MARKET NEWS

By Helen Oji

The bulls seem to have reinforced their dominance as six companies listed on the Nigerian Exchange Limited (NGX) have recorded an average of 83.2 per cent year-to-date (YTD) gains, reflecting strong investors’ confidence.

The six stocks, Eterna Plc, Presco Plc, SCOA Plc, Vitafoam, Chellaram Plc and Honeywell Flour Mills, have outperformed expectations, delivering impressive returns driven by strong earnings, strategic expansions and positive market sentiments.

This rally aligns with the broader market momentum, which has added N4.4 trillion in capitalisation, from N62.92 trillion as of January 2, 2025, to N67.35 trillion.

The benchmark index has risen by five per cent YTD, from 103, 180.14 to 107,937.74 points. Data from the NGX showed that Eterna Plc with a market capitalization of N.55.3 billion began the year with a share price of N24.30 kobo but at the close of transactions yesterday, the share price closed at N42.40 kobo, adding 74.5 per cent YTD.

Similarly, Presco Plc which reopened for transactions in January 2025 at a share price of N476 closed, yesterday at N785 representing an increase of 65.3 per cent. The company closed its transactions on Monday with a capitalisation of N785 billion.

For SCOA Plc with capitalisation of N2.24 billion, its share price rose by 67 per cent YTD from N2.06 kobo to N3.44 kobo. Vitafoam share price appreciated from N23 to N38.05 kobo adding 65.4 per cent to the price valuation. The company’s capitalisation is currently at N47.6 billion.

Honeywell flourmills and Chellaram with capitalisation of N107 billion and N5.7 billion began the year with a share price of N6.30 kobo and N3.70 kobo. The two firms have added 114 per cent and 113 per cent respectively to their price valuation YTD to close at N13.50 kobo and N7.89 kobo on Monday.

Despite Nigeria’s tough business environment, occasioned by insecurity, infrastructure deficits, declining consumer purchasing power, and energy challenges, the six firms have thrived, following strategic initiatives and operational resilience.

Operators attributed the performance of the six firms to a combination of strategic initiatives, financial restructuring, robust profit growth, product innovation and strategic market expansions embarked upon by the firms to boost profitability and remain competitive in their various sectors.

For instance, while Eterna Plc has focused on strategic partnerships and product line expansions within the energy sector, boosting both market share and profitability SCOA Plc has leveraged its diverse operations and strategic initiatives to sustain growth.

Vitafoam has also remained competitive through continuous product innovation and market expansion. Chellaram Plc on the other hand has undergone financial restructuring, reducing pre-tax losses and improving investor confidence.

Honeywell Flour Mills, now 71.69 per cent owned by Flour Mills of Nigeria Plc, underwent a brand relaunch in December 2024, featuring new packaging and improved product quality.

This move drove a 32 per cent stock surge in early January, making it one of the top-performing consumer goods stocks on the NGX. In its financial performance, Presco Oil Palm producing company reported revenue of N198.16 billion for the 12 months ended December 31, 2024, up by 93.48 per cent from N102.42 billion reported the previous year. Profit after tax of N104.279 billion was achieved for the 12 months, up by 217.33 per cent from N32.861 billion reported the previous year.

As the Nigerian stock market remains bullish, investors continue to monitor these outperformers, looking for sustained growth, enhanced dividend payout and potential opportunities in the months ahead.

According to Moses Igbrude, President of the Independent Shareholders Association of Nigeria, the soaring share prices reflect strong financial and operational performance. He urged the companies to sustain the momentum by consolidating on the initiatives that have driven growth.

However, David Adonri, Vice President of Highcap Securities Limited, highlighted the role of price-sensitive information in fueling the stock price surges. Adonri added that the sustainability of the rally will depend on the availability of new, positive market-moving developments that could further drive demand.

President of the Ibadan Zone Shareholders Association of Nigeria, Eric Akinduro, said companies’ ability to deliver strong value for investors despite economic challenges has continued to attract market attention.

Akinduro noted that investors have been accumulating these stocks since the beginning of the year, particularly after the release of quarterly results, which signalled strong fundamentals and long-term growth potential.He pointed out that many of these stocks remain undervalued relative to their fundamentals and prospects, making them attractive for investors with a long-term strategy.

“These stocks are not just short-term gainers; they have the potential to deliver even better returns over time,” he added. As the Nigerian stock market continues its bullish trend, analysts suggest that strong fundamentals and sustained investor confidence will be key to maintaining the momentum.

While investor sentiment remains bullish, analysts caution that continued transparency, innovation, and financial resilience will be crucial in maintaining upward momentum in these stocks.