Rise in prices of sharesThe northward movement in the prices of shares on the Nigerian Stock Exchange (NSE), beginning from the first trading day in the year appears to be the needed leverage all investors in the market would want to rely on for investment decision. Although, there has been a drawback in prices for a day or two, but the cumulative figures of trading activities in the stock market since January 4 may have lent credence to market watchers permutation that the equities market is on its way to recovery.The daily recording of price appreciation by blue-chip companies considered in investment parlance as what investors need to take a second look at.The removal of the clog in the wheel of progress of the movement of share prices in the market can be traced to the commencement of operations of the Asset Management Company of Nigeria (AMCON).The scheme seems to have brought succour to the market through its buying of the over two trillion naira toxic assets of banks listed in the market and this is rubbing on other stocks.The lifting of the burden of debts on the banks whose capitalisation accounted for almost 34.2 per cent or N2.9 trillion at December, last year, coupled with the negative debt balance shift all of them were expected to reel out in the year, caused investors to swoop on the shares of banks.A peep into last year review of the market shows that 14 banks along side other eight companies made the 20 most traded stocks list in the market and this accounted for 62 per cent of total trade in volume terms in the market for 2010. What AMCON didIn its determination to soak up all bad debts in the banking industry, AMCON said recently that it had concluded arrangements to issue an additional N500 billion ($3.3 billion) in zero-coupon bonds.AMCON said the bad loans would all be mopped up by March 31, 2011.The Chief Executive, Mr Mustapha Chike-Obi said AMCON had issued three-year zero-coupon bonds valued at N1.03 trillion in favour of the ailing banks, and this commenced in December, last year, in exchange for non-performing loans, discounted at a total of N770 billion.The company said that margin loans granted to stock market investment accounted for about 40 per cent of the total non-performing loan purchase.Chike-Obi said, We are going to clear up everything by March 31, and at that point, we would have issued proper bonds, fully tradable.Chike-Obi, who listed assets to be taken over from the banks, stated that they would be priced at 60 per cent of market value on a 60-day price average on the NSE trading platform, counting back from November 15.The Director General of Securities and Exchange Commission (SEC), Arunma Oteh, while commenting on the AMCONs operations recently, said the impact of the company at taking over the banks non performing loans, would go a long way in impacting positively on the capital market.AMCON is buying up an estimated N2.2 trillion worth of banks toxic assets, which was commenced with a meeting and signing of debt purchase agreement with 21 banks, where it announced the issuance of three- year coupon, Initial Consideration Bonds (ICBs) of N1.036 trillion.AMCON Chairman, Alhaji Aliyu Kola Belgore, said the bonds would be due by December 31, 2013, with a yield of 10.125 per cent, adding that it would go a long way in resolving the crisis in the banking industry.Second look at the AMCON scheme The rate at which prices of stocks have been rising in the market, especially among stocks not listed in the banking subsector, has continued to be worrisome to some investment analysts.Some unsuspecting investors have failed to understand that most of the companies AMCON injected money into were bought at a premium, and this are closely being guided among dealing members in the market.Investors Guides check shows that the present rise in prices of stocks are artificial in nature as they are only pursuing the premium price placed on the stocks by AMCON.Further check revealed that only a handful of dealing members in the stock market has the price list of AMCON and they are using this in their wisdom to drive prices in the market.A senior member of the operators who spoke under condition of anonymity, informed that with the way some prices of blue-chip stocks are skyrocketing, following the AMCON scheme, most of them may exit the market in the next five years. Specifically, the broker who said the premium prices placed on Nestle Nigeria Plc and 7-UP Bottling Company were N600.00 and N62.00 respectively, while their market prices as at Wednesday was N385.00 and N39.00 respectively.He said for the sake of transparency and market development, investors should not be left in the dark as to the figure of the premium prices AMCON is buying those shares in the market.He noted that those AMCON prices should be made public, as this would guide against any form of manipulation in transaction by any dealing members in the market.What investors need to do while approaching the market While it is germane for everybody to be investment circumspect, owning to the short and long-term plausible aspect of it, the need not to approach the equities market without informed decision is necessary for increased return on investment.The shadow of what investors suffered as aftermaths of the economic meltdown in prices of stocks after the global financial contraption between 2008 and 2009 is still feasible in the stock market.Investors who want to come to the market must not just jump at investing in the market, they should seek expert advice (stockbrokers or investment advisers) to buy into any company in the market, failure to do that will amount to engaging in unfruitful investment drive that culminated into the near crash of the market beginning from the first quarter of 2008.Transaction in the market Activities at the resumption of trading on the NSE, on Monday, began on a downward note, even as major blue-chip stocks joined the list of the losers, causing the market value to dip further by N94 billion.At the close of transaction in the day, corporate performance indices or the All-Share Index of the Exchange fell by 171.22 basis point or 0.6 per cent from 26.169.86 recorded on penultimate Friday to 25,998.64, while market capitalisation depreciated by N94 billion or 1.12 per cent from N8.360 trillion to N8.306 trillion.Analysis of transactions showed that Nigerian Bottling Company Plc topped the days gainers table with 5.00 per cent while UACN Plc followed with 2.67 per cent.Unilever Plc, UPL Plc and Cement Company of Northern Nigeria Plc appreciated by 1.68 per cent, 3.81 per cent and 1.70 per cent.On the other hand, Total Nigeria Plc led others on the losers table with 3.76 per cent. Nigerian Breweries Plc followed with 3.61 per cent depreciation.Skye Bank Plc, Oando Plc and Access Bank Plc went down by 4.92 per cent, 0.66 per cent and 3.85 per cent respectively. The banking subsector remains the most active stock with 483.7 million shares valued at N4.98 billion. The insurance featured with 218.8 million units worth N122.9 million while the Food/ Beverage sub-sector trailed with 73.7 million units worth N188.0 million.Trading on Tuesday closed in the upbeat as blue-chip stocks recorded price appreciation, causing market capitalisation to appreciate by N44 billion.Also, volume of shares increased significantly from 457.5 million shares worth N3.6 billion exchanged on Monday to 865 million units valued at N6.2 billion.At the closed of trading in the day, corporate performance indices, the All-Share Index of the Exchange rose by 138.8 basis point or 0.53 per cent from 25,998.64 recorded on Monday to 26,137.45 while market capitalisation increased by N44 billion or 0.52 from N8,306 trillion to N8,350 trillion.On the activity chart, the banking subsector remained the most active stocks in volume terms with 483.6 million shares worth N4.9 million in 4,319 deals while the insurance subsector trailed with 218.7 million units valued at N122.9 million in 261deals. The food/beverages and tobacco subsector ranked third with73.7 million shares valued at N43.9 million in 541 deals.Trading in the shares of Zenith Bank enhanced activities in the banking subsector with 242.5 million shares worth N3.8 million followed by Finbank which traded 53.9 million units worth N4.5 million.The insurance subsector was buoyed by activities in the shares of African Alliance insurance with 200 million shares worth N100 million while Custodian and Allied Insurance followed with 3.4 million units worth N10.6 million.Dangote Flourmills topped the days gainers chart with 69 kobo to close at N17.70 per share while WAPCO followed with 59 kobo to close at N1.44 per share.Flourmill gained 50 kobo to close at N72.00 per share while First Bank added 41 kobo to close at N15.02 per share.National Salt Company of Nigeria, Guaranty Trust Bank, Vono garnered 29 kobo,30 kobo and 17 kobo to close at N6.22,N19.00 and N3.67 per share respectively.On the other hand, UACN led others on the losers chart with 120 kobo to close at N38.02 per share while Cadbury followed with 115 kobo to close at N27.85 per share.Investors on Thursday further heaved a sigh of relief with transaction sustaining a bullish run while most blue-chip stocks closed in the green, causing both market performance indices to appreciate by 1.42 per cent.The market capitalisation of equities rose from N8.350 trillion to N8.471 trillion, representing an increase of N121 billion or 1.42 per cent while the All-Share Index of the exchange equally appreciated by 1.42 per cent or 377.7 basis points to close at 26,515.15 index points.The banking subsector remained the most active stocks in volume terms with 492.8 million shares worth N4.7 million in 4,910 deals while the insurance subsector trailed with 27.8 million units valued at N23.8 million in 418 deals.Conglomerates subsector ranked third with a turnover of 11.9 million shares valued at N59.5million in 281 deals.Trading in the shares of Zenith Bank enhanced activities in the banking subsector with 168.3 million shares worth N2.7billion in 533 transactions followed by Diamond Bank which traded 37.7 million units worth N324.2 million in 198 deals.The insurance subsector was buoyed by activities in the shares of Standard Alliance Insurance with 10.04 million shares worth N5.02 million in six deals while AIICO Insurance followed with 6.5 million units worth N6.04 million in 267 transactions.On the whole, investors exchanged a turnover of 586.4 million shares worth N5.4 billion in 7,995 deals.Total Nigeria topped the days gainers chart with N8.79 to close at N234 per share. Nigerian Breweries followed with a gain of N3.94 to close at N82.94 per share while Ashaka Cement added N1.37 to close at N28.92.On the other hand, Presco led others on the losers chart with 35 kobo to close at N6.65 per share, while Okomuoil followed with a loss of 20 kobo to close at N14.60 per share, among other losers.Transaction on Thursday maintained its dominance as major blue-chip stocks continued to enjoy price appreciation, just as market capitalisation soared significantly by N159 billion.A review of price movement showed that 52 stocks appreciated in price compared to 23 that suffered price depreciation, the All-Share Index rose by 499.04 basis point to 1.8 per cent, from 26,515.15 to 27,014.19, while market capitalisation increased by N159 billion or 1.8 per cent, from N8, 471trillion to N8, 630 trillion.Specifically, Evans Medical led others on the gainers on the percentage change chart with five per cent to close at N1.05 per share. Following Evans was Japaul Oil with five per cent to close at N1.68 per share.Nigerian Breweries added 4.99 per cent to close at N87.08 per share while Presco gained 4.96 per cent to close at N6.98 per share.Intercontinental Bank, May & Baker, ABC Transport garnered 4.96,494 and 4.92 per cent to close at N2.75, N4.25 and N0.64 per share.Custodian & Allied gained 4.92 per cent to close at N3.20 per share while Oceanic Bank and RedStar Express added 4.75 and 4.75 per cent respectively to close at N3.31 and N3.09 per share.However, AG Leventis topped the losers table with 4.96 per cent to close at N2.30 per share while Vono featured with 4.87 per cent to close at N3.32 per share.Other losers of trading included FTN Cocoa, Neimeth, Starcomms, shedding 4.84 per cent, 4.81per cent and 4.76 per cent to close at N0.59,N0.99 and N1.40 per share.C&I Leasing shed 4.55 per cent to close at N1.47 per share while NAMPAK lost 4.23 per cent to close at N3.85 per share.The banking sub-sector remains the most active stock in volume terms with 411.5million shares worth N3.8 billion in 5,336 deals. The insurance subsector trailed with 31 million units valued N23.4 million in 322 deals.The banking sub-sector was strengthened by activities in the shares of Zenith Bank with 90.8 million shares N1.4 billion in 662deals while First Bank followed with 39.3 million units valued at N613 million in 1,012 deals.Trading in the shares of Universal Insurance enhanced activities in the insurance sub-sector with 7.3 million shares worth N3.6 million while NEM Insurance followed with 4.9 million units worth N2.8 million.The market closed the week on Friday on a high note as the market capitalisation appreciated by N81 billion while the index rose by 252.98 points to close the week at an increase of N8.711 trillion and 27,267.17 points respectively.A further review of transactions last week showed that showed that Nestlle Nigeria Plc led the gainers chart with +4.93 per cent. Nigerian Breweries, Oando Plc, Flourmills Nigeria Plc and Dangote Cement Plc followed closely with +10.2, +8.2, +6.3 and +4.62 per cent, while Cadbury Nigeria plc, John Holt, Skye Bank, International Breweries Plc and C& L Leasing Plc led the pack of the five top most stocks which depreciated. They fell by -6.72, -5.0, -3.64, -5.0 and -14.63 respectively.
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