GTCO Cheap to Buy as Market Price Sinks 10.58%

Guaranty Trust Holdings Company, GTCO, ranked at the worst performance, losing about 11% of its valuation in September, according to a trading report. On the other hand, Fidelity bank gained higher value in the same period.

According to a trading report from CardinalStone Partner, a Nigerian leading investment banking firm, shares of GTCO lost 10.58% due to selloffs that follow the group’s unimpressive performance in the banking sector.

GTCO is losing its allure after the move to the Holdco structure commenced and even its service delivery quality has reduced significantly, according to MarketForces Africa channel checks on the banking arm.

On the loser chart for the month, Nestle Nigeria ranked second worst performer with a 10% loss in its market valuation while Total dipped by 9.98%.

The most valuable brand in the Nigerian banking sector, Zenith Bank, lost 8.68% in September, followed closely by 8.52% share price decline in FBNH. Mansard share price was down 7.22%, followed by UCAP with 7.08% drop in market valuation.

Guinness Nigeria lost 5.69%, followed by a 3.85% price down in Seplat, a 3.23% drop in Stanbic IBTC and Access Bank declined by 3.01% in 30-day.

On the gainer chart, Fidelity Bank was the best performer on the local bourse recording a 15.36% valuation jump. The tier-2 capital bank was followed by Flour Mills of Nigeria with a 10.99% jump in share price while Union Bank of Nigeria appreciated by 10.71%.

FCMB gained 7.87%, Nigerian Breweries popped 6.37% in the month and Ecobank Transnational Incorporation saw its share appreciate by 2.27%.

Investors’ were in a pessimistic disposition toward domestic equities throughout September 2022, according to CardinalStone.

The firm said while the first half of the month was generally lulled, market entropy amplified thereafter following the stubbornly elevated inflation print and the market anticipation of a more hawkish outcome from the MPC meeting.

“In line with expectations, the MPC tightened the noose with a 150 basis points rate hike, with the CBN governor highlighting the desirability of having rates at least equal to inflation”.

The investment firm wrote that with the increasing attractiveness of fixed-income securities, investors continued to rotate out of equities to ride the wave of yield expansion.

In September, the Nigerian Exchange All-Share Index fell by 1.6% month on month versus a decline of 1.1% in August. The slowdown further moderated the year-to-date return to 14.8% as of September close.

The downturn was all-encompassing, as the NGX 30 and the five key sectoral indices also suffered losses, according to CardinalStone. The firm stated that compared to August, trade metrics thinned, with volume and value traded contracting by 22.3% and 34.5% to 3.6 billion units and ₦40.9 billion, respectively.

For domestic equities, analysts believe the aversive cloud over equities may linger longer till year-end on aggressive monetary rhetoric, bandwagon effects and election-related fears.

Notwithstanding the possibility of more market churn, we maintain that this bearish iteration presents attractive but disciplined re-entry opportunities for long term investors, Cardinalstone said.