Weekly Market Review & Stock Recommendations – June 28, 2021

Weekly Market Review & Stock Recommendations – June 28, 2021

Dear Client/Reader,

Global Economic Roundup

Oil rises for 5th week to highest since 2018 on strong demand

Oil prices climbed to their highest ($76.10) since October 2018 on Friday, putting both benchmarks up for a fifth week in a row on expectations demand growth will outstrip supply and OPEC+ will be cautious in returning more crude to the market from August. Brent futures rose 62 cents, or 0.8%, to settle at $76.18 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 75 cents, or 1.0%, to $74.05. Those were the highest closes for both benchmarks since October 2018 and put both contracts up over 3% for the week.

Global stocks finish at record highs, oil climbs for 5th week

Wall Street notched broad gains on Friday, with the S&P 500 index closing at a record and global shares also finished at an all-time high, while oil prices rose for a fifth straight week. Weaker-than-expected inflation data and news that U.S. President Joe Biden has secured a bipartisan infrastructure agreement with lawmakers gave a boost to stocks. The plan is valued at $1.2 trillion over eight years, of which $579 billion is new spending. The S&P 500 rose 2.7% for the week, its strongest weekly gain since early February as Nike and bank stocks rose, and weaker-than-expected inflation data eased worries about a sudden tapering in stimulus by the Federal Reserve.

The Dow Jones Industrial Average (.DJI) rose 0.71% to end at 34,438.58 points, while the S&P 500 (.SPX) gained 0.34%. The Nasdaq Composite (.IXIC) dropped 0.06% after holding near the previous session’s record high.

Chaka gets SEC’s 1st Fintech license

The Securities and Exchange Commission (SEC) has granted the digital sub-broker licence to Chaka Technologies Limited. This makes Chaka the first recipient of this newly created licence by the SEC, as part of the Commission’s efforts to foster regulation within the investment-tech space, to ensure the safety of the investing public while encouraging innovation within the sector. Nigeria remains an attractive hive for fintech innovation, this new license from the SEC is the much-needed guide to help safeguard the investing public amid the ever-evolving landscape.

Some of our recommended stocks are mentioned below;

GTCO PLC:

GTCO Plc Q1’2021 showed that interest income declined by 26.85% from N75.36 bn in Q1’2020 to N55.13bn in the current period. Net interest income went down by 18.43% from N64.28bn in Q1’2020 to N52.44 bn in Q1’2021. Similarly, Profit before tax declined by 7.77% from N58.21bn in Q1’2020 to N53.68bn in the current period. Profit after tax went down by 9.03% from N50.07 bn in Q1’2020 to N45.55bn in the current period. Consequently, GTB recorded a 9.06% fall in earnings per share from N1.77 in Q1’2020 to N1.60 in Q1’2021. GTB has a BVPS of N24.50, a P/BV of 1.18x and a P/E ratio of 4.53x.

ACCESS PLC:

Access Bank Plc. results for Q1’2021 showed that Interest income advanced by 10.74% from N113.75 bn in Q1’2020 to N125.97 bn in the current period. Similarly, Net interest income advanced by 30.12% from N72.21bn in Q1’2020 to N93.96 bn in the current period. Profit before tax grew by 29.73% from N46.29bn in Q1’ 2020 to N60.05bn in the current period. Profit after tax advanced by 28.39% from N40.93 bn in Q1’2020 to N52.55 bn in the current period. Earnings per share EPS went up by 23.14% to N1.49 in the current period from N1.21 in Q1’2020. Access has a BVPS of N22.31, a P/BV of 0.38x and a P/E of 5.67x.

Please find here our Weekly Market Review & Stock Recommendations for this week.

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