Gains by agriculture stocks, Okomu Oil Palm Plc and Presco Plc yesterday helped to lift the market to the positive territory after the bears resurfaced the previous day.
The Nigerian Stock Exchange (NSE) All-Share Index (ASI) rose by 0.15 per cent to close at 26,385.80 compared with a decline of 0.88 per cent on Tuesday. Investors’ interest in Okomu and Presco contributed to the return of the bulls to the market. Okomu led the price gainers with 10.21 per cent followed by Presco Plc appreciated by 10.20 per cent.
Both stocks outperformed the market last year, returning 32.5 per cent and 21.5 per cent in that order. In fact, the agric sector led others on the Nigerian bourse last year.
Commenting on the development, analysts at Meristem Securities Limited had said the agriculture sector had outperformed others for the second year consecutively.
“The agric sector which contributes about 29 per cent to the country’s gross domestic product (GDP) was amongst the few to record positive output growth (+4.54 per cent) as at third quarter (Q3):2016. We attribute this to heightened government focus, coupled with the favourable policies which were implemented in the course of the year. Also, as evident from the earnings releases of the companies, the devaluation of the naira which is stifling activities of palm oil importers, resulted in a top-line boost for Okomu and Presco. We posit that investors’ appetite towards the sector will remain healthy in the coming year as the federal government continues its quest for revenue diversification,” they had said.
Airline Services & Logistics Plc was also among the price gainers yesterday, rising by 4.9 per cent, while May & Baker Nigeria Plc gained 4.4 per cent.
The Managing Director of May & Baker Nigeria Plc, Mr. Nnamdi Okafor had last month has assured stakeholders of the company of steady performance and improved returns despite the challenging operating environment.
According to him, the macroeconomic challenges notwithstanding, the company’s sales have been trending at some 13 per cent growth while the management has maintained efficient cost control to mitigate the effect of the macroeconomic headwinds on the bottom-line.
“We have continued to take advantage of improved production capacity and better cost management to mitigate the tough operating environment. Our results in 2016 have consistently shown improvement in major fundamentals, a trend which started in the last quarter of 2014 and significantly improved in 2015,” he said.