Investors can anticipate favorable returns from penny stocks
Penny stocks, including those from insurance companies like Sterling Financial Holdings Company Plc and JapaulGold, are anticipated to showcase positive performance on the Nigerian Exchange Limited in the current year.
As outlined in the FY 2023 Review and 2024 outlook report compiled by financial services holding company Afrinvest, the stocks considered in this projection are those trading below or around N5 per unit.
The optimistic outlook for Sterling Financial Holding Company Plc stems from its collaboration with the African Export-Import Bank, which is expected to enhance non-oil exports both within and outside Africa, coupled with sustained operational efficiency, as highlighted in the report.
Sterling recently inked a $75 million pact with the African Export-Import Bank to promote non-oil exports in Nigeria. This agreement was formalized during the Intra-Africa Trade Fair held in Cairo, Egypt.
Furthermore, there is an anticipation of robust performance from insurance stocks in the current year. The report notes, "With NAICOM's efforts to stimulate sector growth and enhance global competitiveness, the potential implementation of a risk-based capital framework in 2024 is poised to act as a catalyst for further progress."
Regarding mining company JapaulGold and Ventures Plc, a segment of the projection states, "JapaulGold achieved post-tax profits for the first time in seven years, driven by a notable 215% increase in topline revenue. The proposed acquisition of a 50% equity interest in H&H mines and full ownership of Covenant Gems and Gold minerals, if successfully completed, would strategically position the company as a market leader."
Honeywell Flour Mills' stocks were factored into the projection due to the company's production of essential goods, presenting an opportunity for revenue enhancement through potential increases in pricing and volume.
Similarly, the real estate firm UPDC was considered in the report, with a statement noting, "In response to government interventions aimed at fostering growth in the real estate market through capital market expansion."
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