STOCKS TO WATCH: Seplat, Dangote Cement and banking investors should trade with caution

The list of stocks to watch this week includes Seplat, Dangote Cement and Bank stocks as the Nigerian stock market resumes for another week of trading.

The Ripples Nigeria Stock Watchlist is a selection of stocks being watched for viable trading or investing opportunities. An investor may randomly generate a list of stocks for investment purposes. But we have taken the trouble to do it according to certain parameters in order to save you this hassle.

Please note that the Ripples Nigeria Stock Watch List is not a buy, sell or hold recommendation. You are advised to consult your financial adviser before making any investment decision.

Seplat

Seplat has been in a negative light in recent weeks, which does not bode well for the oil and gas company on the stock market.

The company’s management is currently under scrutiny, leading to the suspension of its chief executive, Roger Brown, from his post for a week.

Brown has been barred from serving as CEO of Seplat amid a legal action against him by aggrieved stakeholders. His visa and work permit were also seized by the Nigerian government.

The leadership issue comes at a time when management is unable to secure FG’s approval to complete the acquisition deal with ExxonMobil.

The uncertainty surrounding the completion of the transaction and the stability of Seplat’s leadership could have an effect on the confidence of equity investors in the company’s growth prospects.

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Already, the value of the shareholders’ investment has fallen by -9.43% since the Ministry of Interior wrote to Seplat on March 3, 2023, that Brown was banned from working in Nigeria.

Thus, investors should trade with caution as the Nigerian stock market resumes for another trading session this week.

Dangote Cement

Dangote Cement shareholders are expected to take advantage of a company-initiated share buyback program to consolidate ownership and reduce the financial burden of dividends on the company.

The share buyback, which will last one year and end on December 12, 2023, is expected to increase the value of Dangote Cement shares in the stock market as it reduces outstanding shares.

This will increase the value of investments held by shareholders in Aliko Dangote’s cement company, but it will come at a cost to the company in the short term, while freeing up more capital in the long term.

In 2023, Dangote Cement shareholders will benefit from two sources; share buyback and dividends during the year, therefore, Dangote Cement is one of the stocks to watch this week and towards the end of the year.

Banks

In the first two weeks of March, around N87.4 billion in market valuation was lost by 10 Nigerian commercial banks in the stock market.

The banks concerned are First Bank, Zenith Bank and Access Bank, Guaranty Trust Bank, United Bank for Africa, Stanbic bank, Sterling Bank, First City Monument Bank and Jaiz bank.

Ripples Nigeria understands that the losses came amid banks struggling to manufacture the country’s banknotes; N200, N500 and N1,000 notes available for Nigerians to finance their daily activities.

As a result, livelihoods or commerce were affected, resulting in the destruction of bank properties. The losses show that investor confidence is waning, so traders need to be careful on the trading floor to avoid being dragged down.

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