Investors Guide

•As investors loss hit N1tr
With the recorded investors loss at over N1 trillion, due to the continued dominance of the bears on the Nigerian Stock Exchange, (NSE), some operators have noted that the market still presented an opportunity for long-term gains, especially for investors who put their money in stocks with good fundamentals.

AFRICAN Petroleum Plc (AP) listed under the Petroleum (Marketing) subsector of the Nigerian Stock Exchange (NSE), Guinness Nigeria Plc (Guinness) listed under the Breweries subsector and Nigerian Bottling Company Plc (NBC) listed under the Food/Beverages & Tobacco subsector emerged the most capitalized stocks by Naira votes at the end of the week.

AP recorded a gain of N4.77. It opened trading at N22.25 and closed at N27.02. Guinness followed with a gain of N2.00; it opened trading at N165.00 and closed at N167.00, and NBC gained N1.86, it opened at N36.80 and closed at N38.56.

Monday 23
Market loses N32bn
The indicators measuring corporate performance on the Nigerian Stock Exchange (NSE), the All Share Index (ASI) and the market capitalization shed 0.52 per cent by the close of trading. The ASI opened at 25,106.86 but closed at 24,976.65 thus losing 130.21 basis points, the market capitalization opened at N6.14 trillion but closed at N6.11 trillion, losing N32billion.
Northern Nigeria Flour Mills Plc and African Petroleum Plc add 5 per cent or N2.14, N1.05 to their share prices to top the gainers' table; they opened at N42.84, N21.20 and closed at n44.98, N22.25.

THEY exist with different fanciful names. Most times, key words in their names aim at engendering the trust of the investing public especially as far as their investment focus is concerned.
We are talking about Unit Trust Funds. They aim to pool financial resources like insurance companies do but unlike insurance companies, not to lift any risk from the shoulders of the person parting with his money. No, they pool resources, many times in trickles, to form a large sum which is then invested by a professional fund manager, sometimes with guarantee of minimum return.

Monday 16
Market rebounds
Signs of positive trading emerged as the two corporate indicators of the Nigerian stock Exchange (NSE), the All Share Index (ASI) and the market capitalization gained by 0.69 per cent. The ASI opened at 24,984.80 basis points and closed at 25,156.46 basis points adding 171.66 basis points. The market capitalization added N42 billion, it opened at N6.11 trillion and closed at N6.15 billion.
The market volume turnover closed at 263.1 million shares worth N2.32 billion in 5,819 deals. Volume was driven by the Banking subsector with 179 million shares. FinBank Plc led with 32.2 million shares.

NESTLE Nigeria Plc (Nestle) listed under the Food/Beverages & Tobacco subsector of the Nigerian Stock Exchange (NSE), African Petroleum Plc (AP) listed under the Petroleum (Marketing) subsector and LafargeWAPCO Plc (WAPCO) listed under the Building Materials under subsector emerged the most capitalized by Naira votes at the end of the week.
Nestle recorded a gain of N2.00. It opened trading at N369.00 and closed at N371.00. AP followed with a gain of N1.99; it opened trading at N27.00 and closed at N28.99, and WAPCO gained N1.57, it opened at N38.42 and closed at N39.99.

Monday 09
NNFM leads market
Investors' interest in the shares of the Northern Nigeria Flour Mills Plc (NNFM) pushed its market value up by 5 per cent or N1.67, it opened at N33.58 and closed at N35.25 to top the gainers' table. It was followed by Guinness Nigeria Plc with a gain of 0.9 per cent or N1.56, it opened at N164.94 but closed at N166.50.

Julius Berger Nigeria Plc led the losers with a loss of 5 per cent or N2.73, it opened at N55.01 but closed at N52.28. Nigerian Breweries followed with a loss of 1.4 per cent or N1.05, it opened at N75.05 but closed at N74.00.

OF course, the heading of this article is not referring to James Bond, the popular fiction detective  who has a unique way with gadgets and women. The reference is to corporate bonds, government bonds and all other debt instruments of what ever name trade able in an average stock exchange.

In today's Nigerian stock market, bond is it. For investors, especially fund managers that are expected to deliver minimum returns in spite of the state of the market, today's weak market has limited attraction. The average yield is down because dividends are just trickling in even from some blue chips. The same with earnings ratios even while most equity prices remain at the low end of the market.

FOR many companies in Nigeria, the financial year 2009 was indeed one had to forget. What with all the dashed hopes for a recovery in the stock market; recovery in the financial world; recovery in consumer demand and recovery in the crude oil market, which indeed occurred somehow  towards the end of the fiscal year.

MOBIL Oil Nigeria Plc (Mobil) listed under the Petroleum (Marketing) subsector of the Nigerian Stock Exchange (NSE), Nigerian Breweries Plc (NB) listed under the Breweries subsector and the Nigerian Bottling Company Plc (NBC) listed under the Breweries subsector under the Food/Beverages & Tobacco subsector emerged the most capitalized by Naira votes at the end of the week.
Mobil recorded a gain of N8.00. It opened trading at N165.00 and closed at N173.00. NB followed with a gain of N5.35; it opened trading at N69.70 and closed at N75.05, and NBC gained N1.70, it opened at N34.10 and closed at N35.80.

SINCE the opening of the Nigerian Stock Exchange(NSE), it has been fighting to remain independent and be seen to be so. It was a non-profit making commercial enterprise formed by the private sector and some individuals with little or no government input. And, since then it has been run by its own council made up of members who were there either on their personal merit or represent major stakeholders in the market.

Yet, each time there has been any major crisis in the market, there has always been those ever ready to call on the government to intervene and resolve the matter especially when such a crisis involves either the leadership of the market or threatens its credibility. And so, while the recent clash between the NSE council President and the Director General surfaced, the same calls were heard too. What then should surprise all stakeholders in the recent intervention by the Securities and Exchange Commission (SEC) in the NSE affairs, is the fact that it occurred at all.

The first  major crisis that hit the market similar to this one was when Chief Samuel Asabia, then President of the Council was locked in battle with the pioneer Executive Secretary,  Mr Odedina.The circumstances were very similar. Odedina it was who reportedly invited Chief Asabia to the council after he emerged as the first indigenous managing director of the bank now called First Bank. Yet, not too long after they clashed because both of them had strong characters.

Of course, chief Asabia won hands down not only because he was the boss of a powerful financial institution, but also because he had the full ears of the government and was in fact, reputed then to always enjoy eating pounded yam with the head of state.

So, you could say that first crisis was resolved through government intervention of a diplomatic kind and no one noticed it. But then, it made Chief Asabia the most powerful president of council the exchange has ever had. While he was there, his every word was the law.
But Asabia also miscalculated too. He brought in Hayford Alile as NSE Boss with a changed title: Director General. The man was one who enjoyed making his point  quietly and while any heat was on, you hardly could get Alile to commit himself in public to anything. All you will get was a diplomatic answer even in private too.

Given the nature of the NSE politics then and the dominant forces operating, Alile was in fact intended to be a stop gap boss with limited tenure. But then,  not long after, those in the waiting shot themselves in the leg by engaging in outside trading and allocation of some shares which resulted in a major crisis of a different kind, with calls once again for government intervention.

NESTLE Nigeria Plc (Nestle) listed under the Food/Beverages & Tobacco subsector of the Nigerian Stock Exchange (NSE), Guinness Nigeria Plc (Guinness) and NB Plc (UACN) listed under the Breweries subsector emerged the most capitalized by Naira votes at the end of the week.
Nestle recorded a gain of N8.00. It opened trading at N356.00 and closed at N364.00. Guinness followed with a gain of N7.00; it opened trading at N162.00 and closed at N169.00, and NB gained N3.76, it opened at N66.27 and closed at N70.24.

Monday 26
Market gains N64bn
Trading on the Nigerian Stock Exchange (NSE) opened on a positive note as the market appreciated at the close of transaction. The corporate indicators, the All Share Index (ASI) and the market capitalization moved northward by 1.02 per cent. The ASI opened at 25,269.36 basis points and closed at 25,527.44 basis points, gaining 258.08 basis points, the market capitalization gained N64 billion, when it opened at N6.18 trillion and closed at N6.24 trillion.

NATURALLY, since crash 2008, caution has been the watch word at the stock market not only on the part of investors, but also for stock brokers especially while making prices. Very many investors are no doubt, praying daily for the market to recover well enough for them to be involved fully again but none can pressurise stock brokers to move such prices without solid performance figures to back them up.

So, highly priced equities are now very scarce in the market. This is partly because the banks were yet to get out of the woods dictated by toxic loans with CBN Governor Sanusi Sanusi hovering over  everyone like a  village headmaster with his ready cane. Last week, we did a quick study of the market through the Friday, July 23, daily official list and we were not too surprised to count them on our finger tips, so to speak.

COURTEVILLE Investments PLC (CIP), is one company worth watching in today's Nigerian stock market. In the first place, it is so small that one begins to wonder what it was doing as a fully quoted company instead of being in the emerging market aka second tier.

For example, by 2006, the total turnover of the company was not up to the entertainment allowance of the chief executive officers of some top blue chips in the same market. And even by 2009, it was one of the very few companies quoted in the main market with less than one billion turnover for the whole year, the kind of figure even some divisions of many companies in the same market record yearly with ease.

•Market rated high
THE presidential assent to the establishment of Asset Management Corporation (AMC) has generated positive reactions as the capital and money markets investors showed renewed confidence by increasing their stakes. Cowry Asset Management Limited, in its daily report, acknowledged that the Nigerian equities got a respite as President Jonathan signed the AMCON bill into law.

EQUITIES listed under the Food, Beverages & Tobacco subsector of the Nigerian Stock Exchange (NSE), Flour Mills Nigeria Plc (FlourMills), Nestlé Nigeria Plc (Nestle) and the Nigerian Bottling Company Plc (NBC) emerged the most capitalized by Naira votes at the end of the week.
FlourMills recorded a gain of N6.00. It opened trading at N70.00 and closed at N76.00. Nestle followed with a gain of N3.00; it opened trading at N355.00 and closed at N358.00, then NBC gained N2.75, it opened at N30.00 and closed at N32.75.

IN view of developments in the Nigerian stock market since crash 2008, there is less room for overvaluation of equities these days. The chances of overvaluation are greater when there is a boom; or what in market terms amounts to bullish run.

Hitherto, the norm was for the market to be bullish most of the time but since 2008, caution has been the watch word for many investors and that some of such investors have not offloaded yet is because current prices, especially for banks, are still a long way down from their purchase prices. So, they prefer to hold tight, instead of cutting their losses, like good speculators could.

THE giant brewer, Guinness Nigeria Plc (Guinness) listed under the Breweries subsector and the Nigerian Bottling Company Plc (NBC) listed under the Food, Beverages & Tobacco subsector of the Nigerian Stock Exchange (NSE) emerged the most capitalized by Naira votes at the end of the week.

Guinness recorded a gain of N7.49. It opened trading at N158.51 and closed at N166.00. NBC followed with a gain of N1.45; it opened trading at N30.00 and closed at N31.45.

EARNINGS per share (EPS) is one of those very important in corporate performance analysis or accounting for decision making. In a nutshell, it shows how much profit a company made per share in a particular period. It is usually from this that it can pay dividend within the limits of the law.
It is got by dividing distributable profit by the number of shares issued at the period in question. It is from this dividend per share is normally recommended for shareholders approval depending on existing policy and liquidity position.

Sometimes, especially for very blue chip companies with such a tradition, interim dividend is authorized and paid by the Board of Directors based on how high the EPS is . Of course, at the end of the full period final dividend is then recommended at the next annual general meeting.