Courteville, Sovereign Trust, Unic, Niger, top underperforming stocks’ league

by | May 17, 2018 1:05 am



Investors in stocks such as Courteville Business Solutions Plc, Sovereign Trust Insurance Plc, Unic Insurance Plc, and Nigeria Insurance Plc were unlucky not to have benefitted from over N1trillion capital appreciation seen so far this year at the Nigerian stock market.

After an impressive 42percent rally recorded last year, many equity analysts have remained bullish that the Nigerian equity market space still offers pool of untapped potential for value hunters.

While the Nigerian stock market yields in excess of 6.3percent returns this year, equity investors in the aforementioned stocks and some other were caught in the web of value loss year-to-date (Ytd).

Though the Nigerian stock market rolled into positive territory at the end of trading week to May 11, equity analysts at Lagos-based Vetiva Capital still believe the underlying mixed sentiment in the market will continue to drive a sideways trading pattern on the Exchange.

As at Monday May 14, 2018, no fewer than forty-four (44) equities prices have underperformed the Nigerian Stock Exchange (NSE) All Share Index (ASI) at 40,677.61 points.

Already, stocks that recorded over 50 percent decline in value this year include Courteville Business Solutions Plc which was priced at 20kobo, representing decline of 60perent; Niger Insurance Plc at 24kobo has lost 52percent this year; Sovereign Trust Insurance Plc at 20kobo per share represents a decline of 60percent this year; likewise Unic Insurance Plc which at 20kobo per share represents 60percent loss.

INVESTOR checks on price lists at the Nigerian bourse show other stocks that have not impressed shareholders in the market to include: A.G. Leventis (Nigeria) Plc which as at Monday May 14 recorded year-to-date loss of 15.7percent to 59kobo.

Also, Newrest Asl Nigeria Plc has underperformed the NSE ASI after losing 17.6percent of its share price this year; Equity Assurance Plc (-44percent); Aluminium Extrusion Industries (-4.8percent); Cadbury Nigeria Plc (-16.4percent); Cornerstone Insurance Plc (-30percent); Dangote Flour Mills Plc (-5.3percent); Dangote Sugar Refinery Plc (-7.3percemt);  Deap Capital Plc (-4percent); Etranzact Plc (-9percent); and Fidelity Bank Plc (-2.4percent).

Research analysts at Capital Bancorp in their outlook are cautiously bullish in this first half (H1) of 2018 than in the second half (H2) of 2018.

They believe the current prices of stocks still give room for ample upside and significant return to investors. They advised that investment in the stock market be made mainly on fundamental analysis and not on the back of a band wagon effect which could easily fizzle out at any moment and keep the investor trapped in a wrong stock.

Further look at the stocks that have underperformed the NSE ASI include: Dunlop Plc (-36percent); Nigerian Enamelware Company Plc (-4.9percent); First Aluminium Nigeria plc (-18percent); Forte Oil Plc (-8.1percent); Hallmark Insurance Plc (-42percent); and International Breweries Plc (-5percent).

“Over the past 3 months, the performance of Nigerian equities has remained largely calm. The strong full year 2017 and first-quarter (Q1) 2018 corporate earnings, as well as improving macroeconomic indicators, have failed to spur another round of bullish momentum as seen in January 2018”,  said Kayode Tinuoye-led team of research analysts at United Capital in their May 15 note to investors.

“Though the downtrend has created an opportunity for bargain-hunters, sentiment remains grossly underwhelming, with the broader index depreciating 8.3percent as at May 14, 2018 relative to January 31, 2018”, the analysts added.

They further noted that recently released first-quarter 2018 capital importation data by the National Bureau of Statistics (NBS) clarifies why appetite for equities is waning.

Also this year, International Energy Insurance Plc share price has lost 12percent; Japaul Oil Plc (-26percent); LASACO Plc (-22percent); Mutual Benefit Insurance Plc (-42percent); Meyer Plc (-2.9percent); Mobil Oil Nigeria Plc (-3.4percent); Multi-Trex Plc (-20percent); Nigerian Breweries Plc (-9.6percent); Neimeth Plc (-4percent); Nestle Plc (-1.7percent); and Prestige Assurance Plc (-8percent).

Other stocks on the laggards table this year are: Regency Insurance Plc (-46percent); Royal Exchange Assurance Plc (-36percent); Staco Insurance Plc (-4percent); Total Nigeria Plc (-3.5percent); Tripple Gee Plc (-17percent); UACN Plc (-1.2percent); UACN Property Development Company Plc (-22.9percent); Union Bank of Nigeria Plc (-13.5percent); UBA Capital Plc (-6.5percent); Universal Press Plc (-3.1percent); Veritas Kapital Plc (-16percent); and Lafarge Africa Plc (-8.4percent).

Iheanyi Nwachukwu