Nigerian Stock Exchange
Amid the bearish equities market, the Nigerian Association of Securities Dealers
Over-the-Counter (NASD-OTC) has advised investors to seek for unquoted stocks
that have recorded significant returns of not less than 70 percent in the last
two years. In a statement made available to Vanguard, NASD-OTC said:
“Amid the bearish equity market over the past two years, the shares of
Central Securities Clearing System, CSCS rallied strongly, gaining over 70
percent over the past two years, delivering stellar return to its shareholders.
The performance of the
stock partly reflects the steady dividend payment culture of the
Company.”Notwithstanding the share price rally, the N0.70 per share
dividend declared by the CSCS translates to 5.8 percent yield on the share
price of N12.00 as at the close of market on Friday, 07 February, 2020.
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“Beyond the steady cash flow that the CSCS dividend provides to investors, the
strong fundamentals of the company has been a compelling attraction to
investors.”Reacting on its performance, the CSCS said: “We posted N6.1 billion
profit before tax in 2018 and poised for growth in 2019 full year, FY based on
the quarterly performance, our diversification strategy has proven effective.
Renowned for our strong
governance, stable profitability and increasing earnings diversification, CSCS
remains a prime toast of investors. Despite being unlisted, the stock attracts
notable liquidity on the NASD Over-the-Counter.” Meanwhile, following two
consecutive years of bearish performance, the Nigerian equity market is
recovering fast in recent time, with the Nigerian All Share Index rallying four
percent Year-to-Date, YtD. Market operators have attributed the stellar
performance of the market in January 2020 to a number of factors, including low
valuation of stocks, high dividend yield expectations and increased allocation
to equities by fund managers, who seek higher return on investment, following
notable moderation in yields on fixed income instruments. Notably, a number of
banking stocks on the Nigerian Stock Exchange, such as Zenith Bank, UBA, GTBank
have dividend yields in excess of 10 percent, reinforcing the attraction for
equities.