Nestle, Presco, International Breweries shine in NSE 30 Ten-year challenge
In the spirit of the 10 Years challenge, we decided to evaluate the 10 years performance of NSE 30 stocks. Leading the chart is Nestle Plc. with a whooping return 830% over the 10 years while Energy companies, Oando and Forte Oil led the laggard list as they lost over 87% of their values in 10 years.
Interestingly, with or without accounting for devaluation some stocks and indexes have outperformed in the last 10 years.
Top Gainers Nestle Plc
Despite the harsh economic environment and the economic contraction of 2016 which saw a reduction in the purchasing power of consumers in the country, Nestle has continued to show resilience through a strong understanding of the Nigerian market, a continuous improvement of its products, and top notch management team. The Company has also over the years invested in backwards integration which has seen a sharp reduction in its operating cost. It also grew its profit by a whopping 326% from N7 billion in full year 2106 to N33 billion in 2017. Presco Plc
The gain in the Stocks of Presco and Okomu Plc can be attributed to the CBN policy which restricted importers of Crude Plam Oil into the country from accessing the FX market created by the CBN. The policy has resulted in the revival and creation of more cottage industries which now engage in the production of the restricted items across the country. The policy saw Presco’s revenue surged by from 15.72 billion in 2016 to 22.36 billion in 2017 while Profit After Tax grew by from 21.73 billion in 2016 to 25.4 billion in 2017.
International Breweries Plc.
Beer maker, International Breweries has been in the news in recent times following of the entry of Sabmiller, then, the world’s second-largest brewer, into the country, and its acquisition of majority shares in International Breweries Plc, makers of Trophy Beer, located in Ilesa, Osun-state. However, in 2017, AB Inbev the world’s largest brewer, acquired 72.17% of SABMiller’s shares in International Breweries Plc, in a series of transactions which resulted in AB Inbev acquiring controlling interests in the company. The launch of a new product Budweiser which is dubbed as the king of beer has also intensified the competition in the market
GUARANTY TRUST BANK
Guaranty Trust Bank Plc., a tier one lender which provides commercial banking services to its customers is renowned for its innovative approach to banking. Gtbank has over the years earned a good reputation for its corporate governance. The recipient of numerous awards, including the 2018 award for the categories: ‘ Most innovative bank ’, ‘Best Digital wallet’, “Best Mobile Payment service’, “USSD Channel Champion’’, ‘Best Customer experience’’, ‘ Best Retail Bank’ to mention a few, has over the years revolutionized Nigeria’s banking industry by offering services that appeal to the younger, tech-savvy generation; morphing from the traditional service delivery approach to a more cost efficient approach and retaining its young customers as they join the labour force.
‘ The bank has been able to define its market, focusing on the youthful population. The model of the bank is very clear and they have a well- articulated strategy they use in actualising goals associated with this model’’ Gbolahan Ologunro, an analyst at CSL Stockbroker explained.
Guaranty Trust Bank also has a good risk assessment framework which has enabled the bank to keep its Non-performing loan (NPL) ratio lower than the for most of its peers, although in H- 1 2018, the NPL was some 5.8 per cent which was above the regulatory benchmark of 5 percent.
In addition, the tier one lender has one of the lowest costs of funds in the industry buoyed by its large customer base of youthful working class population who have also contributed to the growth of its noninterest income which has been on the back of improved transactions over GTB’S digital channels.
Oando and Forte Oil Plc have seen a massive drop in its vale in the last years. Market watchers attribute this shed in value to series of leadership problems that has hampered the growth of the two energy giants. Oando was recently enmeshed in crisis when some shareholders of the company alleged the management of the company over poor handling of the firm’s finances. Also the fluctuating oil prices in the global market have negatively affected the profitability of these energy companies. While tier 2 lenders, Union Bank, Fidelity and Eco Bank Transnational Incorporated have also slump in their value.