Nigerian Bank Nigeria Access Bank – AP Records 30% Gains In February Standard Alliance Sheds 25%

Source allAfrrica: Kingsley Ighomwenghian, 3 March 2010

Helped by its 796 kobo gain at the end of last week, in addition to the 150 kobo notch, a fortnight ago, petroleum products marketing giant, African Petroleum, at the weekend, posted the juiciest returns on investment for the month of February.

According to analysts at TWR Stockbrokers Limited, AP accumulated N11.06 or 30.38 per cent gain, and was the only stock on the list from its sub-sector, followed by packager, Nigerian Bags Manufacturing Company and FTN Cocoa Processor.

The month’s biggest decliner was Standard Alliance Insurance, which dropped 25.37 per cent; ahead of the 19.57 per cent slide suffered by sub-sector peer, Niger Insurance.

A breakdown of the table showed that banking sub-sector operators appeared the most with 12 on the gainers’ side, followed from afar by three in the insurance, foods and beverages, building material. The laggards’ side was dominated by the insurance sub-sector with eight, followed by seven banks and four in the food/beverages sub-sector.

According to one senior stockbroker who craved for anonymity, the growth in the share price of AP in February is the result of better valuation by the market, leading to some form of correction, after the plunge in the company’s share price resulting from what has become the AP saga. This correction, he believes, has also come with a tinge of speculation by returns hungry investors, who agree with the thinking that the stock, as it is today, is undervalued.

The growth in the share price is the biggest since the company alleged share price manipulation against Aliko Dangote, President, Dangote Group, who currently holds a similar position on the council of the Nigerian Stock Exchange.

The management of AP had early last year complained about the manipulation of its share price on the NSE to the Securities & Exchange Commission (SEC). The company argued that between February 11 and March 20, 2009, its share price cascaded from N216.13 (which was the opening price on February 11), to N54.18, representing a decline of about N161.95 or 74.93 per cent.

In a two-paged advertorial in some national dailies entitled: “The unethical manipulation of AP shares leading to a decline in value by Nova Finance and Securities and Alhaji Aliko Dangote,” the management of AP alerted the public about the unwholesome and unethical crossing of its shares with the aim of eroding the value over time.

“To our great disappointment as a company, our investigations have revealed that Messrs Nova Finance and Securities Limited, acting under the instruction of and with the active connivance of Alhaji Aliko Dangote, President and Chief Executive Officer of Dangote Group, has been primarily responsible for the steep decline in the value of AP Plc on the floor of the Nigerian Stock Exchange,” the company complained.

Nova Finance & Securities Limited, in league with Eugene Anenih, its managing director and chief executive, was said to have perpetrated the fraud on the mandate of Dangote. At the meeting convened by the SEC to hear the complainants however, Anenih was said to have recanted, insisting instead that he traded on AP shares based on the mandate by some unnamed clients.

Other Gainers and Laggards

Bagco closed 23.16 per cent better at the end of the month; just as FTN Cocoa Processor notched 20.83 per cent; ahead of the 16.09 per cent rise in the share price of Flour Mills of Nigeria. Unity Bank gained 15 per cent; Diamond Bank, 11.31 per cent; Unic Insurance, 10.81 per cent; Access Bank grabbed 10.57 per cent; Ashaka Cement, 9.68 per cent; while Aiico Insurance completed the top 10 league with its 9.57 per cent rise.

It is however instructive to note that only those banks that only those banks that scaled through the Central Bank of Nigeria audit closed in positive territories during the month of February, as investors take position ahead of the release of bank’s audited results for the full year ended December 31, 2009. The banks, on the directive of the CBN, have adopted a uniform year end from last year.

Nigerian Bank Nigeria Access Bank, Nigerian Stock Exchange, Unity Bank Plc