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Investors
positioning based on the rumor of AMCON commencement of operations,
changed the market mood on the last trading day of the week as the
market run up by 2.42% or 592.56 points on Friday. NSE ASI was up
through the five trading days of the week under review, thus, it
wrapped up trading at 25,077.73 points from the opening figure of
23,772.40 having gained 5.49% or 1,305.33 points through the week. The
market capitalization followed the same trend and closed up at N6.145
trillion. NSE-30 Index closed up at 1,061.79 points. All the four
sectoral indexes end the week above their respective opening points.

Volume performances

The stock market
had a turnover of 1.32 billion shares valued at N11.53 billion in
27,714 transactions. In these the banking stocks was most active with
758 million shares worth N6 billion that were exchanged in 14,608
deals. The said volume was moved by transactions in the shares of
Access Bank Plc, United Bank for Africa and First City Monument Bank
Plc. Unlike previous week when Insurance sector followed, the Airline
services subsector was boosted by volume on the shares exchanged on
Airline Services and Logistics Plc as it top performance with 161.4
million shares worth N403.72 million in 427 transactions. Please not
that the moving volume on this equity emerged on Friday.

62 equities closed
the week above their various opening prices, 23 bows to the bear’s call
and 116 equities end on a flat note. Meanwhile, gainers’ volume stands
at 879.20 million shares and it accounted for 66.43% of total market
volume for the week. The losing stocks moved 339.89 million shares,
same as 26% of market volume and the unchanged stocks traded 104.42
million shares or 7.89% of the market volume. It could be deduced from
the market statistics table that it’s indeed a bullish week.

Technical view

On 10/15/2010, NSE
closed above the upper band by 0.0%. This combined with the steep
uptrend suggests that the upward trend in prices has a good chance of
continuing. However, a short-term pull-back inside the bands is likely.
During the past 10 bars, there have been 8 white candles and 2 black
candles for a net of 6 white candles. During the past 50 bars, there
have been 23 white candles and 27 black candles for a net of 4 black
candles. A long lower shadow occurred; this is typically a bullish
signal. The RSI has just reached its highest value in the last 14
periods this is bullish.

Market outlook

Before the new face
on the last trading day of the week, the market was already dull and
traders are already holding cash to position at bottom of the expected
pull back. If the market fundamentals remains, then the market may
continue on the bullish run from the first trading day of the new week,
nevertheless, traders should expect short pull back due to profit
taking activities. Whichever way it is viewed, cautious positioning
should be every trader’s watchword.

Corporate actions for the week ended

In the week under
review more staled results were reported in the market. Majority of
these results were audited reports. In terms of performance, many of
these reports were poor. We do not expect these reports to have
positive impact on the market indicator in the week ahead. The below
analysis on Arbico Plc and Union Dicon Salt Plc are reflection of how
bad some of these reports are.

Arbico Plc

Arbico Plc is a
building construction company incorporated way back in 1958 and listed
on the Nigerian Stock Exchange in December 1978. The company currently
has a share holding structure of 116.5 million shared in this order of
investors; Nigerians – 60% and Foreign – 40%. The directors yesterday
reported its belated financial year (FY) results for the period ended
December 31, 2007 and 2008. Lead indicators revealed abysmal
performance. Turnover dipped by 12.3% and 5.9% in both 2008 & 2007.
PAT indicator fared worst as it slide deeper in the red from loss after
tax of N2.08 million in 2007 to N36.14 million in 2008. In terms of
ratio performance; Loss per share of 62 kobo was attained against LPS
of 4 kobo in 2007. Loss profit margin stood at 3.01% against 0.15% in
2007. Price earnings multiples (PE ratio) remained dip rooted in the
red meaning the Arbico is not expected to return any positive earnings
in the nearest future.

In terms of book
value, Arbico is unattractive and selling above its intrinsic value at
current market price N26. Book value is 2.6, Price to book value is
9.99 and PSR 2.52. All are above bench mark indicators.

Observation; Arbico
current faced stiff competition in its industry militating against
revenue. Its cost of operation is high. Its intrinsic values are weak
compare to benchmarks. All these put together makes the stock
unattractive for short-medium-long term investment goal.

Union Dicon Salt Plc

Union Dicon Salt
Plc is a food, beverage & tobacco quoted company. The company was
listed on the exchange in September 1993 and currently has a paid-up
capital of 360 million. It currently has a six man board of director
chaired by Rtd Gen T.Y. Danjuma. In the recent reports of the company,
all the belated results for period ended December 31, 2004 through 2008
were made public. Hindsight revealed that the company’s operation is
being inhibited by continuous negative returns which have led to
massive erosion of shareholders’ fund after the FY 2003 figure (N219.2
million). Shareholder’s equity as at FY 2008 is in net liability of
N844.2 million.

In terms of
operational performance, for FY 2007 & 2008, no figure was reported
at turnover level meaning the company probably did not engaged in
productive activities. Others P & L indicators (P/LBT & P/LAT)
revealed negative figures from 2004 through 2008 FYs. As such loss per
share of (-1.04, -1.34, -0.40, -0.52 and -0.56) were posted from 2004
through 2008. For details on the revealed period performance, see the
below table.

Report on the OTC Market for FGN bonds

A total volume of
266.9 million units of bonds worth N246.36 billion in 1,978 deals was
recorded last week, in contrast to a total of 248.9 million units
valued at N243.41 billion exchanged in 1,940 deals during the week
ended Thursday, October 7, 2010. The most active bond (measured by
turnover volume) was the 10.00% FGN July 2030 series with a traded
volume of 100.8 million units valued at N84.20 billion in 714 deals.
This was followed by 4.00% FGN April 2015 series with a traded volume
of 35.25 million units valued at N28.53 billion in 331 deals.

Sixteen (16) of the available thirty-six (36) FGN Bonds were traded
during the week under review, compared with seventeen (17) recorded in
the fort-night week ago.