January 11, 2008 629 VIEWS

The stock market made an impressive start in 2007 up till the half year ended June 30. In the first quarter of the year, the market recorded an aggregate return of 31 percent. It improved substantially on this feat in the second quarter ended June 30 by returning about 55 percent.


Market performance benchmark indicators


The Nigerian Stock Exchange All-Share Index and the Total Market Capitalisation of listed equities inched up to 51,330.46 points and N7.818 trillion respectively compared to 33,163.94 points and N4.223 trillion recorded as at January 4, 2007 representing increase of 54.8 per cent and 85.1 percent respectively when compared to their values at the beginning of the first quarter.


This feat was partly accounted for by new equities listed and additional shares issued by existing quoted companies via primary market activities, as well as the bullish trend during this period as most equities recorded new All-time Highs to the surprise and delight of investors. Other factors attributable to this include the high liquidity level in the system and the declaration of exceptional benefits that greeted excellent corporate results released by most companies.


However, soon after the bulls’ season that lasted till June or July thereabout, the bears laid siege and took over the control of market ; a phenomenon which some experts have termed ‘market correction’.


This created a prolonged lull, though with some periodic rebounds, till the end of the year. Despite this lull, majority of the equities performed impressively well. Stocks like Afroil, Nascon, Cap Oil, Costain, and IPWA recorded capital appreciation in excess of 1000 times while equities like AfriPaint, Niwicable, PlatinumHabib Bank (Bank PHB), Chellarams, Japauloil, C & I Leasing, Mutual Benefit Assurance returned over 500% to investors.


Others that returned over a 100% during 2007 trading year includes Fidelity Bank, Eternaoil, Guinea Insurance, Transexpr, Cornerstone, Betaglass, Lasaco, Capalbeto, Wemabank, Afprint, FCMB. (Please see table in the report http://www.proshareng.com/blog/?attachment_id=332  for a comprehensive list).


Ashakacem, Total, ETI, Dunlop and Transcorp recorded dip in prices i.e. Capital Loss. A total of 93 stocks returned higher than the 74.7% appreciation which represents the aggregate market returns for the whole year. It must be stressed that extraordinarily high returns witnessed in some stocks can be attributed to share reconstruction embarked upon by some of these companies.


For instance, NASCON‘s share price was re-valued upwards when Dangote Group took over 90% stake in it. Also ETI did a share reconstruction which reduced its share price by 50% and doubled its issued shares (the exact opposite of the exercise Access Bank did in

October 2006 which saw its share price up to N5.98).


The tables (http://www.proshareng.com/blog/?attachment_id=332) reveal the share performance of quoted companies in 2007 in term of capital appreciation/capital loss and their ranking based on market value (capitalisation) on the Nigeria Stock Exchange as at December 31, 2007.


Compilation and Analysis by Meristem Research



Meristem Securities Limited market analysis & reports and its attendant recommendations are prepared based on publicly available information and are meant for general informative purposes. Meristem Securities Limited can neither guarantee the accuracy or completeness of the information as they are an expression of our analysts’ views and opinions. Meristem Securities Limited and Proshare (publishers of their report on this site) cannot be held responsible for any loss suffered by relying on the said information as this information as earlier stated is based on estimates and opinions and is meant for general information purposes and not as solicitation to buy securities and financial instruments.

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