Nigerian Bank Nigeria Afribank Nigeria Plc – Profit Takers In Doldrums As Most Stock Prices Remain Below Year start level

Source businessdayonline.com: Iheanyi Nwachukwu, 7 january 2010

Every year, there are actually many kinds of investors approaching the Nigerian capital market for business. Some come as long-term investors, while others come as short-term investors, who most times watch the trend of stocks prices driven by the forces of demand and supply, and then take their profit, or most times pull out.

Not a few capital market watchers can comfortably recall how the market started the year 2009, in an unpleasant note driven by the full impact of the global financial crisis. This was compounded by the effect of the Central Bank of Nigeria (CBN), led reform in the banking sector, which its stocks constitute a quantum of daily trading volume and shares on the floors of the Nigerian Stock Exchange (NSE).

The year 2009, was, no doubt, easy for profit takers going by the fact that most company’s share prices failed to redound to the level at which it started the year. Most especially, profit takers could not have their way in bailed out banks whose prices were at a relatively high level at the beginning of year, compare with the level they are today. Also, profit takers in the insurance companies found themselves wallowing in ‘no-go’ territory, as almost all the companies share prices remained lower than year 2009 start level.

There is no doubt saying the Nigerian capital market is the one that would be remembered not just for the year 2009, but also for a long time to come. This meaning that the lessons learnt would remain ineffaceable. It was much of a twist when the market continued on a downward trend till the later part of last year, disproving investment analysts’ prediction that the market would rebound and gain at least half of what it had lost in 2008 and early 2009.

Though the CBN governor, Sanusi Lamido Sanusi-led reform in the banking sector caught up with the predicted market rebound. Some stocks that failed to rebound in terms of price to their year 2009 start level as captured as at January 4, 2010 include AfriBank plc, Diamond Bank plc, Ecobank Nigeria plc, Fidelity Bank plc, First Bank of Nigeria plc, Finbank plc, Intercontinental Bank plc, Oceanic bank plc, Bank PHB plc, Skye Bank plc, Spring Bank plc, Stanbic IBTC plc, Sterling Bank plc, UBA plc, Union Bank plc, Unity Bank plc, Wema Bank plc, and Zenith Bank plc.

The situation is not different in the insurance sub-sector as every ‘short- term’ investor recorded losses with the quoted insurance companies’ share prices remaining lower than the level they started in the beginning of the year 2009. For the breweries sub-sector, International Breweries and Jos International Breweries made the list of stock prices that failed to rebound. The petroleum sub-sector was not left out with African Petroleum plc stock leading the list of stocks under the said category. Others include Chevron Oil Nigeria plc, Conoil plc, Mobil Oil Nigeria plc, and Total Nigeria plc.

Looking at the conglomerates, AG Leventis Nigeria plc, Chellarams plc, John Holt plc, PZ Cusson Nigeria plc, Transcorp plc stocks failed to rebound to the level they were at the beginning of last year. For the food and beverages sub-sector, investors in 7up Bottling Company plc, Big Treat plc, Cadbury Nigeria plc, Dangote Flour Mills plc, Dangote Sugar Refineries plc, National Salt Company plc, Nigerian Bottling Company plc, Tantalizers plc, and UAC Nigeria plc.

Nigerian Bank Nigeria Afribank Nigeria Plc, Bank PHB Plc, Diamond Bank Plc, Ecobank Nigeria Plc, Fidelity Bank Plc, Finbank Plc, First Bank of Nigeria Plc, Intercontinental Bank Plc, Oceanic Bank International Plc, Skye Bank Plc, Spring Bank Plc, Stanbic IBTC plc, Sterling Bank plc, UBA plc, Union Bank plc, Unity Bank Plc, Wema Bank Plc, Zenith Bank Plc