Some financial analysts have anticipated high yields for Transcorp Power shares, identifying potential opportunities for savvy investors.
Additionally, they foresee the listing as a means to strengthen the nation’s capital market and offer crucial funding channels for Nigeria’s power sector.
Speaking on the listing, Abdulmumin Ali, a financial analyst, and Managing Partner, at QL Resources Limited said playing in the capital market will provide impressive rewards for investors and also help in enriching the Nigerian capital market.
Noting that Transcorp Power shares have already gained more than 47% since it was listed 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 one year,” Ali predicted.
Financial performance
On where he hinged his prediction, Ali pointed at the 84% spike in profits between 2022 and 2023 as well as the exponential increase in share capital over the same period as indicators of great opportunities for investors.
- “Transcorp Power had their Revenue from contracts with customers grow by 57% over the past year to culminate in a Profit Before Tax of N52.7 billion as of the year ended December 31, 2023. This in effect was a Profit spike of 84% from N27.6 billion as of December 2022.
- Again, you will note, when you review the independent analysts’ reports that their topline has grown consistently over the past 5 years, with good efficiency ratios.”
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Opportunities for diversification
Also speaking on the listing, Mr. Mike Eze, Managing Director, 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.
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 a market, though an emerging market, was rated the best-performing market in the world 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 Plc has the capacity and the appetite to take the demands of the power sector and indeed other sectors should they all decide to come at the same time,” he said.
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 advantages the market has 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 the power sector in Nigeria.
- There are opportunities in the gas value chain, there are opportunities in widening the areas of coverage and there are also opportunities in cross-border 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” Ugwu stated.
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