Future bright for insurance stocks

Insurance
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October 26, 2005/Source The Punch


 

The Nigerian Stock Exchange has said the future is bright for quoted insurance companies following the recent recapitalisation policy introduced by the National Insurance Commission.


NSE, which stated this in its September monthly report, obtained by our correspondent on Thursday, said that the recapitalisation policy would consolidate the industry and bring about many merits in terms of sanitizing the industry.


The exchange explained that among the companies that would eventually survive, it would become easy for the insuring public to identify and isolate those with unprofessional conduct.


“As happened in the case of banks, the policy will favour the quoted insurance companies that can easily utilise the facilities of the stock market to meet the minimum capitalization requirement. The more the efficient and well-capitalised companies can therefore, be expected to improve market share, operating results and rates of return in the post consolidation insurance industry,” NSE said.


It added that the insurance companies that moved decisively to recapitalise would create for themselves the opportunity to increase business volume and profit. Apparently in anticipation of the expected boost in the insurance industry, some investors have been acquiring the stocks in large quantity in the last weeks.


It closed as the second most active on Tuesday and Wednesday behind the banking sub-sector.

Meanwhile, the top 10 most active stocks in the market in September were in banking sub-sector. IMB International Bank Plc closed as the most active with 712million shares. EIB International Bank followed with 482million, while Intercontinental Bank Plc, Access Bank Plc and Afribank Nigeria Plc traded 419million shares, 314million shares and q199million shares respectively.

Other top 10 stocks included: Benue Cement Company Plc (181million shares), Investment Banking& Trust Company Plc (176million shares), United Bank for Africa Plc (133million shares), First Bank of Nigeria Plc (117million shares) and Oceanic Bank International Bank Plc (116million shares).

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