Top Stocks that Make Investment Sense in Bullish Market
Investment bankers have started showing a preference for stocks with stronger than peers yields, a number of equities reports indicated that large-cap stocks are mostly on top of the list.
It is the time of the year that the equities returns record shows an uptrend as the equities segment of the Nigerian Stock Exchange turned the corner recently.
Thanks to the latest policy rate cut by the Monetary Policy Committee of the Central Bank of Nigeria.
As inflation continues maintaining an upward trajectory, yields in the fixed income market have plunged to near time low.
This has widened negative return which is the current characteristic of government securities, largely supported by a low-interest rate environment.
With third-quarter earnings season lurking around, more stocks price would go vertical and it won’t have anything to do with fundamentals.
This dovish stance would pull money away from the stock market, and guess where investors would channel the fund: the stock market.
It is happening already as in long term market capitalisation kissed N14 trillion market as the All Share Index travelling to 30,000 points.
It will happen so soon, and like me, you would have wished you make some investment no matter how small.
The market has moved away from the loss zone, year to date return is now positive, thanks to movement in some high market capitalisation stocks.
Here is what equity research analysts are saying about some stocks that will further go vertical in this month and perhaps down the year.
First, top picks include banking stocks except that few investment bankers seem to be a little bit bearish on FirstBank Plc.
But, after the lender’s balance sheet repairs, the financial position and profitability of the group have increased.
Going forward, some equity analysts say the FBNH estimate would be upgraded.
Another lender’s in the Tier-I capital category is actually money-spinning for investment purposes, their year to date losses have been moderated.
Zenith, UBA, GTBank and Access Bank are in the money and most equity research analysts advised investors to buy them for estimated upside potential.
Their price targets upgrade raised the possibility of earning more from banking stocks in the fourth quarter as sentiments improve in the market.
Chapel Hill Denham is perhaps looking for a possible re-rating of these stocks, while Cardinalstone also maintained a similar point.
For now, despite the bullish trend, Nigeria’s banking sector, FMCG and other segments seem to be undervalued, according to equity research reports.
Lafarge WAPCO stock is pitched higher compare with BUA Cement, but Dangote Cement remains the dividend-king in the category.
In the beverages segment, investors are showing a preference for Nigerian Breweries stocks, this was supported by Heineken B.V presence in the market recently.
It would be recalled that Heineken acquired more than 11,000,000 shares in the open market from shareholders worth some N432 billion according to MarketForces Research.
This move boosted sentiment and stock price move up strongly, though NB Plc earnings performance was largely disappointing.
Also, pricey Nestlé Nigeria is expected to pick up.
But not so much is expected from other consumers’ goods like Cadbury Plc, Unilever and PZ Cussons majorly for their lacklustre earnings performance.
Dangote Sugar has been picked as one of the stocks to watch. The stock was recommended by equity research analysts at Chapel Hill Denham.
The fact is, this is the time to make money trading shares following the uptrend in the market. It is more likely to see prices rising, perhaps down the year.
Some stocks would automatically enjoy re-rating, and finding an entry point would make significant impact on investors’ portfolio returns.
Perhaps, it is time for you to get on board.
You might be considering where to invest ₦10,000 or ₦10 million, we have your back. Just send an email to Ogochi.ndubuisi@dmarketforces.com
Read Also: Bullish Party Over as Stock Market Drops Further
Top Stocks that Make Investment Sense in Bullish Market
