THISDAY Model Portfolio Slides Further on Continuing Profit Taking


Goddy Egene

It was a bearish week for the THISDAY Model Portfolio (TMP) last week as it recorded a further decline following continued profit taking by investors. Although the stock market was generally bearish last week, stocks in the TMP suffered significant declines as more investors locked in profits recorded over the past weeks.

Consequently, the TMP aggregate gain, which stood at 20.7 per cent the previous week, fell to 17.5 per cent last week ended 17, 2017.

TMP, an initiative of THISDAY Economic and Financial Intelligence Unit (TEFIU), is designed to enable leading stockbrokers and investment houses in the country share their trading skills and methodologies with ordinary investors. The investment houses involved in the project are Afrinvest Limited, FSDH Securities Limited, Capital Assets Limited, Meristem Limited and Lead Advisory Limited .

TMP consists of five different portfolio types constructed individually in conjunction with five leading stockbroking firms in the country with different investment objectives.

The project was executed by asking each of the partner stock broking houses in the country to construct a portfolio of 10 stocks selected according to their individual best judgement and using their best and well tested stock selection and investment strategies. They were then asked to each deploy an imaginary fund of N10 million to invest on the 10 stocks in whatever proportions they considered best.

Last Friday marked the 21stt week since the introduction of the portfolios and they have generated a total return of N8.784 million. Apart from Portfolio E that has recorded a negative return of 1.8 per cent since the introduction of the TMP, the remaining four portfolios have generated positive returns.

However, analysis of the performance of the individual portfolios showed that all of them declined last week. Although Portfolio C remained the highest performer, it fell from 34.5 per cent the previous week to 30.2 per cent last week. All the stocks that made up the portfolio closed lower last week. The portfolio valued had climbed from N10 million to N13.445 million the previous week but fell to N13.020 million last week.

Similarly, Portfolio D that remained the second highest gainer, fell from 28.6 per cent the previous week to 24.5 per cent last week. This indicates that the portfolio value, which stood at N12.865 million two weeks ago, fell to N12.452 million last week.

In the same vein, Portfolio B that maintained the third position with 25.2 per cent the previous week, fell to 23 per cent last week, while Portfolio A fell to 12 per cent, compared to 14.9 per cent the previous week.
A further analysis of all stocks in the Portfolio C showed that they maintained positive performance except one that declined and another that stagnated.

The highest positive return is 81.1 per cent, trailed by 62.1 per cent. This was followed by 47.6 per cent, 38.8 per cent, 24.9 per cent, 17.6 per cent, 13.9 per cent and1.7 per cent in that order.

Also, under Portfolio D, the stocks with negative performance remained two( 13.5 per cent and 2.84 per cent).But the highest price is 62.1 per cent, trailed by 55.9 per cent. Others included: 38.8 per cent; 24.8 per cent; 17.6 per cent; 13.8 per cent; 7.4 per cent and 3.9 per cent.