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Three banks buoy trading activities in sub-sector for four days
March 1, 2010

BETWEEN Monday and Thursday last week, volume in the banking sub-sector was largely driven by activity in the shares of Ecobank Nigeria Plc, FinBank Plc and Zenith Bank Plc.

Trading in the shares of the three banks accounted for 272.35 million shares, representing 33.5 per cent of the sub-sector's turnover. The banking sub-sector was the most active during the week measured by turnover volume, with 813.51 million shares worth N6.5 billion exchanged by investors in 14,155 deals.

Also last week, the technical suspension on African Paints Nigeria Plc was lifted while the 471,580,000 units of unsecured variable rate redeemable convertible loan stock 2009/2014 in favour of C & I Leasing Plc were admitted on the daily official list at a price of N4.75 each.

By this action, the number of listed corporate bonds and securities increased to three and 261 respectively.

The insurance sub-sector, boosted by activity in the shares of Standard Alliance Insurance Plc and Universal Insurance Company Plc, followed on the week's activity chart with a turnover of 230.03 million shares valued at N177.03 million in 2,056 deals.

The stock market opened for four days as Friday was declared public holiday in commemoration of Id-el-maulud. There were no transactions in the Federal Government Development Stocks and Industrial Loans/Preference Stocks sectors.

Meanwhile, the Over-The-Counter (OTC) bond market a turnover of 308.04 million units worth N378.2 billion in 4,297 deals. The development is in contrast to a total of 368.82 million units valued at N433.3 billion exchanged in 5,388 deals during the week ended Thursday, February 18, 2010.

The most active bond measured by turnover volume was the 4th Federal Government of Nigeria (FGN) Bond 2014 Series 11 with a traded volume of 40.15 million units valued at N48.3 billion in 764 deals. This was followed by the 6th FGN Bond 2029 Series 3 with a traded volume of 33.7 million units valued at N48.5 billion in 319 deals.

Nineteen of the available 38 FGN bonds were traded during the week, compared to 17 in the preceding week.

Also, a turnover of 1.5 billion shares worth N9.83 billion in 27,756 deals was recorded last week, compared to a total of 1.73 billion shares valued at N10.84 billion exchanged the previous week in 34,256 deals. This included a total of 1,000 units of Lagos State fixed rate redeemable bond.

On the price movement chart, the Nigerian Stock Exchange (NSE) All-Share Index depreciated by 0.8 per cent to close on Thursday at 22,985.00. The market capitalisation of the 199 First -Tier equities closed lower at N5.53 trillion.

Also, the NSE-30 Index depreciated by 0.56 per cent to close at 919.77. Two of the four sectoral indices appreciated - the NSE Food/Beverages Index appreciated by 1.6 per cent to close at 618.60 while the NSE Oil/Gas Index appreciated by 4.63 per cent to close at 309.59.

However, the NSE Banking Index depreciated by 0.91 per cent to close at 380.84 while the NSE Insurance Index depreciated by 3.9 per cent to close at 200.79.

Thirty-four stocks appreciated in price during the week, lower than the 47 of the preceding week. African Petroleum Plc led on the gainers' table with a gain of N7.96 to close at N47.46 per share while Chemical and Allied Products Plc followed with N3.96 to close at N29.74 per share.

Other price gainers in the 70 stocks depreciated in price during the week, higher than the 50 of the preceding week.

Nigerian Breweries Plc led on the price losers' table, dropping by N3.00 to close at N57.00 per share while BOC Gases Plc followed with a loss of N1.11 to close at N10.39 per share.

Also last week, Vice-Chairman of the Association of Stock Broking Houses of Nigeria (ASHON), Mr. Emeka Madubuike, said to adequately reap the benefit of the capital market, investors should desist from expecting short-term returns.

Madubuike, who described the capital market as a long-term market place, said many people who played in the market in the last two or three years, thought from a short-term point of view.

He advised investors to demonstrate enough skills coupled with patience in order to reap and not just speculate.

Madubuike said: "People must know that when they come to the capital market, they mobilise long term savings. Immediately you get into over-speculation, there is bound to be a problem".

Making reference to the margin loan crisis, he said when implementing major economic policy, there is a need to look at the intended and unintended consequences.

"The banks at a time, had so much money around and they practically didn't have good option concerning where to invest, so, everybody focused on the capital market and when the bubble burst, everybody was down.

From the point of view of operators, what it means is that we need to build capacity and understand the products we are getting involved in and not just the euphoria of going to borrow money without really knowing all the risk that are involved and your exit options."

 

The Guardian 1st March 2010.

 

 

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