Weekly Market Review & Stock Recommendations -January 3, 2023
Dear Client/Reader,
Global Economic Roundup
Global Oil Demand Could Surge In 2023
Global oil demand could soar as much as 4% in the coming year if the world manages to fully emerge from Covid restrictions, hedge fund trader Pierre Andurand has told Bloomberg. Andurand says in a tweet that oil demand may increase by 3 million to 4 million barrels a day in 2023 helped by a switch to oil from gas. Crude prices rose a few weeks ago after China unveiled the most sweeping changes to its strict Covid-19 guidelines, including relaxing testing requirements and travel restrictions. Further, people infected with Covid-19 but have only mild or no symptoms are now allowed to isolate at home instead of convalescing in centrally managed facilities.
US inflation rate slows as fuel costs fall
US inflation was 7.1% over the 12 months to the end of November, dropping from 7.7% in October, figures from the US Labour department show. That was the slowest pace in nearly a year and better than analysts expected. But though the overall picture is improving, the cost of some items such as housing continues to climb. The US central bank has raised interest rates at the fastest pace in decades the past year, in an effort to get the inflation problem under control. Earlier in December, Federal Reserve chairman Jerome Powell said that the bank would start to move less aggressively to see how the moves are playing out in the economy. By boosting borrowing costs, the Federal Reserve is expecting to dampen demand for expensive items such as homes and cars, helping to slow the economy and ease the pressures pushing up prices.
Senate urges CBN to extend withdrawal date to June 30th
The Senate has urged the Central Bank of Nigeria (CBN) to urgently extend the withdrawal date of old currency notes from Jan. 31, 2023 to June 30. The upper chamber’s resolution was sequel to a point of order raised by Sen. Mohammed Ndume (APC-Borno) during Wednesday’s plenary. Raising Orders 41 and 51 of Senate Standing Rule, Ndume said that the call for extension of the date should be considered as a matter of urgent national importance in order to forestall imminent hardship on Nigerians. The lawmaker also said that access to the new notes would be compounded by recent circular by the CBN which limited the amount of cash withdrawal by corporate entities to withdraw within certain period of time. Contributing, Sen. Adamu Aliero (PDP-Kebbi) said that it was true that in rural areas, people were not even aware that there was going to be currency change. “So this motion is very apt and timely. If we insist on the date given by CBN, it will cause a lot of hardship for our rural dwellers.”
Some of our recommended stocks are mentioned below;
FIDSON PLC:
Fidson Q3 2022 results showed an increase in revenue by 44.48% from N21.75bn in Q3 2021 to N31.43bn in Q3 2022. Operating profit advanced from N4.29 bn in Q3 2021 to N6.35bn in Q3 2022, reflecting an increase of 48.03%. Profit before tax went up by 49.06% from N3.42bn Q3 2021 to N5.10bn in the current period. Profit after tax grew by 47.97% from N2.32bn in Q3 2021 to N3.44bn in Q3 2022. EPS grew by 35.14% to N1.50 in Q3 2022 from N1.11 in Q3 2021. Fidson has a BVPS of N5.92, P/BV of 1.52x and P/E ratio of 4.50x.
TRANSCORP PLC:
Transnational Corporation Plc Q3 2022 results showed that revenue grew by 12.45% from ₦85.59bn in Q3 2021 to ₦96.24bn in Q3 2022. Gross profit went up by 18.63% to ₦46.70bn in Q3 2022 from ₦39.36bn in Q3 2021. Operating profit advanced by 14.53% from ₦27.52bn in Q3 2021 to ₦31.52bn in Q3 2022. Profit before tax rose by 47.71% to ₦20.87bn in Q3 2022 from ₦14.12bn in Q3 2021, on the back of a 29.29% increase in Other Income and 14.91% decline in net finance cost. In the same vein, profit after tax grew by 41.38% from ₦13.47bn in Q3 2021 to ₦19.04 bn in Q3 2022. Consequently, earnings per share rose to ₦0.22 in the current period from ₦0.18 in Q3 2021. Transcorp Plc has a BVPS of ₦3.87, P/BV of 0.28x and P/E ratio of 3.65x.
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