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200710: FBN, Diamond, BankPHB release quarterly results; Afribank leads gainers

Category: Daily & Weekly Market Updates


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200710: FBN, Diamond, BankPHB release quarterly results; Afribank leads gainers


Transactions on the Nigerian Stock Exchange at the close of trading session returned to positive outlook as against the bearish trend recorded at the close of trading session yesterday which consequently led to depletion in market capitalisation by N19.688 billion (US$131.518 million).


Meanwhile, while market value which serves as indicators for cash votes on the bourse inched up (higher than growth recorded yesterday), transaction volume shrank further, a repeat of volume trend in the previous trading day.


The positive outlook recorded could most probably be attributed to the success story on the long awaited Asset Management Company of Nigeria (AMCON) which was signed into law by the President before the close of work yesterday (http://www.proshareng.com/news/singleNews.php?id=11434). This brought to an end the divergent views on whether AMC bill will become a reality or not.


According to the President, AMCON will help to stimulate the recovery of the financial system and ultimately the wider economy through among others, providing liquidity to the banks by buying their non-performing loans, recapitalizing the intervened banks, increasing access to refinancing opportunities for borrowers, increasing confidence in banks’ balance sheets and therefore Nigeria’s credit and risk ratings, encourage a return of confidence to the capital market and preventing continued job losses in the banking industry.


If the positions expressed above are pursued and actualised, the long awaited good old days in all the segment of finance industry and the entire economy at large are here. This is expected to reduce the tension in the system to the barest minimum as banks with shaky going concern can now get respite via the AMCON.


The positive impact was felt much more in the banking sector which posted thirteen gainers to four losers at the close of trading session. Price movements in the sector showed that all the rescued banks recorded price upswings of different magnitude. The fact that all the banks in this category must have shed the most considerable price weight following the crisis of confidence that rocked the system would now make them more attractive to discerning investors, most especially for capital appreciations.


Moreover, coupled with this development is the moves by the Central Bank of Nigeria (CBN) to promote dialogue with regards   to the rescued bank in the country, the step expected to have positive effect in a way in the sector since the tension that has trailed the issue thus far may subside, even with readiness of CBN to handover recapitalisation of these banks in the hands of the shareholders.


Meanwhile, while investors exhilarate on the euphoria of the success story of the Asset Management Company Bills, as we have been saying in many of our reports, we hereby reiterate that investors should not forget that AMCON is not the cure for all the crisis in the finance sector. For further insight, follow the link (http://proshareng.com/blog/?p=383)


First Bank Nigeria Plc followed United Bank of Africa Plc with the release of its second quarter result for the period ended 30th June, 2010. The bank’s results showed a bogus growth in profitability with a profit after tax of N25.349 billion compared with N3.438 billion recorded in the preceding year comparable period. With the result, the Earnings Per Share (EPS) jumped to N1.75. The bank’s share price however dipped marginally by -1.74%.


In the same vein, Diamond Bank Plc released its second quarter result for the period ended 30th June, 2010, being the third bank to do so. Comparing the figures with the comparable preceding period, gross earnings declined by -21.62% to close at N46.125 billion, while profitability improved significantly by +155.15% to close at N4.585 billion as against loss by N8.248 billion. The bank’s Earnings per Share (EPS) grew to N0.32 from N0.11 it was as at 31st March, 2010 and –N0.57 it was in the second quarter of the preceding year.


Platinum Bank Plc also released its first quarter results for the period ended 31st March, 2010. While gross earnings dipped by -53.67% to close at N19.834 billion, Profit after tax rose significantly by +113.11% to close at N2.747 billion from N1.289 billion recorded in the preceding comparable period. The Earning Per share (EPS) now at N0.14.


As usual, banking sector led the market transaction volume today with 147.001 million units valued at N1.66 billion (US$7.789 million) exchanged in 3,697 deals. Transactions in the shares of Zenith Bank Plc, Access Bank Plc, First Bank Nigeria Plc and Platinum Bank Plc boosted the volume traded in the sector. The total volume of 66.183 million units valued at N608.782 million traded in the shares of the four banks accounted for 45.02% of the entire sector volume and their value represented 52.20% of the sector’s value.


The number of gainers at the close of trading session inched up to thirty four (34) compared with twenty five (25) gainers recorded yesterday, while decliners closed lower at nineteen (19) compared with thirty five (35) losers recorded in the last trading day. Market closed with 1.79:1 advancers to decliners’ ratio.


At the close of trading session, the All-Share Index inched up marginally by +0.08% to close at 24,784.85 as against depreciation by -0.32% recorded on Monday to close at 24,766.14. Market capitalisation also appreciated by N4.575 billion (US$30.563 million) to close at N6.062 trillion (US$40.493 billion) as against depreciation by N19.688 billion (US$131.518 million) recorded on Monday to close at N6.057 trillion (US$40.463 billion)


SECTORAL REVIEW

Transactions in the Agriculture sector closed with one gainer to a loser compared with all the price changes recorded yesterday being in the negative.


Positive outlook resurfaced in the Air Service sector at the close of trading session as the share price of Nahco Aviance Plc turned northward.


There was significant improvement in the banking sector as bears’ hold in the sector waned considerably at the close of trading. Transactions closed in the sector closed with thirteen gainers to four losers compared with thirteen losers to five gainers recorded yesterday. This positive performance is on the back of AMCON bill signed into law.


The bulls influence remained on the high side in the Breweries sector as the transactions for the day closed with two gainers compared with two gainers to a loser recorded yesterday.


There was improvement in the building materials sector performance at close of trading as the transactions in the sector closed with two gainers compared with two gainers to a loser recorded yesterday.


Performance of stocks in the Conglomerate sector at the close of trading session posted an encouraging outlook as the transactions in the sector closed with all the price changes being in the positive, a repeat of yesterday’s trend.   


The performance of shares in the Construction sector remained at low ebb as transactions in the sector closed with a massive loser recorded compared with all the prices remained at their previous closed prices yesterday.


The number of gainers in the Food & Beverages sector decline to four compared with eight gainers recorded yesterday while the number of losers also declined to one compared with four losers recorded yesterday. Stocks in the sector also present buy opportunities for discerning investors.


The rate of volatility remains high in the insurance sector; transactions in the sector closed with two gainers to three losers compared with seven losers to two gainers recorded yesterday.


Petroleum marketing sector performance closed with two losers compared with a marginal decliner recorded yesterday.


The total transaction volume at the close of market session today decreased by -22.62% to close at 268.412 million units exchanged in 6,914 deals compared with volume decline by -21.26% recorded yesterday to close at 346.877 million units exchanged in 5,242 deals.


However, market value inched up by +18.45% to close at N2.351 billion (US$15.709 million) compared with +1.56% value growth recorded at the close of trading session yesterday to close at N1.985 billion (US$13.263 million). Afribank Plc topped the gainers chart for the day with price appreciation by +5%. However, Costain West Africa Plc topped the losers chart for the day with - 5% price depreciations.





The total volume traded in the shares of top five trades at the close of trading session stood at 81.269 million units valued at N616.245 million (US$4.117 million) exchanged in 1,651 deals. The volume and value of the top five trades for the day accounted for 30.28% and 26.20% of the market volume and value in that other.
 








research@proshareng.com, 00234-1-7624131, July 20, 2010; 1555hrs   



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