INVESTORS in the nations capital market are beginning to heave a sigh of relief as information trickled into the stock market last week that finances institutions, especially banks listed in the market, would soon be churning out their financials.The expectation of investors cum stakeholders is that, compared to what the banks were prior to the intervention of the Central Bank of Nigeria (CBN) in 2009, figures from the banks in 2010 will show most of them having a balance sheet devoid of toxic debts.The drive of investors who cut across small and large (institutional) firms is that most of such companies, aside the banks, may issue bonus scripts alongside the cash dividend being expected from them.The quest to have a return on investment, coupled with capital appreciation that is likely to follow the volume of equity trade in the weeks ahead, had continued to shore up indicators in the market at the beginning of trading last week.It would be recalled that experts are of the belief that as companies begin to release their results for the 2010, more investors would approach the market based on the finances that are expected to be in the positive territory.The meltdown in the price of securities in the stock market beginning from March 5, 2008 has resulted in most companies stocks in the market becoming penny stocks even as confidence in the market before now has not fully returned.The low price of stocks had made discerning investors to take position in anticipation of capital appreciation, profit taking, as well as huge return on investment that would follow the release of banks finances at the close of the first quarter of 2011.According to Cowry Asset Management analysts, We believe the market still has positive outlook as we expect the banks, which constitute more than 35 per cent of the total market capitalisation, would remain strongly sought after by investors in view of the imminent consolidation in their industry.We also expect that results which indicate improved earnings for the full year 2010 financials would soon be released by the banks. Aside the banks, several companies are still looking undervalued with some trading below their net asset per share.Also, according to analysts at FSDH, the current improved regulatory oversight on the equities market will boost investors confidence both locally and internationally.Taking another look at the market, Bismarck Rewane, CEO, Financial Derivatives, foresees an improvement in investor confidence in the market going forward, though he notes the possibility of profit-taking activity by speculators in the market. On the bond market, he said bond prices should remain stable until interest rates increase in March.More companies are contemplating bond issues as alternative to straight bank debt, he said, adding that these firms would take advantage of the Securities and Exchange Commissions (SEC)s incentives to bond issuers, as well as lower transaction costs. He is also of the view that there would not be new state bond issues until after elections.Also, analysts at Meristem Securities remain optimistic about the performance of the market this year, stating, concerning the market outlook, that Although, it will be more bullish in the second half of the year, we continue to advocate the strategy of buying low and selling high, and thus advise investors to take position ahead of the bandwagon to gain an investment edge in 2011.Investors quest for banking stocks With investors renewed interest in stocks following the recent signing of the Asset Management Company of Nigeria (AMCON) Bill into law, but which is yet to commence operation, banking stocks have continued to dominate activities in equities market.Confidence in banking stocks has risen among both small and institutional investors who are taking positions in the shares of the banks in anticipation that the Bill will turnaround the fortunes of the financial industry.An x-ray into the trading activities on the floor of the Exchange since the commencement of business in the year showed that transactions in the banking subsector have witnessed tremendous growth when compared to what obtained prior to the AMCON Bill and growth in other subsectors in the equities market since the beginning of the year. The banking industry, it would be recalled, was the most hit in terms of price depreciation in the value of their stocks, following exposure to toxic loans which currently is estimated at N2.2 trillion.Trading in the week, despite the renewed appetite for banks shares, took a different curve after a two-day trading, with the value of market indicators plummeting under the weight of selling pressure. A turnover of 1.966 billion shares worth N18.51 billion in 33,509 deals was recorded last week, in contrast to a total of 1.297 billion shares valued at N11.16 billion, exchanged previous week in 24,011 deals.The banking subsector was the most active during the week (measured by turnover volume); with 1.45 billion shares worth N11.59 billion exchanged by investors in 19,678 deals. Volume in the banking subsector was largely driven by activity in the shares of United Bank for Africa Plc, Zenith Bank Plc, First Bank of Nigeria Plc and Wema Bank Plc. Trading in the shares of the four banks accounted for 693.08 million shares, representing 47.77 per cent and 35.24 per cent of the subsectors turnover and total volume traded during the week, respectively. Transactions in stocksActivities opened the week in the green as major highly capitalised stocks recorded price appreciation.Price gains outweighed losses as 38 companies gained compared to 25 that constituted the losers.Specifically, the All-Share Index rose by 69.97 basis points or 0.2 per cent from 26,639.35 recorded on Friday, to 26,709.32 while market capitalisation increased by N22 billion from N8, 514 trillion to N8, 536trillion.Nestle emerged the highest price gainer with five per cent to close at N453.12 per share while Nigeria Bottling Company followed with 4.99 per cent to close at N41.89 per share.7UP added 4.98 per cent to close at N45.13 while AIICO gained 4.95 per cent to close at N1.06 per share. Ikeja Hotel, Oceanic Bank, Afribank added 4.92, 4.70 and 4.67 per cent to close at N1.06, N3.12 and N2.69 pershare.Unilever added 4.49 per cent to close at N28.80 per share, while Niger insurance gained 4.49 per cent to close at N0.93 per share. On the other hand, Neimeth led others on the losers chart with 4.92 per cent to close at N1.79 per share. NCR followed with 4.90 per cent to close at N6.60 per share.RedStar Express shed 4.82 to close at N3.16 while Royal Exchange lost 3.57 per cent to close at N0.54 per share. Other losers in the days transactions included Vitafoam, Eternaoil, and Ecobank shedding 3.27, 2.78 and 2.40 per cent to close at N5.32, N4.90 and N4.06 per share respectively. Nigerian Breweries shed 2.28 per cent to close at N77.69 per share, while Intercontinental WAPC insurance lost 1.85 per cent to close at N0.53 per share.With transactions done in 3,655 deals, the banking sector maintained its dominance with 194.5million shares worth N1.7 billion followed by the insurance subsector with 8.3 million units valued at N7.1 million in 212 deals.The food/beverages &tobacco sub sector ranked third with 7.4million units worth N220million in 517 deals.In all, investors exchanged 257.1million shares worth N2.7billion in 6,924deals. Equity transactions continued on the positive territory on Tuesday as the market capitalisation of all listed equities rose in the day by N12 billion or 0.14 per cent. The rise in market indicators, however, saw price losers outweighing gainers.Further review of Tuesdays activities saw turnover also increasing marginally, from 257.1million shares worth N2.7billion traded in 6,924deals at the re-opening of the market on Monday to 295.2million units valued at N2.3billion exchanged in 6,289deals yesterday.The price movement chart showed 25 companies recording price appreciation compared to 28 that suffered depreciation. The All-Share index rose slightly by 37.72 basis points or 0.1per cent, from 26,709.32 recorded on Monday to 26,747.04 while market capitalisation increased by N12billion from N8, 536trillion to N8, 548trillion.Accounting for the bulk of transactions yesterday, the banking subsector dominated in volume terms with 233.5million shares worth N1.4billion while the insurance subsector followed with 7.9million units valued at N9.1million. The packaging subsector trailed with 7.6million units worth N22.6million.Wema Bank Plcs 77.3million shares worth N135million enhanced activities in the banking subsector followed by FinBank Plcs 35.1million units valued at N34.9million in 132deals.Similarly, transactions in the shares of Aiico Insurance and Continental Reinsurance boosted activities in the insurance subsector with 1.5million and 1.2million units worth N1.5million and N1.3million in 44 and seven deals.For the packaging subsector, Nigerian Bags Manufacturing Company Plcs 7.5million shares worth N22.4million lifted activities in the subsector in 541deals. However, the market trend changed on Wednesday after what experts believed to be the handiwork of investors taking profit, as most capitalised stocks closed as losers.Specifically, the market capitalisation of equities depreciated marginally by N10 billion or 0.12 per cent, to close at N8.538 trillion from N8.548 trillion recorded the previous day while the All-Share Index equally shed 0.12 per cent or 33.31 basis points to close at 26,713.73 index points as against 26,747.04 as its opening index.21 stocks recorded price appreciation as against 31 others that depreciated in value. Ecobank Transnational Incorporation led the percentage gainers table with 4.94 per cent to close at N17.00. Red Star Express followed with a gain of 4.43 per cent to close at N3.30 while RT Briscoe added 4.33 per cent to close at N3.13 among other gainers.On the other hand, FTN Cocoa and NRC led the losers chart with a loss of five kobo each to close at 57 kobo and N6.27 respectively. Costain West Africa followed with a loss of 4.93 per cent to close at N6.94 while Oceanic Bank shed 4.92 to close at N3.09 among other losers.The banking subsector remained the most active in terms of volume, with a turnover of 256.5 million shares valued at N1.4 billion in 4,753 deals. The sector was strengthened by the activities in the shares of Bank PHB with a turnover of 67. 6 million shares worth N132.9 million in 949 transactions.Transactions on Thursday continued on a downward note, with most highly priced stocks depreciating for the second day running leading to the twin market indicators dropping by 1.8 per cent. Market capitalisation of equities fell by a whooping N159 billion or 1.8 per cent to close at N8.379, from N8.538 trillion recorded the previous day, while the All-Share Index equally shed 496.45 basis points or 1.8 per cent to close at 26,217.28 index points as against 26,713.73 as its opening index.Price movement in the day showed that 20 stocks recorded price appreciation as against 42 others that shed value. Mobil Oil led the percentage gainers chart with a gain of five per cent to close at N7.05. Cadbury Nigeria followed with a gain of 4.98 per cent to close at N1.35 while Champion Breweries added 4.73 per cent to close at 14 kobo among other gainers.On the other hand, Scoa Motors led the losers chart with a loss of 4.96 per cent to close at 39 kobo. Nigerian Breweries followed with a loss of 4.94 per cent to close N4.00 while Jos Breweries dropped by 4.93 per cent to close at 15 kobo.Further analysis on the days trading showed that the banking subsector remained the most active in terms of volume with a turnover of 228.7 million shares, valued at N2.2 billion in 3,6878 deals.On the whole, investors created a turnover of 401 million ordinary shares valued at N5.3 billion in 6,579 deals.The market closed on Friday in the red, as market indices fell by N11 billion, from a market capitalisation of N8.379 trillion to N8.368 trillion.
Click here to read full news..
