Why transaction is still on the low sideAS election into various elective positions came to a close in the country last Tuesday, investors continued to exercise caution on the purchase of shares at the three trading days at the Nigerian stock market last week, even as most companies quoted in the market continued to declare plausible full year results.The resolve by investors to approach the market with all sense of caution in their investment decision for now can easily be traced to the long period of the global financial economic contraption, wherein they had their investment value depleted by almost 70 per cent.Against permutation from market analysts, the market was expected to have a great rise after the election.An x-ray of market transaction, after the election last week, showed that majority of investors are still standing arms akimbo, watching as events unfold in the equities market despite the good corporate action being reeled out by companies on the Exchange.In the wave of the economic crisis, especially in 2008, the Nigeria equities market was globally adjudged to have suffered most in terms of price depreciation in the value of shares.Present trading tied to AMCONAside the stake in shares by investors, based on good corporate action being released to the market, the AMCON listing of N1.67 billion bond has been described as another impetus that has been encouraging investors to approach the securities market with confidence.The AMCON bond listing does serve as moral boosting for the stock market which, in the recent time, has suffered largely from confidence crisis from both local and international investors.The action of AMCON is gradually making transactions to move away from a seller market to a buyer one, compared to what was obtained in the securities market some couple of weeks back.Since the bond listing by AMCON, penultimate week, volume of transaction has been on the upswing.Experts and market watchers had predicted that the signing into law of the AMCON bill and its operations in the stock market, if well implemented, would uplift the stock market which has become an anathema to the majority of investors due to the continued drop in both transaction volume and market value indicators.The AMCON, a scheme introduced by the Central Bank of Nigeria (CBN), alongside other regulatory agencies in the market, is aimed at soaking the over N2.2 trillion bad debt incurred by banks in the country. Most of the listed banks bad debts were incurred inform of margin facilities to stockbrokers, investment in both the down and offshore oil business and as a result of insider, abuse of loans by directors of the banks.It would be recalled that the 24 banks in the country and other institutions were said to be contributing to the scheme a total of N1.5 trillion.Issues at the stock marketDealing members on the Exchange last week said that the Securities and Exchange Commission (SEC) must have a rethink on another round of calling for recapitalisation of stockbroking. They argued that this was not the best of times in the equities market. They said the exercise, if actualised, would see the broking firms structured along small and big business portfolios.The SEC DGs position is to ensure a strong and vibrant capital market, but the timing is what the owners of the broking firms are really worried about, noting that the equities market was just coming out of recession and must be allowed to stabilise.Transaction in equities Transactions on the Nigerian Stock Exchange re-opened in an upward note after the three-day public holiday to commemorate the Easter celebration and for the gubernatorial election with an increase in the All-share index by 0.8 per cent.Precisely, at the close of transactions on Wednesday, the All-share index rose by 220.79 basis points or 0.8 per cent from 25,020.0 recorded when the market closed last week Thursday to 25,240.88, while market capitalisation increased by N70 billion from N7,994 trillion to N8,064 trillion. 27 stocks appreciated in price as PZ Cussons and CAP topped the days gainers chart with 4.99 per cent to close at N31.54 and N43.98 per share respectively, while Niger Insurance followed with 4.69 per cent to close at N0.67 per share.Ashaka Cement added 4.09 per cent to close at N24.15 per share, while Dangote Cement gained 4.05 per cent to close at N128.00 per share.Neimeth, Flourmill, African Petroleum garnered 4.03, 3.39 and 3.04 per cent to close at N1.29, N85.00 and N21.00 per share.Sterling Bank added 2.63 per cent to close at N2.34 per share, while Cadbury gained 2.41 per cent to close at N22.50 per share.However, AG Leventis and Custodian& Allied Insurance led 29 others on the losers chart with five per cent to close at N1.90 per share and N2.85 per share respectively. May& Baker followed with 4.99 per cent to close at N4.19 per share.Total lost was 4.95 per cent to close at N201.50 per share, while Berger Paints shed 4.93 per cent to close at N11.95 per share.On the activity chart, the banking sub-sector dominated in volume terms with 243.3million shares worth N2.3 billion followed by the insurance sub-sector which traded 27.3million shares worth N18millio in 300 deals.Transactions in the shares of Zenith Bank boosted activities in the banking sub-sector with 73 million shares worth N1.1billion in 348 deals followed by UBA with 49.9 million shares, worth N317 million in 270 deals.The insurance sub-sector was driven by activities in the shares of NEM Insurance with 14.2 million shares worth N7.3 million in 51 deals, while AIICO Insurance followed with 2.8 million shares worth N2.6 million in 55 deals.On the whole, investors traded 332 million shares valued at N3.7billion in 5,895 deals.Trading activities on the floor of the Nigerian Stock Exchange on Thursday sustained bullish rally, leading to both market performance indices inching up by 0.2 per cent.Consequently, the market capitalisation of equities appreciated by N17 billion or 0.2 per cent to close at N8.081 trillion while the All-Share Index equally added 52.28 basis points or 0.2 per cent to close at N25,293.16 index points.Further analysis shows that 33 stocks appreciated in price, led by Unilever Nigeria with five per cent to close at N26.26 per share, International Breweries followed with N4.99 per share to close at N6.31 per share.Guaranty Trust Assurance added 4.97 per cent to close at N1. 90 kobo while Custodian & Allied Insurance and Costain West Africa gained N4.91 per cent to close at N2.99 and N5.34 respectively. Union Bank of Nigeria, West Africa Portland company andAG Leventis gained N4.83, N4.81 and N4.74 per cent to close at N3.04,N41.40 and N199 per share respectively.Vitafoam gained N4.72 per cent to close at N5.55 per share, while Niemeth added 4.65 per cent to close at N1.35 per cent per share.However, TransNationwide Express led others on the losers table with five kobo to close at N6.08 per share. TransNational Corporation followed with 4.90 per cent to close at N1.36 per share.Oceanic Bank, United Bank for Africa, Wema Bank dropped 4.88, 4.87 and 4.84 per cent to close at N1.56, N6.05 and N1.18 per share.May& Baker lost 4.77 per cent to close at N3.99 per share, while RT Briscoe dropped 4.75 per cent to close at N2.81per share.
Click here to read full news..
