Wednesday, March 30, 2016 6.38 PM / TheAnalyst
The market has technically slipped into a weak bargain mode as lot of stocks with dividend rewards are closer to marked-down date, which remains one of the core reasons for the on-going sell-down on the bourse - this may stoke a bearish trend for a while.
With a gale of price adjustments to come, starting with GT Bank and ZENITH Bank already marked-down for the Q4'15 dividend rewards accordingly; the market anticipates more are in the pipeline; a notion that has resulted in a tepid and lacklustre trading pattern as witnessed with volatility gaining tempo recently.
In this regard, we solicit a cautious approach towards equities trading at this time in light of so many moving part is macro and micro economic indices.
That said, we remain cautiously optimistic towards a few stocks in the banking, consumer goods and agriculture sub-sectors.
The sustained healthy fundamentals and resilient growth potentials against micro-economic headwinds within specific industry remain our key ground(s) for selecting these under-listed stocks.
Taking a cue from the Q3'15 earnings report(s), we expect these stocks/firms to sustain growth with an improved outlook while we anticipate that they are able to maintain the good dividend history and consistency pattern shown to date; though a low dividend payout is not out of our estimate, except for GT Bank, which has already been marked down for a dividend of N1.52kobo.
The GT Bank stock still has strong growth and uptrend potentials as indicated in its Q4'15 earnings report, and may be a consideration in the list above subject to a review of fundamentals related to banking stocks.