The wobbly trading
performances witnessed at the Nigerian Stock Exchange (NSE) during the
first two months of this quarter are expected to continue in March,
some finance experts have said.
The NSE, which
recorded a total gain of 8.37 per cent or N662 billion on equities at
the close of trading activities in January, lost 3.03 per cent or N260
billion in February.
Akinbade Ibisiola,
head, research team at Resource Cap Company, a portfolio management
firm, said the nation’s capital market “may remain unstable” in March
following some recent issues in the market.
“The sudden switch
in investors’ confidence in the market from January till February was
really a cause for concern. In January, the market did a whopping eight
per cent and in February it went down because of the issue of
recapitalisation which the Exchange brought up against stockbroking
firms,” Mr. Ibisiola said.
Olugbenga Emmanuel,
an analyst at WealthZone Company, a business advisory firm, said a
court case involving the NSE management is also one of the developments
“working against investors’ confidence in the market,” adding that “the
ability of the bourse to fully rebound in the last month of this
quarter is uncertain in the midst of these negativities.”
The owners and
operators of the anti-securities fraud system, known as Trade Alert at
the NSE, Adonai Net Nigeria, had dragged the management of the Exchange
to court for a breach of contract.
Meanwhile, a Lagos
High Court last week asked the NSE and Adonai Net Nigeria to head to
the National Arbitration Court in Abuja to decide on the lawsuit
instituted by Adonai Net.
However, despite
the pessimism in the market, Mr. Emmanuel said the current positive
financial results posted by some quoted companies may cushion the poor
performance in the market and boost investors’ confidence in March.
Recent results
Directors of
Vitafoam Nigeria last week made available their unaudited first quarter
scorecard to the market. It covered the period ended December 31, 2010
and showed significant growth in the company’s activities.
Sales revenue
within the period grew by 30.15 per cent from N2.50 billion in a
similar period of 2009 to N3.26 billion. Similarly, profitability index
inched up by 21.53 per cent from N197.82 million in similar period 2009
to N240.42 million.
Directors of the
information and communication technology quoted firm, IHS Plc, last
weekend informed the market of their intention to pay a final dividend
of 6 kobo for the year ended April 30, 2010. The company’s audited
report was released into the market a fortnight ago.
In the scorecard,
the company’s turnover grew by 52.1 per cent from N11.34 billion in
2009 to N17.25 billion. However, its profit after tax dipped by 47.17
per cent to N553.71 million, compared to N1.05 billion in similar
period 2009.
Nigerian Breweries
also said it will pay incentives to its shareholders. The directors are
recommending a dividend of N1.25 kobo per share.
Status guidelines
Meanwhile, the NSE yesterday released “guidelines for change of status from Broker/Dealer to Broker.”
Some dealing member firms had indicated interest in changing their status of registration from Broker/Dealer to Broker only.
While a
Broker/Dealer status can transact business on behalf of clients and
also trade with its company’s fund, a broker can only buy or sell
stocks on behalf of clients.
Mohammed Momoh, the
NSE assistant general manager/head, Regulation and Risk Management
Directorate, in a statement said, “The Securities and Exchange
Commission has requested dealing member firms seeking a change of
status to obtain a letter of ‘No Objection’ from the Exchange.”
Some of the
guidelines read in part: “The Exchange shall confirm from the Central
Securities and Clearing System Limited (CSCS) details of accounts
submitted by the requesting dealing member.
“Upon confirmation, “the Exchange shall request the CSCS to transfer
all such securities in the proprietary to a nominated dealing member
firm appointed by the requesting dealing member and approved by the
Exchange.”
