil and for Meristem, its sell rating is on Guinness Nigeria, Honeywell Flour Mills, NASCON, Vitafoam, BUA Cement, Berger Paints, Ardova and Total Nigeria.

Stocks to buy

In its weekly recommendation obtained by Business Post, Meristem said investors can consider buying Ecobank, Fidelity Bank, FBN Holdings, Stanbic IBTC, UBA, AIICO Insurance, Axa Mansard Insurance, Coronation Insurance, International Breweries, Fidson, GSK, Neimeth, Conoil and Seplat.

For ARM, it put buy rating on Fidelity Bank and a strong buy rating on Access Bank, FBN Holdings, UBA, Zenith Bank and Dangote Sugar.

Stocks to hold

The brokerage firm also said it has a neutral rating on Dangote Cement, Lafarge Africa, Guinness Nigeria, Seplat, Unilever Nigeria, Nestle Nigeria and Presco.

For Meristem, it said investors can hold Access Bank, Wema Bank, Nigerian Breweries, Flour Mills, Nestle Nigeria, UAC Nigeria, Okomu Oil, Presco, PZ Cussons, Dangote Cement, Lafarge Africa, Eterna and Airtel Africa.

The full stock recommendation of Meristem can be found HERE

You can see that of ARM Securities in the image below;