Nnewi-based cable manufacturer, Cutix Plc is currently trading at a share price of N6.13, marking a 46% appreciation from its July 12 opening price of N4.20.
The company announced a dividend payment of N0.15 per share as well as a bonus share issuance on July 12, which led to a 10% appreciation in its share price that day. The stock then appreciated by 9.96% and 9.84% on July 15 and July 16 respectively.
As of 12.30 pm on July 17, the stock had already appreciated by 9.86% with a turnover volume of about 187.2 million shares, reflecting immense attention from investors.
Cutix’s share price history
- The N6.13 share price currently being traded by Cutix Plc is N0.10 short of the stock’s all-time high share price of N6.23 achieved on October 25, 2021.
- It also reflects a year-to-date return of 144%, making it one of the best performing stocks in the NGX this year.
- Despite the impressive performance of the stock this year, historical antecedents show that there is a high probability of the stock’s performance being a bull trap.
- Between May and August 2021, Cutix appreciated by about 160%, further appreciating to N6.23 as of October 2021.
- However, between October 25 and December end, the stock depreciated by about 59% to end the year at the N2 share price level.
However, analysts are of a different opinion, noting that the proposed bonus share issuance is the sentiment driving the bullish run.
Ekene Oyeka, a securities dealer with Norrenberger Securities Limited, speaking to Nairametrics noted that the bullish run will persist till the cutoff date is announced for the bonus share issuance.
He noted, “The basic sentiment driving Cutix right now is the announced bonus share issuance. The stock is currently on full bid, there are no offers, meaning there are no sellers trying to supply to the market.”
“As we speak, people are not willing to put out their Cutix shares because of the bonus share.”
When asked about possible end to the bullish ride, he noted,
“I project that people would want to hold back till the cutoff date is announced. When the cutoff date for the bonus issuance is announced and they’ve qualified for the bonus issue, then we’ll begin to see selling.”
“We may see this run up until next week, depending on when and how the information comes out.”
What you should know
At the end of its board of directors meeting on July 11, the directors of Cutix Plc announced a dividend of N528.4 million, reflecting a 25% increase from the N422.7 million dividends paid for FY 2022.
According to the corporate disclosure released by the company, the dividends will be vetted by shareholders during the company’s Annual General Meeting to be held on August 30, 2024.
The corporate disclosure also contained a proposed bonus share issuance of one share for every share held by existing shareholders.
The NGX is currently on a bullish run, with the All-Share Index currently at 100,239.83, the highest in two weeks.