Futureview Analysts Place Banking Stocks on Sell Radar
Despite the fact banking stocks have become popular among alpha seekers in the stock market, equities research analysts at Futureview Financial Services Limited have taken a rather bearish position with sell, or at best hold ratings for some of the Nigerian lenders.
Yesterday, the Nigerian Exchange (NGX) opened the week on a positive note as buying interest pushed market capitalisation above N35 trillion while year-to-date return spiked to 26%. Equities investors continue to take position across tickers ahead of the second quarter of financial year 2023 earnings releases.
Banking shares have become a major target for value hunters in recent times, driven by an expectation that there will be an improvement in regulation after Godwin Emefiele, Central Bank of Nigeria (CBN) governor was suspended.
Supported by gains recorded in FBNH, and others, the Banking index increased by 1.73%. However, in its weekly recommendation, the investment firm keeps banking stocks across all ranks in the sell order bucket, at best the financial services operators get hold ratings.
After popping above N1 trillion market valuation, Futureview stated that GTCO has just 1% upside potential while analysts guided investors to maintain a neutral position on the stock.
Fidelity Bank has an expected return below 5%, and the ticker was also rated hold just like Access Corp and United Bank for Africa. In a similar bucket, AIICO share was rated hold, a similar rating shared by NEM Insurance.
With an expected 25% upside potential, Futureview pushed AXA Mansard among stocks that offer an upside position. Equities analysts at the firm downgraded FCMB to sell having estimated that the share may be overpriced already with a 21% negative return. Zenith Bank was also lowered to sell as analysts’ estimate showed a negative return of 1%.
In an email correspondence with MarketForces Africa, Yinka Adetuberu of Futureview Financial Services said the bearish view of the banking stocks is due to the fact that many of these stocks have overshot the firm’s 12-month price target.
“We also revised them twice to incorporate recent economic events and market trends. Since we utilize fundamental analysis for our recommendations, our revised price targets would come only after we receive the half-year financial reports from these banks”.
Adetuberu said that any stock overshot its price target would be on the “sell” radar. #Futureview Analysts Place Banking Stocks on Sell Radar Nigerian Treasury Bills Yield Rises to 7%
