Expectation by Investors HOPE of a rising index for the equities market was last week dashed, as investment value for the week plummeted by 3.2 per cent.The logical thinking of most investors, both local and foreign, was that there was need to take position in the market for capital appreciation, as well as for return on dividend; just as the banking subsector is expected to turn in financials at the end of the first quarter.But as transactions showed from the beginning of trading last week, huge losses were recorded from virtually all the subsectors, thus dragging the value of the twin market indicators, the market capitalisation and the All-Share Index, to their lowest figures since the commencement of activities in the market in the year.The fall in the prices of shares sparked off another round of lamentation from investors who ostensibly believed that the straight losses in the five days of trading in the market during the week was a signal of worse things to come, in this period when confidence is yet to fully return to the market.The investors worry was further amplified when cash cow stocks in the market joined the league of penny stocks to suffer price depreciation, as this was against all permutations from investment analysts. Likely reasons behind price fallThere is no gainsaying that the market is a function of demand and supply. Whenever supply surpasses demand, the prices of shares are bound to fall and vice versa.The Nigerian market has not been able to sustain the rallies witnessed in the final quarter of 2010 and in January 2011 due to a fresh cycle of negative news. The Chief Executive Officer of Oasis Securities, Mr. Edikan Ekong, said recently that such negative news includes: the recapitalisation of market operators without a formal circular or directive from the Securities and Exchange Commission, the uncertainties surrounding the exit of NSE Interim Administrator, Emmanuel Ikhazoboh and resumption of a full-time director general and other Executive directors, the tussle over the anti-securities fraud system - trade alert, concerns over the second phase of the Asset Management Companys banks - debtors resolution, among others.The inconsistencies in policy pronouncements and actions of the markets regulators have also contributed to the erosion of the gains recorded by the equities market in the past few months. Indicators in the market ended by almost 20 per cent up on index return last year which entered the New Year with about 10 per cent gain on the composite index in January. Since February, however, the market has nosedived, erasing year-to-date gains.A stock trader said the enthusiasm that greeted the take-off of the Asset Management Company of Nigeria (AMCONs) operations and the first phase of bond-for-debt swap with the rescued banks had since been moderated by a new cycle of negative news and concerns about the general market direction.The Oasis CEO said the companies announcing strong 2010 financials are benefitting just a little due to the cycle of negativity.It would be recalled that in the past few weeks, companies such as Nestle, Guinness and Nigerian Breweries, have announced satisfactory earnings for the past financial year, including some midcap stocks such as IHS and Vitafoam.A peep into the market in March by analysts shows that activities are expected to move around a few things: the second and final phase of AMCONs cleansing of banks bad debts, the auction of sovereign bonds by the Debt Management Office at mid-month, as well as anxiety on whether the new management team of the Nigerian Stock Exchange (NSE) will actually resume work on April 1st. Corporate earnings will be in the limelight with some measures of impact on equity prices.Efforts by NSE to restore confidence After a thorough scrutiny in the week, the Council of the NSE, through its Quotation Committee, approved three new issues for companies in the Conglomerates and Petroleum Marketing sub-sectors, as well as in the Alternative Securities Market/Private Placement Exchange of the NSE.Chellarams Plc got approval for an offer for subscription of N1.5 billion fixed rates notes due in 2016 (series 1), under a N5 billion medium term note issuance programme of the company. The method of distribution of the bond is book-building, while its coupon rate is 14 per cent payable semi-annually.Also approved by the Council of the Exchange was Oando Petroleum Marketing Plcs offer for sale of 171,500,000 ordinary shares of 50 kobo each at a price to be determined through book building. A total of 137,200,000 ordinary shares of 50 kobo each (representing 80 per cent) of the total will be offered to qualified institutions investors and high net worth investors; while 34,300,000 (representing 20 per cent) ordinary shares of 50 kobo each will be offered to retail investors at the price determined by the book building.Union Ventures and Petroleum Plc got the Councils approval for the placing of 70, 000,000 ordinary shares of 50 kobo each at 52 kobo per share, with Gland Energy Services Limited, following a Memorandum of Understanding dated August 16, 2010.How equities fared during the week Mondays transaction in equities saw the value of investment whittling down, with both market performance indicators plummeting by 0.63 per cent.The market capitalisation of equities depreciated by N53 billion or 0.63 per cent to close at N8.315 trillion as against the opening capitalisation of N8.368 trillion, while the All-Share Index equally went down by 0.63 per cent or 164.34 basis points to close at 26,016.84 index points in contrast to 26,181.18 as its opening index.16 stocks recorded price appreciation as against 38 others which depreciated in value. CAP Plc led the price gainers chart with a gain of N1.66 to close at N37.39. International Breweries followed with a gain of 31 kobo to close at N6.61, while Nigerian Breweries added 30 kobo to close at N76.30.On the other hand, WAPCO led the losers table with a loss of N1.50 to close at N40.50. Dangote Sugar followed with a loss of 76 kobo to close at N14.54, while Zenith Bank shed 48 kobo to close at N15.22, among other losers.Further analysis of the days trading showed that the banking sub sector maintained its lead as the most active in terms of volume. The sector, buoyed by the activities in the shares of two rescued banks Intercontinental Bank and FinBank, recorded a turnover of 254.4 million shares valued at N1.6 billion in 3,917 deals.On the whole, investors staked a turnover of 444.7 million shares valued at N2.4 billion in 6,327 deals. Transaction in shares continued downturn on Tuesday, with more highly capitalised companies joining the list of losers.The market capitalisation depreciated further by N46 billion. Turnover of shares traded also declined to 217.1million shares worth N1.8billion, which changed hands in 6,399deals, down from 444.7million valued at N2.4billion, exchanged in 6,327deals the previous day. Market capitalisation dropped to N8.269 trillion from N8.315 trillion, while the All-Share Index fell from 26,016.84, to close the day at 25,871.22 basis points.A review of price movement in the day showed that 37 companies recorded price depreciation compared to 12 that constituted the gainers chart.Precisely, Ikeja Hotel, Ashaka cement, Nigerian Bags Manufacturing Company and Beta Glass topped the losers table to close at N1.71, N26.03, N2.66 and N14.07 per share, respectively, followed by Spring bank with 4.91 per cent to close at N1.55 per share.Finbank lost 4.88 per cent to close at N0.78 per share, while Red Star Express and Bank PHB shed 4.85 to close at N3.14 and N1.57, respectively.With transactions exchanged in 3,625 deals, the banking subsector dominated in volume terms with 156.2million shares worth N1.2billion, while the insurance subsector followed with 17.3million units valued at N14.5million in 172 deals. The Conglomerates subsector ranked third with 14.3million units valued at N74.1million in 324 deals.Investment in shares continued uninterrupted on a downward note on Wednesday, as most of all the blue chip stocks ended transactions in the red, resulting in market capitalisation sliding further by N59billion. 39 companies depreciated in price compared to 19 that constituted the gainers list. The All-Share Index slid by 182.80 basis points or 0.7per cent from 25,871.22 recorded on Tuesday to 25,688.42, while market capitalisation dropped by N59billion from N8,269trillion to N8,210trillion.In the days trading, AG Leventis, Beco Petroleum, Nigerian Bottling Company and Cement Company of Northern Nigeria topped the losers list with five per cent to close at N2.28, N0.57, N38.95 and N13.31 per share, respectively.Diamond Bank followed on the list with 4.97 per cent to close at N8.22 per share.Premier Paints lost 4.96 per cent to close at N10.93 per share, while Dangote Flour shed 4.94 per cent to close at N16.92 per share.On the other hand, International Breweries led others on the gainers list with 4.91 per cent to close at N6.63 per share, while Nigerian Bags Manufacturing Company followed with 4.89 per cent to close at N2.79 per share.Poly Products added 4.83 per cent to close at N1.52per share while Champion gained 4.75 per cent to close at N3.75 per share.Further analysis of the days trading showed that the banking subsector maintained its dominance in volume terms with 142.8 million shares worth N1.2 billion in 3,121deals, followed by the Food and Beverages and Tobacco subsector which traded 14 million units valued at N296 million in 459 deals. The Conglomerates subsector featured trading with 13.4 million units worth N84.9 million in 251deals.Thursday witnessed another round of drops in value investment as more highly capitalised companies joined the losers list, resulting in the All-share index to depleting further by 0.5 per cent.However, turnover of shares traded increased marginally, as 265million shares worth N1.7 billion changed hands in 5,535 deals, higher than 229 million units valued at N1.9 billion exchanged in 6,147 deals on Wednesday.A review of activities showed that market capitalisation slid further by N47 billion or 0.57 per cent from N8,210 trillion recorded on Wednesday to N8,163, while the All-share index dropped by 146.68 basis points from 25,688.42 to 25,541.74.Specifically, 36 stocks depreciated in price led by Dangote Flourmills with 4.96 per cent to close at N16.08 per share, while Afromedia followed with 4.92 per cent to close at N0.58 per share.Cement Company of Northern Nigeria and Oceanic Bank lost 4.88 per cent to close at N12.66 and N2.34 per share, respectively while RT Briscoe shed 4.75 per cent to close at N2.81per cent. Union Bank, Guaranty Trust Bank and United Bank for Africa also dropped 4.74, 4.68 and 4.67 per cent to close at N3.62, N1.63 and N9.38 per share, respectively.15 stocks appreciated in price, as Afribank emerged the days highest price gainer with 4.98 per cent to close at N2.11 per share. Custodian & Allied insurance followed with 4.36 per cent to close at N3.35 per share.Prestige Assurance added 4.17 per cent to close at N2.25 per share, while Union Homes fell 4.11per cent to close at N0.76 per share.Unity Bank, Royal Exchange, FinBank gained 3.88, 3.85 and 2.67 per cent to close at N1.34, N0.54 and N0.77 per share.PZ Cussons also went down 1.38 per cent to close at N33.00 per share while Fidelity Bank gained 1.14 per cent to close at N2.66 per share.On the activity chart, the banking subsector maintained its dominance in volume terms with 183.6 million shares worth N1.1billion in 3,356, followed by the insurance subsector which traded 32.3 million units valued at N30 million.Trading figures for Friday were not different from the bearish trend that greeted the equities market in the week. Transaction in the day saw stocks value depreciating by a total of N59 billion.Specifically, the twin market indicators the All-Share Index fell by 183.9 basis points to close at 25,357.84 from 25,541.74 while market capitalisation dropped by 0.72 per cent to close at N8.163 trillion.
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