Most successful investors in the stock market will tell you that you need a plan and a good mentor to be consistently profitable.
According to Cordros Capital Limited, “Despite the yield retracement in the fixed income (FI) market, we do not think investors should give up on the possibility of a market rally in the second half of the year as we still see scope for positive market performance.
“Our view is underpinned by prospects of improved macro-economic conditions which will enhance corporate earnings; the possible return of FPIs, who have been net sellers of Nigerian equities thus far; interim dividends that accompany the Q2 earnings season; and stock-specific events such as GTB’s implementation of a holding company structure and the likelihood of a second tranche of share buyback by Dangote Cement.”
While presenting its views on the different sectors that investors can make money in second half of the year(H2), it stated that , in the banking sector, key players’ have demonstrated a commendable level of resilience despite the peculiar circumstances of the relatively weak and riskier environment as well as increasingly tight liquidity positions.
“Accordingly, we remain ‘Overweight’ the sector and our picks are Access Bank, Guaranty Trust Bank Holding Company, United Bank for Africa and Zenith Bank,” they said.
In Nigeria’s cement sector, Cordros expects volume growth will remain healthy due to continued growth in the construction sector, led by increased public spending on capital projects. Dangote Cement and BUA Cement are good to buy.
For Consumer Staples, Cordros also expect the increased CPO price amid the reopening of the economy to support demand, and translate to revenue growth for agriculture stocks. Okomu Oil and Presco are recommended.
Brewery stocks are expected to record a strong recovery in volumes throughout 2021 full year to pre-pandemic levels. The Agro-Allied names remain the bright spot for Food & HPC stocks due to the essential nature of the products, reduced exposure to FX risks following substantial progress in backward integration programmes, and ability to implement more significant price increases than peers.
Accordingly, Cordros sees scope for significant earnings growth for Flour Mills of Nigeria and Dangote Sugar Refinery,
Overall, investing in the stock market and making money is a business for someone who has patience and is meticulous. Someone not greedy, because the stock exchange market is sometimes volatile and a lot of factors influence the behaviour of shares in the market.