The average year to date performance for the top-30 best performing stocks on the Nigerian exchange or NGX in 2023 was 376%, according to MoneyCentral’s analysis of market data.
This is equivalent to 8.4 times the broad market index which rose 44.43% in the same period, meaning Santa came early with his goodies for investors that owned the top stocks.
The best performers included Transnational Corporation of Nigeria or Transcorp which retuned +678%, MRS oil +644.68%, Computer Warehouse Group +612.87%, FTN Cocoa +434.48%, Skyway Aviation +407%, Dangote Suger Refinery +257.94%, UBA +236.8%, and BUA Foods +206% among others.
Catalysts for stock rally
Billionaire Femi Otedola’s accumulation of Transcorp Plc, shares with his purchase of 5.5 percent stake at the conglomerate in April 2023, which he later sold some fifteen days later, triggered the unprecedented stock rally that the company and its owners are still enjoying.
Prior to the purchase, Transcorp’s share price was stuck for years at an unimpressive level close to or below N1 that indicated investors did not see growth potentials in the company.
On Wednesday April 12, 2023, when news first broke of Otedola’s major stake buy in Transcorp, the share price opened trading at N1.35 per share, and has been on an upwards trajectory since then.
Shares of the conglomerate closed trading at N8.80 per share on Friday (December 22), with many analysts expecting it to hit N10 in the very near future.
The rally in the Oil and Gas sector was underpinned by reforms in the downstream sector led by the removal of fuel subsidy.
Removal of the subsidy on Premium Motor Spirit (PMS) by the newly elected President Bola Ahmed Tinubu is expected to bolster sector players’ earnings, which paves the way for them to pay bumper dividend.
Computer Warehouse Group
Computer Warehouse Group is a financial technology or fintech targeting demand among Nigeria’s vast ranks of consumers without bank accounts.
Computer Warehouse has operated since 1992, but the establishment last year of Fifthlab, which provides mobile money, billing and payment platforms used by consumers, small businesses and banks, has quickly become a strong growth driver, said CEO Adewale Adeyipo.
Only about 45% of adults in the nation of more than 200 million have bank accounts, according to the World Bank, compared with an average of 70% in the BRICS economies.
OH Ecosystems Ltd (“Eco”), Norfund, the Norwegian Investment Fund for developing countries, recently announced that it had successfully acquired a majority stake in FTN Cocoa Processors PLC (“FTN”)—a publicly traded company based in Ibadan, Nigeria.
With 20,000 metric tons of installed capacity, FTN transforms cocoa beans into semi-finished products (cocoa liquor, butter and powder) for commercialization to global and local clients. Prior to this investment, FTN had been dormant and underutilised for several years.
Norfund’s investment will upgrade FTN’s operating facilities and extend its reach to produce and sell additional products into the cocoa supply chain.
Dangote Sugar Refinery
Catalysts for the rally in Dangote Sugar Refinery Plc is the notification to the Nigerian Exchange Limited and the investing public that the Board of Directors of the Company resolved to recommend the proposed merger between the Company, NASCON Allied Industries Plc (NASCON) and Dangote Rice Limited (DRL) to the Shareholders of the Company for consideration and approval, subject to parties agreeing terms and conditions.
The Company, NASCON & DRL hereinafter referred to as the “Merging Entities” are all subsidiaries of Dangote Industries Limited.
It is expected that the Transaction will consolidate and solidify the Group’s market position and ultimately reposition the Group to harness future opportunities in the foods industry.
In 2023 BUA Foods Plc came out of the blue to outperform peer rivals who had long been listed on the NGX index as the company weathered the storm by recording strong growth in financial metrics.
UA Foods Plc delivered strong top and bottom line returns across business portfolios, emerging as one of the largest companies by earnings in Nigeria.
BUA Foods’ revenue grew by 81 percent year on year (y-o-y) to N524.4 billion in the first nine months of 2023 (9M 2023) from N289.80 billion as at September 2022.
There were significant improvements at the divisions.
For instance, revenue from Flour division that contributed 29 percent to Group sales surged 126 percent to N149.9 billion in September 2023 from N66.2 billion in 2022.
This was driven by increase in sales volume and gradual commissioning of the company’s expansion plans as well as redesigned route to market distribution along the integrated supply value chain network.
It is interesting to note that volume sold increased by 73 percent to 238,785 tons within the period from 138,284 tons in September 2022.