Consumer Goods, Banking Stocks Drive Growth of THISDAY Model Portfolio

By Goddy Egene

The THISDAY Model Portfolio (TMP) that was introduced July 3, 2017 posted a growth of 28.5 per cent in the first six months ended December 29, 2017.

TMP is an initiative of THISDAY Economic and Financial Intelligence Unit (TEFIU), 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.

 Each of the partner stock broking houses   constructed   a portfolio of 10 stocks selected according to their individual best judgment and using their best and well tested stock selection and investment strategies. Each of them then deployed an imaginary fund of N10 million to invest on the 10 stocks in whatever proportions they considered best.

Within six months of its deployment, the TMP recorded an aggregate growth of 28.5 per cent as the imaginary N50million deployed grew to N64.275 million.

However, an analysis of the individual portfolios showed that three recorded performance higher than the aggregate growth.  For instance, Portfolio C recorded a growth of 44.9 per cent, indicating that the N10 million deployed has grown to N14.489 million. Similarly, Portfolio B ended 2017 with gain of 42.2 per cent, implying that the N10 million has improved to N14.224 million, while Portfolio B closed the year with a growth of 33.1 per cent. This means the N10 million deployed improved to N13.312 million.

Portfolio A recorded a return of 21.7 per cent as the N10 million deployed has appreciated to N12.168 million. Portfolio E recorded the least growth of 0.81 per cent.

A further breakdown of the Portfolio C that   recorded the highest growth of 44.9 per cent, showed it was able to achieve the growth from a mix of stocks from banking, consumer goods and industrial goods sectors of the market.

The 10 stocks selected by Portfolio C include: Guaranty Trust Bank Plc which got 10 per cent of the N10 million deployed;  Zenith Bank Plc(15 per cent);  Nigerian Breweries Plc (10 per cent);  Lafarge Africa Plc( 10.2 per cent); Dangote Cement Plc(7.5 per cent); Dangote Sugar Refinery Plc (10 per cent); Dangote Flour Mills Plc (10 per cent); Nestle Nigeria Plc (10 per cent) Unilever Nigeria Plc (5.0 per cent) and Guinness Nigeria Plc (15 per cent).

Among the stocks, Dangote Flour Mills Plc recorded the highest appreciation of 144.5 per cent. It was followed by Dangote Sugar Refinery Plc with 126.2 per cent growth. Nestle Nigeria Plc ended with a gain of 72.7per cent, just as Guinness Nigeria Plc and Zenith Bank Plc posted 38.4 per cent and 25.1 per cent respectively. GTBank Plc, Dangote Cement Plc and Unilever Nigeria Plc advanced by 18.3 per cent, 13.8 per cent and 11.2 per cent in that order.

However, only two stocks recorded decline in the review period. They are: Nigerian Breweries Plc (16 per cent) and Lafarge Africa Plc (10.2 per cent).

Portfolio D that posted a return of 42.24 per cent has the following stocks: Access Bank Plc; Total Nigeria Plc; Custodian Plc; Dangote Cement Plc; GTBank Plc; NASCON Allied Industries Plc; Dangote Sugar Refinery Plc; Nestle Nigeria Plc; Presco Plc and Zenith Bank Plc. The highest price gainer was Dangote Sugar Refinery Plc with 126.2 per cent, followed by NASCON with 98.9 percent, while Nestle Nigeria Plc appreciated by 72.7 per cent. Zenith Bank Plc advanced 25.1 per cent.  GTBank Plc garnered 18.3 per cent, just as Dangote Cement Plc chalked up 13.8 per cent. Access Bank Plc gained 12 per cent, while Custodian Plc and Presco Plc rose by 11.4 per cent and 0.84 per cent in that order. The only decliner is Total Nigeria Plc that shed 13.5 per cent.

For Portfolio B that posted a growth of 33.1 per cent, only one  of its stocks recorded a decline of 10.2 per cent. And that stock is Lafarge Africa Plc. The remaining nine stocks ended positively, led by Dangote Sugar Refinery Plc with 126 per cent. NASCON Allied Industries Plc trailed with 98.9 per cent. Nestle Nigeria Plc rose by 72.9 per cent, while   Zenith Bank Plc garnered 25 per cent, just as Cadbury Nigeria Plc and United Bank for Africa Plc appreciated by 18.6 per cent and 18.4 per cent respectively.   Flour Mills of Nigeria Plc closed the period with a gain of 7.4 per cent.

Portfolio A posted a growth of 21.7 per cent in the six months under review. The stocks in the portfolio include: Access Bank Plc; UBA Plc; GTBank Plc; Zenith Bank Plc; Lafarge Africa Plc; Nigerian Breweries Plc; Dangote Sugar Refinery Plc; Nestle Nigeria Plc and Total Nigeria Plc.

Three of the stocks suffered decline, while seven appreciated. Dangote Sugar Refinery Plc led with 126 per cent, trailed by Nestle Nigeria Plc chalking up 72.7 per cent. Zenith Bank Plc gained 25.1 per cent, just as UBA garnered 18.4 per cent. Dangote Cement Plc appreciated by 13.8 per cent. Access Bank Plc closed the period 12 per cent higher. The losers included: Nigerian Breweries Plc (16.2 per cent), Total Nigeria Plc (13.5 per cent), and Lafarge Africa Plc (10 per cent).

Meanwhile, Portfolio E that posted the lowest growth of 0.81 per cent has GTBank Plc, Dangote Cement Plc, UBA Plc, Custodian Plc, AXA Mansard Insurance Plc, Nestle Nigeria Plc; Lafarge Africa Plc; UAC of Nigeria Plc; UACN Property Development Company Plc and Access Bank Plc.

Three of the stocks declined while seven appreciated in value with the highest gainer being Nestle Nigeria Plc with 72.7 per cent. GTBank Plc rose by 18.3 per cent, followed by UBA Plc with 18.4 per cent. Dangote Cement Plc gained 18.1 per cent, while Access Bank Plc, Custodian Plc and UACN Property Development Company Plc advanced by 12.0 per cent, 11.4 per cent, 3.7 per cent.

The decliners are:  Lafarge Africa (10.2 per cent), AXA Mansard Insurance Plc (nine per cent); and UACN (2.4 per cent).