Ah, those investing mistakes that everyone wishes hadn’t happened to them. Not all losing ventures in the stock market are due to foolishness.
For a plethora of reasons, including reckless advice from the “experts”, emotional trading, misapplication of the basic stock investing concepts, and failure to follow a proven stock trading system all can lead to the same end. Here is a list of common errors to avoid, improving your results and limiting those investing mistakes:
1. Never invest without a clearly defined stock trading plan. A well-conceived plan will include considerations of time, risk-tolerance, and future income….and a proven system for success (such as the Japanese Candlestick stock trading method). A plan that follows these guides will steer clear of most investing mistakes.
2. Investors don’t stick to their best investment plan. All too often, investors will feel changes in the market and not have faith in their plan. Although investing is always referred to as "long term", it is rarely dealt with as such by investors who would be hard pressed to explain simple stock market basics. Again, a good investment plan including a strong system can help to evade most investing mistakes.
3. Investors fall prey to the “one-trick pony” method of investing. To think that a rising stock will continue to rise indefinitely, especially if it is a company to which the investor has ties, is fool’s gold. Remember, portfolio diversification is a hedge against investing mistake. Follow your system and take your profits according to your plan.
4. Too often, investors are stricken with "analysis paralysis”, overdosing on stock market information. Such an approach is confusing, frustrating, and leads to more investing mistakes. Something else is good to remember; sales pitches do not constitute research! Technical analysis can be dirty work, but the end result is usually worth the effort.
5. Investors frequently are looking for the “home run”, that shortcut to a huge profit which usually only leads to more investing mistakes. A beginner investing in the stock market will abandon a profitable investment plan to take a chance on securities that cause nothing but trouble. The fact is, a solid plan will likely improve risk reward ratios faster, and more securely, than that swing for the fence.
6. Many investors fail to respect the cyclical nature of the markets and buy the latest fad in securities at its highest price. They will abandon the plan and system that was improving their stock market results and in turn, create a “buy high, sell low” trend in their investing. Such investors usually don’t have to suffer long; a trend like this will quickly eliminate the beginner investing in the stock market and their investing mistakes!
7. Many investing mistakes will involve some form of unrealistic expectations for an investor’s portfolio. Successful traders find that the most consistent success in investing requires a trip down the path of reasonable goals and steady growth. Trusting your plan and system make this trip more enjoyable.
A mitigating factor in the problems that cause investing mistakes is frequently the sensationalism that follows investing.
Media coverage of stock market data analysis has become akin to the sports coverage; somehow investing has been marketed like a sporting event, with winners and losers.
While investors “win” or “lose” their profits or even their investment, the market is not competitive in that sense. An informed investor, with his plan and system in place, competes for profits, not a spot on the evening news. Picking stocks that make a profit, not winning or losing, is the ultimate reward for avoiding those investing mistakes.
Source: http://www.candlestickforum.com
Monday, June 16, 2008
Tuesday, June 10, 2008
NSE freezes stock prices to halt slide
In a rare move, the Council of the Nigerian Stock Exchange on Monday imposed a freeze on the downward movement of stock prices that seemed to confirm regulators’ concerns about the consistent bearish trend in the market.
The significant price losses had been linked to the Central Bank of Nigeria’s directive to banks to suspend lending to support margin trading by stockbrokers and speculators.
Margin trading is the risky practice of using leverage or borrowed funds to invest in securities, which amplifies both gains and losses.
Unconfirmed estimates put the size of leverage in the stock market at 18 per cent or about N2.5tn, and this has been a significant factor in driving prices, especially in emerging markets.
It was learnt that the suspension, which resulted in the rather unusual scenario of 31 stocks gaining in price and none losing at the close of Monday’s trading, would be for one week in the first instance, while the NSE tries to persuade the CBN to rescind its decision.
It was also learnt that top officials of the CBN, NSE and the Securities and Exchange Commission were meeting over the matter, which was aimed at restoring confidence in the market.
Market capitalisation dropped by 13 per cent or N1.65tn on March 6, from N12.64tn to N10.98tn on Monday. The All Share Index also fell by 15 per cent or 9,963.40 points, from 66,371.20 on March 9 to 56,407.80 on Monday.
NSE officials could not be reached for comments on Monday, but stockbrokers said that all stocks that would have been marked down were to revert to the closing price as at June 6, 2008.
Spokesman of the Securities and Exchange Commission, Mr. Lanre Oloyi, said there was “nothing wrong” with the move without elaborating, when contacted on the telephone for comments on Monday.
A leading stockbroker, who did not want to be quoted, said the action was taken to prevent a free fall in the market, which had been under pressure since speculative activity was significantly checked by the dearth of borrowed funds being pumped in by highly optimistic speculators, relying on recent past performance..
“What they have done is not common, but it is aimed at turning around the market. The freeze is for one week, the market has been unnecessarily bearish and the NSE must intervene to an extent. The NSE should not allow the market to be undervalued,” he said.
The Assistant Managing Director, Apex Securities Limited, Mr. Amanze Olisaemeka, said the move was a deliberate attempt by the Exchange to halt the fall of stock prices.
He said, “You know investors have lost over N260bn in the past few days, and through administrative fiat, the exchange decided to checkmate further price losses. But what we should ask is: Does the factor of demand and supply no longer have a role in our market? Can the exchange wake up and freeze stock prices?”
However, the Chief Executive, Financial Derivatives Company, Mr. Bismark Rewane, said it was wrong for the NSE to attempt to rig the market, and described the move as “disorderly intervention in a chaotic market.”
Rewane, who said that while it was true that the market could be heading towards under-valuation, stressed that the decision to freeze prices could trigger a panic reaction from investors, who might want to exit the market once the freeze was lifted.
“What they have done is to introduce circuit breakers without any support,” he said, adding that the NSE and other regulators should have put in place a package to bail out some stocks, which were clearly undervalued to support prices and restore long-term confidence in the market.
He said that freezing the market now was a sign of panic by the regulators, which would make investors panic more.
He also blamed the scenario on the tendency of investors to “gamble” on the market. “If you borrow money at 22 per cent and invest in a market where dividend yield is two per cent, in the hope that prices will appreciate, that is tantamount to calling the stock market a casino, which it is not,” he said.
National Coordinator of the Independent Shareholders Association of Nigeria, Mr. Sunny Nwosu, supported the price freeze on the grounds that investors needed to be protected, while the regulators reviewed the policy on margin lending. This, he said, was aimed at checking the activities of speculators.
While advising investors not to panic, he said the market would continue to swing but would not bust, as Nigeria was still an emerging market with a lot of uncertainties as well as opportunities.
“The market is still growing and is largely speculative; there are a lot of uncertainties and the fundamentals may not really be there, but it will not bust. In fact, this is the time for people to buy at lower prices so that they can soothe some of the pains they are going through now.
“The market will bounce back, even if not up to the levels it was before margin trading was stopped,” Nwosu said.
He said the decision to stop lending for margin trading was taken to protect investors who relied on brokers for all their decisions but that it should be reviewed to allow for more liquidity in the market. - Punch
The significant price losses had been linked to the Central Bank of Nigeria’s directive to banks to suspend lending to support margin trading by stockbrokers and speculators.
Margin trading is the risky practice of using leverage or borrowed funds to invest in securities, which amplifies both gains and losses.
Unconfirmed estimates put the size of leverage in the stock market at 18 per cent or about N2.5tn, and this has been a significant factor in driving prices, especially in emerging markets.
It was learnt that the suspension, which resulted in the rather unusual scenario of 31 stocks gaining in price and none losing at the close of Monday’s trading, would be for one week in the first instance, while the NSE tries to persuade the CBN to rescind its decision.
It was also learnt that top officials of the CBN, NSE and the Securities and Exchange Commission were meeting over the matter, which was aimed at restoring confidence in the market.
Market capitalisation dropped by 13 per cent or N1.65tn on March 6, from N12.64tn to N10.98tn on Monday. The All Share Index also fell by 15 per cent or 9,963.40 points, from 66,371.20 on March 9 to 56,407.80 on Monday.
NSE officials could not be reached for comments on Monday, but stockbrokers said that all stocks that would have been marked down were to revert to the closing price as at June 6, 2008.
Spokesman of the Securities and Exchange Commission, Mr. Lanre Oloyi, said there was “nothing wrong” with the move without elaborating, when contacted on the telephone for comments on Monday.
A leading stockbroker, who did not want to be quoted, said the action was taken to prevent a free fall in the market, which had been under pressure since speculative activity was significantly checked by the dearth of borrowed funds being pumped in by highly optimistic speculators, relying on recent past performance..
“What they have done is not common, but it is aimed at turning around the market. The freeze is for one week, the market has been unnecessarily bearish and the NSE must intervene to an extent. The NSE should not allow the market to be undervalued,” he said.
The Assistant Managing Director, Apex Securities Limited, Mr. Amanze Olisaemeka, said the move was a deliberate attempt by the Exchange to halt the fall of stock prices.
He said, “You know investors have lost over N260bn in the past few days, and through administrative fiat, the exchange decided to checkmate further price losses. But what we should ask is: Does the factor of demand and supply no longer have a role in our market? Can the exchange wake up and freeze stock prices?”
However, the Chief Executive, Financial Derivatives Company, Mr. Bismark Rewane, said it was wrong for the NSE to attempt to rig the market, and described the move as “disorderly intervention in a chaotic market.”
Rewane, who said that while it was true that the market could be heading towards under-valuation, stressed that the decision to freeze prices could trigger a panic reaction from investors, who might want to exit the market once the freeze was lifted.
“What they have done is to introduce circuit breakers without any support,” he said, adding that the NSE and other regulators should have put in place a package to bail out some stocks, which were clearly undervalued to support prices and restore long-term confidence in the market.
He said that freezing the market now was a sign of panic by the regulators, which would make investors panic more.
He also blamed the scenario on the tendency of investors to “gamble” on the market. “If you borrow money at 22 per cent and invest in a market where dividend yield is two per cent, in the hope that prices will appreciate, that is tantamount to calling the stock market a casino, which it is not,” he said.
National Coordinator of the Independent Shareholders Association of Nigeria, Mr. Sunny Nwosu, supported the price freeze on the grounds that investors needed to be protected, while the regulators reviewed the policy on margin lending. This, he said, was aimed at checking the activities of speculators.
While advising investors not to panic, he said the market would continue to swing but would not bust, as Nigeria was still an emerging market with a lot of uncertainties as well as opportunities.
“The market is still growing and is largely speculative; there are a lot of uncertainties and the fundamentals may not really be there, but it will not bust. In fact, this is the time for people to buy at lower prices so that they can soothe some of the pains they are going through now.
“The market will bounce back, even if not up to the levels it was before margin trading was stopped,” Nwosu said.
He said the decision to stop lending for margin trading was taken to protect investors who relied on brokers for all their decisions but that it should be reviewed to allow for more liquidity in the market. - Punch
Friday, June 6, 2008
Eterna proposes to raise fresh funds through PO
Eterna proposes to raise fresh funds through PO
As shareholders calls for Rights
Eterna Oil & Gas Plc, a player in the Petroleum Marketing Sector of the Nigerian Stock Exchange (NSE) has proposed to raise fresh funds through a Public Offer (PO), while its shareholders have called for a Rights Issue. This was gathered by Proshare NI at the company’s 18th Annual General Meeting (AGM) held today in Lagos Nigeria.
The company has discussed as part of its special business at the AGM to raise equity and/ or debt capital from the general public subject to the approval of regulatory authorities.
However, the shareholders of the company suggested that instead of raising the fresh funds through an offer, it should be done by way of Rights to existing shareholders.
Though as at the time of filling in this report, the amount to be raised, price and date are yet to be decided and made public; until the regulators give their approval.
The company increased its Turnover from N3.512 billion in year 2006 to N4.907 in year 2007 indicating an increase of 40 percent in the period under review.
Eterna Oil did not pay dividend to its shareholders in the 2007 Financial Year End (FYE), rather it gave a bonus of one Ordinary Share of 50 Kobo for every five Ordinary Shares of 50 Kobo held by investors.
As shareholders calls for Rights
Eterna Oil & Gas Plc, a player in the Petroleum Marketing Sector of the Nigerian Stock Exchange (NSE) has proposed to raise fresh funds through a Public Offer (PO), while its shareholders have called for a Rights Issue. This was gathered by Proshare NI at the company’s 18th Annual General Meeting (AGM) held today in Lagos Nigeria.
The company has discussed as part of its special business at the AGM to raise equity and/ or debt capital from the general public subject to the approval of regulatory authorities.
However, the shareholders of the company suggested that instead of raising the fresh funds through an offer, it should be done by way of Rights to existing shareholders.
Though as at the time of filling in this report, the amount to be raised, price and date are yet to be decided and made public; until the regulators give their approval.
The company increased its Turnover from N3.512 billion in year 2006 to N4.907 in year 2007 indicating an increase of 40 percent in the period under review.
Eterna Oil did not pay dividend to its shareholders in the 2007 Financial Year End (FYE), rather it gave a bonus of one Ordinary Share of 50 Kobo for every five Ordinary Shares of 50 Kobo held by investors.
No Reprieve in Sight as Bears Continue Dominance
The bearish sentiments which have characterised the market in recent times continued again as the market’s All Share Index lost by a phenomenal 262 basis points (2.62%) to close at 57,386 points compared with that of last week at 58,929 points the previous week. Year to Date, the market has now lost by over just over 2% indicating that investors who invested their funds at the beginning of the year have experienced a decline in their portfolios by over 200 basis points.
With the index outperforming several blue chip stocks, most investor have experienced capital losses of even greater magnitude than the index. Total market capitalisation also lost by 3.78% while volume traded dipped by 12.12%. The only ‘positive’ statistic during the week was market turnover which improved by an impressive 48.84%.
Overall the market can be said to have closed on a bearish note both in terms of performance and activity levels.
Analysts have attributed this declining trend to government’s recent position on margin lending by banks to Stockbroking firms. The Federal Government recently announced a stop order on the practice in which banks give facilities to stockbrokers to who in turn lend such monies to their clients based on the acceptance of certain terms and conditions. Other analysts believe that the market is merely going through market correction as some of the quoted stocks are highly overvalued.
Several factors have also been attributed to the faltering performance of stocks such as liquidity squeeze, emergence of other alternative investment vehicles as well as general drop in the confidence level of investors. Whatever the case, consistent drop in prices have negatively affected investor morale with several investors exiting stocks on a daily basis. A rebound in market activities cannot however be seen in the immediate future.
Perhaps the major contributor to the overall decline in the market’s performance was the banking sector with all the big seven banks (First Bank, GTBank, Intercontinental Bank, Oceanic Bank, UBA, Union Bank and Zenith Bank) making up over 35% of overall market capitalisation. All the stocks within this category lost points during the week under review. Despite GTBank’s impressive result in which it recorded a 60% growth in Profit after Tax (PAT), declared a dividend of 70 kobo and bonus of 1 for 11, the banking giant still lost by a total of 11.16% to close at N28.43. The bank is not known for sharp rises in price over short periods so a sustained rally was not expected. The loss it suffered is however coming on the heels of the general lull in the market. UBA, despite its adjustment in price due to ‘mouth watering’ corporate actions, was not able to attractive any interest from investors.
During the review period, the stock’s price declined by 39.47% from N57 to N34.50 (inclusive of its dividend adjustment). Intercontinental Bank which seems to have found a trading range of between the N40-N45 price band lost by 3.47%.
Among the second tier banks, the best performing stock was Fidelity bank as it recorded a 5% rise in its price. The only other gainers in this category were that of FCMB (0.3%) and Platinum Habib Bank (0.48%). Ecobank was the proverbial black sheep among its peers as it declined by a total of 11.93% to close at N8.12 from N9.22. The bank which was recently released from technical suspension due to its failed merger talks with Sterling Bank, made public its intention to approach the market to raise extra funds through a hybrid offer. The stock subsequently rallied for some days before coming under the heat of speculators. Consistent maximum price losses led to its eventual unimpressive performance. Other stocks which experienced price dips include Afribank (4.26%), Diamond Bank (6.61%), First Inland Bank (1.27%) and IBTC Chartered Bank (2.78%). Skye Bank completed the list with a 5.63% crash in its share value. Ecobank Transnational Incorporated had its price adjusted for its 5 for 1 share split. The stock’s share price was therefore adjusted upwards by that margin with its share price moving in the opposite direction. The current adjusted price of the stock thereby attracted investors as its current price of below N50 appears attractive in absolute terms.
The agro-allied industry witnessed Okomu Oil closing flat at N29.95. The stock which once attained the price of N40 during the year has been a slow mover in the last couple of weeks. Despite its relatively low price, the agro-allied concern consistently closed with large unfilled offer positions. Presco however defied expectations as the stock which was billed to be adjusted for its bonus issue on Friday the 30th of June, continued to trade normally after that date. The stock which had experience aggressive rallies in previous weeks closed the week 4.95% lower than its opening price. It is expected that when finally marked down for its bonus issue, its adjusted price will present an attractive point for speculators to book entries.
Despite Guinness’ special dividend of N6.80 as well as the release of interim results by Nigerian Breweries (NB) and Nigerian Bottling Company (NBC), the overall performance of stocks with the Breweries/Beverages sectors was short of impressive.
Investors were obviously not attracted to Guinness’ corporate actions as the stock declined, albeit marginally by 0.84%. 7-UP Plc was however the worst performer in the sector as it fell by 4.24% while marginal price upside were recorded in the share prices of NBC and NB. The ‘not-so-impressive’ performance in this sector can be attributed to the general dull market trend which is believed to have an overall bearing influence on its constituent sectors.
The cement industry was very dull. The sector which is experiencing inherent industry challenges such as inadequate government policies, power shortages, inadequate supply to meet demand, etc seems to be reflecting such problems in the capital market with most of the stocks declining in value. Ashaka Cement which had been trading between N48 and N52 in previous weeks dropped to below the N40 price band. It closed at N37 after losing by 10.84%. WAPCO’s fortunes weren’t much better as the stock tumbled to an 8% price loss.
In a true reflection of the overall market performance, the consumer goods industry was extremely bearish. Sugar conglomerate Dangote Sugar Refinery lost by 6% while its sister company Dangote Flour Mills declined by 10.71%. The losing trend was also felt by PZ industries and Unilever with as they both shed 6.4% and 4.75% respectively. Investors in Nestle Foods will however be thankful as they finished the stock on a flat note at N225. Flour Mills of Nigeria, despite its attractive entry point of below the N90 price band still lost points during the week as investors’ general drop in confidence had its impact on the flour milling giant.
In a slight contrast to the performance of the market, the oil marketing sector offered a glimmer of hope to a highly demoralized investing public. African Petroleum closed flat as it is still on technical suspension while Mobil, Oando and Chevron lost marginally by 2.38%, 0.38% and 2.5% respectively. However, quite impressive was the fact that Conoil was able to chalk up 2.37%, Total 5% and Japaul Oil and Maritime Service – an impressive 21.35%. The fringe oil servicing company finished the week as the market’s best performer. Investors seemed attracted to the interim results of the company released during the week in which they grew their PAT by over 155% from N78 million to N201 million.
The insurance sub sector of the financial services industry was probably the hardest hit in the whole market as virtually all the stocks lost heavily. Major losers include recently listed Universal Insurance (17.47%), Niger Insurance (14.72%), Mutual Benefits Assurance ((17.58%), Custodian & Allied Insurance (12.71%) as well as the pair of Law Union & Rock Insurance and Linkage Assurance which both lost by 14.83%. Worthy of mention is the fact that newly listed Invest & Allied Insurance (IAI) finished among the major losers for the week, shedding 17.94% in the process.
The stock came under speculative attack despite market rumours of its price attaining N3. The stock however closed as the most traded stock with over 1.58 billion shares exchanging hands during the review period. It is expected that profit takers who have had their share certificates verified will continue to take profits (at least) on the stock until its gets to its listing price of N1.30.
The overall performance of the market depicts a situation akin to that of a recession but market watchers believe the trend is only temporary. With companies releasing results in quick succession and declaring attractive corporate actions, the market’s performance has still not been lifted. It is expected that investors might begin to have a rethink as regards certain several stocks which have attained Year-to-Date low points and begin to book speculative entries thereby lifting overall performance.
The timing and duration of such possible market resurgence is however clouded with uncertainties.
Lead Capital
With the index outperforming several blue chip stocks, most investor have experienced capital losses of even greater magnitude than the index. Total market capitalisation also lost by 3.78% while volume traded dipped by 12.12%. The only ‘positive’ statistic during the week was market turnover which improved by an impressive 48.84%.
Overall the market can be said to have closed on a bearish note both in terms of performance and activity levels.
Analysts have attributed this declining trend to government’s recent position on margin lending by banks to Stockbroking firms. The Federal Government recently announced a stop order on the practice in which banks give facilities to stockbrokers to who in turn lend such monies to their clients based on the acceptance of certain terms and conditions. Other analysts believe that the market is merely going through market correction as some of the quoted stocks are highly overvalued.
Several factors have also been attributed to the faltering performance of stocks such as liquidity squeeze, emergence of other alternative investment vehicles as well as general drop in the confidence level of investors. Whatever the case, consistent drop in prices have negatively affected investor morale with several investors exiting stocks on a daily basis. A rebound in market activities cannot however be seen in the immediate future.
Perhaps the major contributor to the overall decline in the market’s performance was the banking sector with all the big seven banks (First Bank, GTBank, Intercontinental Bank, Oceanic Bank, UBA, Union Bank and Zenith Bank) making up over 35% of overall market capitalisation. All the stocks within this category lost points during the week under review. Despite GTBank’s impressive result in which it recorded a 60% growth in Profit after Tax (PAT), declared a dividend of 70 kobo and bonus of 1 for 11, the banking giant still lost by a total of 11.16% to close at N28.43. The bank is not known for sharp rises in price over short periods so a sustained rally was not expected. The loss it suffered is however coming on the heels of the general lull in the market. UBA, despite its adjustment in price due to ‘mouth watering’ corporate actions, was not able to attractive any interest from investors.
During the review period, the stock’s price declined by 39.47% from N57 to N34.50 (inclusive of its dividend adjustment). Intercontinental Bank which seems to have found a trading range of between the N40-N45 price band lost by 3.47%.
Among the second tier banks, the best performing stock was Fidelity bank as it recorded a 5% rise in its price. The only other gainers in this category were that of FCMB (0.3%) and Platinum Habib Bank (0.48%). Ecobank was the proverbial black sheep among its peers as it declined by a total of 11.93% to close at N8.12 from N9.22. The bank which was recently released from technical suspension due to its failed merger talks with Sterling Bank, made public its intention to approach the market to raise extra funds through a hybrid offer. The stock subsequently rallied for some days before coming under the heat of speculators. Consistent maximum price losses led to its eventual unimpressive performance. Other stocks which experienced price dips include Afribank (4.26%), Diamond Bank (6.61%), First Inland Bank (1.27%) and IBTC Chartered Bank (2.78%). Skye Bank completed the list with a 5.63% crash in its share value. Ecobank Transnational Incorporated had its price adjusted for its 5 for 1 share split. The stock’s share price was therefore adjusted upwards by that margin with its share price moving in the opposite direction. The current adjusted price of the stock thereby attracted investors as its current price of below N50 appears attractive in absolute terms.
The agro-allied industry witnessed Okomu Oil closing flat at N29.95. The stock which once attained the price of N40 during the year has been a slow mover in the last couple of weeks. Despite its relatively low price, the agro-allied concern consistently closed with large unfilled offer positions. Presco however defied expectations as the stock which was billed to be adjusted for its bonus issue on Friday the 30th of June, continued to trade normally after that date. The stock which had experience aggressive rallies in previous weeks closed the week 4.95% lower than its opening price. It is expected that when finally marked down for its bonus issue, its adjusted price will present an attractive point for speculators to book entries.
Despite Guinness’ special dividend of N6.80 as well as the release of interim results by Nigerian Breweries (NB) and Nigerian Bottling Company (NBC), the overall performance of stocks with the Breweries/Beverages sectors was short of impressive.
Investors were obviously not attracted to Guinness’ corporate actions as the stock declined, albeit marginally by 0.84%. 7-UP Plc was however the worst performer in the sector as it fell by 4.24% while marginal price upside were recorded in the share prices of NBC and NB. The ‘not-so-impressive’ performance in this sector can be attributed to the general dull market trend which is believed to have an overall bearing influence on its constituent sectors.
The cement industry was very dull. The sector which is experiencing inherent industry challenges such as inadequate government policies, power shortages, inadequate supply to meet demand, etc seems to be reflecting such problems in the capital market with most of the stocks declining in value. Ashaka Cement which had been trading between N48 and N52 in previous weeks dropped to below the N40 price band. It closed at N37 after losing by 10.84%. WAPCO’s fortunes weren’t much better as the stock tumbled to an 8% price loss.
In a true reflection of the overall market performance, the consumer goods industry was extremely bearish. Sugar conglomerate Dangote Sugar Refinery lost by 6% while its sister company Dangote Flour Mills declined by 10.71%. The losing trend was also felt by PZ industries and Unilever with as they both shed 6.4% and 4.75% respectively. Investors in Nestle Foods will however be thankful as they finished the stock on a flat note at N225. Flour Mills of Nigeria, despite its attractive entry point of below the N90 price band still lost points during the week as investors’ general drop in confidence had its impact on the flour milling giant.
In a slight contrast to the performance of the market, the oil marketing sector offered a glimmer of hope to a highly demoralized investing public. African Petroleum closed flat as it is still on technical suspension while Mobil, Oando and Chevron lost marginally by 2.38%, 0.38% and 2.5% respectively. However, quite impressive was the fact that Conoil was able to chalk up 2.37%, Total 5% and Japaul Oil and Maritime Service – an impressive 21.35%. The fringe oil servicing company finished the week as the market’s best performer. Investors seemed attracted to the interim results of the company released during the week in which they grew their PAT by over 155% from N78 million to N201 million.
The insurance sub sector of the financial services industry was probably the hardest hit in the whole market as virtually all the stocks lost heavily. Major losers include recently listed Universal Insurance (17.47%), Niger Insurance (14.72%), Mutual Benefits Assurance ((17.58%), Custodian & Allied Insurance (12.71%) as well as the pair of Law Union & Rock Insurance and Linkage Assurance which both lost by 14.83%. Worthy of mention is the fact that newly listed Invest & Allied Insurance (IAI) finished among the major losers for the week, shedding 17.94% in the process.
The stock came under speculative attack despite market rumours of its price attaining N3. The stock however closed as the most traded stock with over 1.58 billion shares exchanging hands during the review period. It is expected that profit takers who have had their share certificates verified will continue to take profits (at least) on the stock until its gets to its listing price of N1.30.
The overall performance of the market depicts a situation akin to that of a recession but market watchers believe the trend is only temporary. With companies releasing results in quick succession and declaring attractive corporate actions, the market’s performance has still not been lifted. It is expected that investors might begin to have a rethink as regards certain several stocks which have attained Year-to-Date low points and begin to book speculative entries thereby lifting overall performance.
The timing and duration of such possible market resurgence is however clouded with uncertainties.
Lead Capital
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