Analysts recommend that investors seek out dividend-issuing stocks with robust fundamentals.
Lafarge Africa Plc and MTN Nigeria Plc experienced a rise of N78.783 billion or 1.81% during the trading session today, as optimistic sentiment lingered in the equity market for a second consecutive day, despite economic instability.
This development occurred even though the CBN’s Monetary Committee raised the borrowing rate by 100 basis points to 16.5% on Tuesday.
A swift investigation showed that the shares of Lafarge Africa Plc advanced from N20.00 per share the prior day to N22.00 per share at the trading’s conclusion, indicating a growth of 5.26% or N17.719 billion in market capitalization.
The market valuation of MTN Nigeria shares surged by N61.063 billion, or 1.52%, following the day’s trading, climbing from N197 per share to N4.009 trillion the previous day to N200 per share or N4.071 trillion today.
Market analysts state that increased interest rates undoubtedly influence equities, but if investors target the appropriate sectors, they can still profit. This involves scrutinizing certain industries that have thrived despite a sluggish overall economy.
Investment analysts suggest that dividend-issuing stocks with strong fundamentals are likely to perform admirably due to their commendable performance in the first half of the year.
They noted that the declining share prices of publicly traded companies in this sector make it more appealing, indicating that now is an opportune moment for investors to accumulate shares to gain from capital appreciation and enhanced dividends as the economy stabilizes.
When advising investors, Kasimu Garba Kurfi, the chief executive officer and managing director of APT Securities and Funds Limited, stated:
“In periods of elevated interest rates like the present, focus on stocks that offer double-digit dividend yields such as GTCO, Zenith, UCAP, along with stocks that present double-digit earnings yields like WAPCO, Fidelity Bank, Transcorp, Dangote Cement, Dangote Sugar, Vitafoam, Fidson, BUA Foods, Nigeria Flour Mills, Presco, and also those priced below their 52-week low, including UBA, Access Holdings, GTCO, Transcorp, AIICO, and AXA-Mansard.”
