Analysts, Others Forecast High Yield, Commend Trancorp Shares as Firm Lifts NGX in One Week
- Analysts and stockbrokers are projecting high yields for the recently-listed Transcorp shares and its Subsidiary, Transcorp Power
- The company’s shares lifted the Nigerian Exchange Limited (NGX), crossing the N2 trillion mark in two days after listing
- The brokers and analysts commended the company for the successful listing and asked investors to exploit the situation
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Financial analysts and stockbrokers have been speaking on the listing by the introduction of Transcorp Power Plc on the Nigerian Exchange, with many forecasting high yield for discerning investors while also believing the listing presents opportunities for deeply enriching the nation’s capital market while also providing funding leverage for Nigeria’s power sector.
Source: UGC
A cross-section of those who spoke on the listing said it would open the eyes of the players in the power sector to the low-cost funding opportunities provided by the capital market.
Experts express optimism
Speaking on the listing, Abdulmumin Ali, a financial analyst based in Abuja, said playing in the capital market will provide impressive rewards for investors and help enrich the Nigerian capital market.
Noting that Transcorp Power shares have already gained more than 47% since it was launched one week ago, Ali predicted a sustained good performance of the stock in the market and said investors who take early positions will reap immense benefits in the short to medium term.
“Anybody with investible funds at this time should buy Transcorp Power shares. Such investments will likely triple within the next year,” Ali predicted.
On where he hinged his prediction, Ali pointed at the 84% spike in profits between 2022 and 2023 and the exponential increase in share capital over the same period as indicators of great opportunities for investors.
“Transcorp Power had their Revenue From Contract With Customers grow by 57% over the past year to culminate in a Profit Before Tax of N52.7bn asoft the year ended December 31, 2023.This, in effect, was a Profit spike of 84% from N27.6bn as oft December 2022. Again, you will note, when you review the Independent analysts’ reports that their topline has grown consistently over the pastfive5 years, with good efficiency ratios.”
Also speaking on the listing, Mike Eze, CEO of Crane Securities Limited, said the listing of Transcorp Power on the Nigerian Exchange bodes well for both the newly listed company and Nigerian investors, adding that the Nigerian securities market remains the destination of choice for businesses in need of low-cost capital, while also providing the right opportunities for the diversification that improves governance.
Stockbrokers commend Transcorp shares
Eze expressed confidence that the Nigerian securities market has the sophistication and stature to absorb any funding demands of the power sector companies such as Transcorp and urged other players to embrace the capital market.
Ours is an emerging market, rated the world's best-performing market in 2023 by the International Finance Corporation (IFC). We received favourable ratings from other international agencies as well. The capital market can raise funds to any required capacity. It all depends on the needs of the issuer! This market, the Nigerian Exchange Pl,has the capacity and the appetite to meet the demands of the power sector and other sectors should they all decide to come simultaneously, he saidh.
Also speaking, Vincent Ugwu, Managing Director/CEO of De-Lords Securities Limited, believes the capital market may eventually become the destination of most of the players in the power sector in Nigeria because of the market's advantages in raising low-cost capital.
“There is no doubt that the interest that investors are showing in the stocks of Transcorp Power will attract other players. Opportunities abound in Nigeria's power sector. There are opportunities in the gas value chain, opportunities to widen the coverage areas, and opportunities to cross-border the selling of power. Discerning players such as Transcorp Power will always come to the capital market and get the sort of growth they dream of,” Mr Ugwu stated.
After earning N180bn on the first trading day, Transcorp Power hits to N2.2trn
Legit.ng reported that the newly listed Transcorp Power shares began trading a day after debuting on the NGX board and featured over 16.9 million shares fully subscribed to with zero offers.
During mid-day trading of Thursday, March 7, 2024, a share volume of about 58 million units was sold at a share price of N295.4 per share, giving Transcorp Power a market valuation of N2.2 trillion.
The development highlights the demand for the new power company, which concluded trading on Monday, February 6, 2024, with a 10% increase to bring its total market value to N2 trillion.
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Source: Legit.ng
