Many widely held assumptions regarding the Nigerian stock market are wholly incorrect. Most individuals consider investing in stocks a way to lose money, time, and effort. The fact that so many Nigerians struggle to become financially independent while others amass enormous wealth on the stock market can be attributed to this misperception. You need to know your onions and how to slice them into different securities that will produce big returns if you want to make a lot of money on the Nigerian stock market.
Let’s use this brief overview of the stock market to grasp better how valuable Nigerian stocks are. The Nigerian all-share index was just under 6,000 NGN in 1998; in only 10 years, it had grown by 1,000%, turning 1,000 NGN into 1,000,000 NGN. This growth has continued, as 2022 closed the year strongly with a gain of 19.98 per cent, a significant increase from the 6 per cent achieved in 2021.
For the first time since 2000, stocks have posted increases for three straight years. This increase will enable you to comprehend the stock market’s profitability as the year progresses.
This post will outline 5 Nigerian stocks poised to soar in value in 2023. We’ll explain why they are a trusted source for stock market investments. It’s crucial to understand that there are two categories of stocks: growth stocks and value stocks, before moving on. Let’s examine what each means.
What distinguishes growth stocks from value stocks?
A growth stock is one that you predict will see quicker revenue and profit growth than the overall market. Instead of receiving income from dividends, investors prefer growth stocks to profit from the quick price rise they offer. Investors who purchase growth companies are seeking explosive growth, not dividend income.
On the other hand, a value stock is one that you believe is trading at a discount to its true worth. Investors purchase value stocks with the anticipation that other market players will soon recognize their undervaluation, purchase the shares, and raise prices. Value corporations are more likely to pay dividends because they are only sometimes growth-oriented. They are less volatile, have lower risk, and have smaller upside potential.
Most people enter the stock market without understanding how to obtain good stocks, where to hunt, or what to watch out for. To cut through the “noise” in the stock market, we conducted thorough research and identified 5 Nigerian stocks you should invest in. Keep reading as we investigate these firms.
- ETranzact
Implementing a cashless policy, in which transactions are conducted online rather than with actual money, is one of CBN’s goals for 2023. The first quarter of the year’s results indicates a physical cash supply constraint, making the 2023 electronic payment industries the top winners.
People are turning to online transactions more frequently these days, causing a rise in the use of mobile apps, ATMs, mobile banking channels, etc. Because of this, ETranzact has a great chance of turning a significant profit in 2023.
To facilitate transactions during and after business hours, the ETranzact corporation provides numerous payment channels compatible with most Nigerian banks. The company’s profit increased from 1.8 million NGN to 3.4 million NGN in the final quarter of 2022, or over 100%, in profit.
- Nigerian Breweries
The Nigerian breweries produce stout, alcoholic malt and a variety of soft drinks. They also promote and sell these products. Nigeria has a very high percentage of alcoholic and non-alcoholic beverage consumption. Hence Nigerian Breweries will always be a relevant industry in the Nigerian stock market.
When this article was published, the stock had a 40 NGN price, a 0.12% interest rate, and an annual return of more than 9.22%. With a market capitalization of approximately 426 billion NGN, one of the most valuable stocks in Nigeria, it accounts for roughly 1.41% of the equity market on the Nigerian stock exchange. I’m confident you can now see why Nigerian Breweries is one of my recommendations for stocks that will soar in value.
- Dangote Cement
One of the top manufacturers and producers of cement and associated goods is the Dangote Cement Company. The demand for cement will continue to rise in Nigeria as more buildings are constructed at an increasing rate.
The net income increased by 31.24% from 275.08 billion NGN to 361.07 billion NGN, while the returns for Dangote cement increased by 33.79% from 1.03 trillion NGN to 1.38 trillion NGN.
- MTN Nigeria Communications Plc
The present company, MTN Nigeria Communications PLC, formerly known as MTN Nigeria Communications Ltd., is in the business of setting up and maintaining GSM cellular network systems in Nigeria and offering other services related to this sector.
The company offers a variety of goods and services, including mobile financial services (fintech), broadband fixed wireless access services and telephony services.
The corporation’s segments are the Consumer Business Unit (CBU), the Enterprise Business Unit (EBU), and the Wholesale Business Unit.
The Enterprise Business Unit, often known as EBU, offers products and services to meet the needs of both small and medium-sized businesses and major corporations.
Its Wholesale Business Unit (WBU) offers services to clients that purchase MTN telecom products in large quantities to resell these items (mobile or fixed) to their other clients, who may be either internal or external.
Millions of MTN Nigeria clients have access to the mobile network and technological solutions through the organization’s 15 service centres, 144 Connect Stores, and 247 Connect Points, dispersed throughout Nigeria’s 36 states.
MTN International (Mauritius) Limited owns 75% of MTN Nigeria. In comparison, Nigerian shareholders through special purpose corporations own 18% of the company, Mobile Telephone Networks NIC B.V. owns 2.7%, and Public Investment Corporation SOC Limited owns 1.7%.
MTN Nigeria is ranked third on the NGX with a market cap of NGN 4.09 trillion or approximately 15.4% of the stock market on the NGX.
The year-to-date performance of MTN’s share price, which began at 197.00 NGN, has climbed by 2.03%, moving it on the NGX.
- Unilever Nigeria
The company Unilever Nigeria Plc produces and sells home and personal care items. Food Products and Home and Personal Care are its two main product categories. Sales of tea and savoury foods are included in the Food Products section.
Sales of products for oral care, home cleaning, skincare, and fabric care are all included in the Home and Personal Care category. The company was founded by William Hesketh Lever on April 11, 1923, and is headquartered in Ikeja, Nigeria.
With a market value of NGN 77.6 billion or around 0.291% of the equity market on the Nigerian Stock Exchange, Unilever Nigeria is one of the most valuable equities listed on the NGX.
In Summary
It would help to keep your emotions in check to succeed in the stock market. In logic, you blend the three types of analysis to aid in making informed decisions. Consequently, while evaluating stocks, use logic rather than making price predictions based on feelings; instead, use logic.
