43 Financial Services Stocks Are Penny Stocks As At 040520

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Thursday, May 07, 2020 09:20 AM / by Proshare Research/ Header Image Credit:  Ecographics


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Most major equities markets globally felt the sell-off witnessed in Q1 of 2020 as the effect of the COVID-19 pandemic hit economies and financial markets worldwide, Nigerian equities market inclusive.

 

This reflected in the NSEASI return recorded in Q1 2020 as the index dipped by -20.65% within the period under review. Succour returned to the market in April 2020 as the index inched up by +8.08% in April 2020 and has so far recorded +3.42% gain Mtd in May 2020.

 

This performance scenario is reflective in the list of stocks that constitute penny stocks on the Nigerian bourse. In our December 2019 year-end report titled: Financial Markets in Transition; Understanding Past Uncertainties, Preparing for New Possibilities,  113 stocks were classified as penny stocks as at 20th December, 2019 with financial services stocks dominating the list with forty-two (42) stocks.

 

For clarity sake, stocks trading below the share price of N5.00 fall within the category of stocks classified as 'Penny Stocks'. Furthermore, in our Capital Market Service Report for April 2020, 109 stocks were classified as penny stocks as at the end of April. 2020.

 

A current review of the list of penny stocks showed there are currently 106 stocks that qualified to be penny stocks based on the clarification provided in paragraph 4 above. This new list is three (3) stocks lesser compared to the list at the end of April 2020 and seven (7) stocks lesser compared to the list as at December 20, 2019.


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A breakdown of the list of penny stocks by sectors reflected that The Financial Services Sector boasts of several penny stocks with 43 stocks making the list, followed closely by the Services sector with 22 stocks and the Healthcare sector with 9 stocks. Consumer Goods and ICT (7), Conglomerates (4), Agriculture, Oil and Gas, Natural Resources and Industrial Goods (3 each) and Construction/Real Estate Sector (2) contributed to the penny stock basket to complete the list.

 

Table 1: List of Penny Stocks by Sector

Sector

No of Stocks

Financial Services

43

Services

22

Healthcare

9

Consumer Goods

7

ICT

7

Conglomerates

4

Agriculture

3

Industrial Goods

3

Natural Resources

3

Oil and Gas

3

Construction/Real Estate

2

Total

106

Source: NSE, Proshare Research

 

Further analysis on the YtD performance of the penny stocks showed that eleven (11) recorded positive returns while fifty-five (55) recorded negative returns as the remaining forty (40) remained static.

 

LAWUNION and UNIONDAC led the list of 11 gainers with +100% and +40.91% gains respectively while SKYAVN and NCR led otherwise with -65.39% and -55.56% losses in that order.

 

Table 2: List of 106 Penny Stocks

Proshare Nigeria Pvt. Ltd.

Source: NSE, Proshare Research


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