January 30,2022

Flour Mills of Nigeria (FMN), Unilever, and Nigerian Breweries are some of the stocks to watch this week after the equity market resumes trading.

Ripples Nigeria stocks watchlist is a selection of stocks monitored for viable trading or investing opportunities. An investor may casually generate a list of equities for investment purposes. But we have taken the pain to do that based on certain parameters in order to save you that hassle

Kindly note that Ripples Nigeria Stocks Watchlist is not a buy, sell or hold recommendation. It is advisable to consult your financial advisor before making any investment decision.

Flour Mills/Honeywell

Flour Mills of Nigeria (FMN) is in a dilemma after it failed to heed the warning of Ecobank against acquiring its market rival, Honeywell Flour.

Due to a Supreme Court order confirming Honeywell owe billions of naira to Ecobank, Flour Mills is now at risk of losing some Honeywell assets to the creditor.

These assets were exchanged as collateral for N5.5 billion loan obtained from Ecobank, and the lender could sell off the assets if Honeywell fails to pay the debt.

Whether the assets are sold, or the debt is paid, Honeywell will be affected financially, and it could impact on the investment value expected by shareholders

In 2022, Unilever reported that its profit after tax rose to N9.86 billion, surpassing the N1.87 billion recorded in the corresponding period of 2021.

While this is good news, the inability of the company’s management to curb expenses is eating into Unilever’s revenue, taking up 64.51 per cent of the firm’s turnover in 2022.

Unilever reported that its revenue last year was N88.72 billion, but its cost of production climbed to N57.23 billion. This is weighing on the firm’s turnover and net profit, and could impact investors’ confidence this year.

Note that in the same year cost gulped 64.51 per cent of revenue, and shareholders’ investment value dropped by -15.5 per cent, wiping off N12 billion from their investment in Unilever and reducing the firm’s market valuation from N79.10 billion in 2021 to N66.81 billion at the end of last year.

Nigerian Breweries

Last week was a disappointing outing for shareholders of Nigerian Breweries, as they lost 9.69 per cent of their investment to sell off or low demand among capital market investors.

According to the trading data obtained from the Nigerian Exchange Limited (NGX), it was learnt that the sell-off dragged down the share value of Nigerian Breweries to N41.95 kobo, from N46.45 kobo

With Nigerian Breweries ending last week’s trading among the top five losers, it will begin this week’s trading from the position, so investors need to trade with caution as the sell-off could spill into this week