The NSE All-Share Index and Market Capitalization depreciated by 0.28% to close the week at
40,814.89 and N14.743 trillion respectively.
Similarly, all other indices finished lower with the exception of NSE CG, NSE Premium, NSE-Main
Board, NSE 30, NSE Banking, NSE Oil/Gas, and NSE Pension indices, which appreciated by 1.08%,
1.38%, 0.54%, 0.13%, 2.34%, 0.73% and 1.42% respectively.
See – NSE weekly stock market report here
As usual, we select our top stocks to watch from a pool of stock that closed last week on a positive note. But, something is quite interesting about my pick this week; the two stocks, I am going to buy and hold for two weeks are insurance stocks.
Insurance like I shared in my post on how I analyse insurance stocks, is one of the financial products that are difficult to sell in Nigeria; the adoption of insurance policies in this part of the world is very low which is even evident in the sector’s contribution to GDP growth. However, this doesn’t mean you should avoid the big opportunities inherent in the sector; some companies are actually doing well. I shared the 3 key ratios to uncover top insurance stocks in that post and when you combine that with the potential of trading penny stocks, I still feel, insurance is a sector to look into but not without caution.
Let’s see the two insurance stocks on my radar:
Custodian And Allied Insurance Plc
The stock open at N4.9 to close at N5.09, 3.8% growth but here is why I picked the stock:
- It is trading at an all-time high right now.
- Investors’ sentiment is largely positive as the latest financial result looks good, no wonder the stock is up by 33.9% YTD, outperforming both insurance and NSE indices.
- Technically, the stock is trending up on the daily, weekly and monthly chart.
Advice: Buy now and take profit at N5.34-N5.5.
NEM Insurance Plc
The stock gained 22k to close the week at N2.62, 9.17%. NEM is one of the most profitable insurance stocks to watch this year as the company’s result so far is impressive. I have already analyzed this stock extensively when I posted my guide on “how to trade insurance stocks“. You will recall that I ended my verdict on NEM stock as “overbought” when it traded at N2.7: there was a possible fall as investors were expected to profit.
Watch this chart closely:
In line with my forecast, NEM actually fell from N3 to N2.64 (the yellow region).
Here is why and when I will buy NEM insurance:
- The overall sentiment on this insurance stock is positive on the weekly and monthly chart but the daily chart isn’t fully bullish yet.
- The latest financial result of NEM insurance is on point.
- NEM insurance is up by 66.4% YTD, outperforming the insurance and NSE indices.
Verdict: Wait for the stock to show more bullish sign this week and buy at N2.8 with a target profit of N2.94-N3.08.
That’s all for now. I hope you will follow this two insurance stocks in the next two weeks to see how they performed.