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The stock market runs through a mixed performance during the week, leading from sharp disagreement between the bullish and bearish investors over market position. Even when the bargain hunters felt it was profit taking time, market received timely patronage from good numbers of bullish investors that finally turn around the market face.

Week on week NSE ASI followed an uptrend; meanwhile, month on month, the downtrend still holds. If the ongoing trend is maintained, then the latter should change soon.

Despite the short pull back within the week, NSE ASI only closed 99.03 points or 0.40% below the opening point. It opened the week with 25,077.73 points and closed at 24,978.70. Market capitalization of listed equities equally closed in the red at N6.12 trillion.

NSE-30 shed 3.97 points same as 0.33% of its opening figure to close at 1,057.82 points. NSE-Banking and NSE-Oil/Gas appreciated by 1.71 points or 0.6% and 5.10 points or 1.54% respectively. Meanwhile; NSE-Food/Beverages and NSE-Insurance dipped by 20.23 points or 2.50% and 1.24 points and 0.75% respectively.

Percentage gainers/losers

40 stocks closed the week above their various opening prices, 43 shed prices and 118 stocks were flats. Price percentage gainers chart were led by Oceanic Bank Plc that gained 25.52% over its opening price, Unity Bank Plc appreciated by 19.39% and Afribank Plc, IHS Nig. Plc, and Ikeja Hotel Plc moved up by 15.33%, 13.73% and 12.88% respectively. Niger Insurance Plc top the price percentage losers’ chart with 12.50% followed by Cadbury Nig. Plc, Skye Bank Plc, Guaranty Trust Bank and Ecobank Plc with 12.12%, 8.04%, 8.02% and 7.94% respectively.

Report on the OTC FGN bonds market

A turnover of 223.6 million units worth N216.47 billion in 1,599 deals was recorded last week, in contrast to a total of 266.9 million units valued at N246.36 billion exchanged in 1,978 deals during the week ended Thursday, October 14, 2010. In terms of turnover/volume, the most active bond was the 10.00% FGN July 2030 with a traded volume of 33.2 million units valued at N27.12 billion in 257 deals. It was immediately followed by 9.92% FGN January 2012 with a traded volume of 30.6 million units valued at N32.01 billion in 297 deals. Fifteen (15) of the available thirty-six (36) FGN Bonds were traded during the week under review compared with sixteen (16) in the preceding week.

Market outlook

Prior to the strong support on the last trading day of the week, the market was already on a short pull back and traders were already setting for sell-off in order to hold 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 once again expect short pull back as bargain hunters may take profit at any prompt signal. Whichever way it is viewed, cautious positioning should be every trader’s watchword.

CORPORATE REPORTS FOR THE WEEK ENDED

Dangote Cement Plc

Dangote Cement Plc emerged from the recent merger between Dangote Cement Plc (DCP), formerly known as Obajana Cement Plc, and Benue Cement Company Plc (BCC). The merger was made possible as result of majority stake held by Dangote Industries Limited (Dangote Group) in the two companies. In a nutshell, DIL interest in DCP and BCC are 99.14% and 74.77% respectively. The post merger Dangote Cement Plc now has an authorized share capital of N10 million, divided into 20 million ordinary shares of 50 kobo each. The merger assumption for BCC’s shareholders states as follow: (1) that every 2 existing shares of BCC prior to the merger becomes 1 share. (2)

That the price of BCC (N67.50) as at the time it was place on technical suspension (prior to the merger) is now multiplied by 2 to give the current price of DCP (N135).

DCP is billed to be listed on Tuesday, October 26, 2010, in simultaneous with its special sales of 100 million ordinary shares of 50 kobo at N135 each.

In readiness for the listing and the special sales offer, the directors of DCP last week reported its unaudited third quarter results for the period ended September 30, 2010. Analysis on the results revealed improved growth over similar period of 2010.

Turnover (TO) grew by 60.53% at N146.56 billion while both PBT and PAT went up by 63.93% at N76.93 billion and 66.82% at N75.30 billion respectively.

Further analysis revealed that Q3 EPS currently stands at 375 kobo resulting to earnings yield of 2.79%. Net profit margin is 51.38%. DCP currently sells at PE multiple of 35.86.

Giving weight to the special sales offer, DCP’s Board of Directors is recommending an interim dividend of N2.00 per share. The closure date is November 17, 2010 while payment date is November 30, 2010.

Wema Bank Plc

The directors of Wema Bank Plc last week reported its unaudited third quarter results for the period ended September 30, 2010. Scorecards showed re-awaking in Wema Bank, with a strong turnaround in the bottom line. Despite improved growth at the bottom line, the report remained mixed, with turnover dipping by 4.75% at N24.09 billion against N25.29 billion in Q3, 2009. Wema Bank’s return from the woods received a boost by PAT growth of 105.5% at N1.64 billion, against loss after tax of N29.73 billion in similar period 2009.

Additional analysis shows that ratios indicators are trickling in positive figures. Q3 EPS stands at 16 kobo, creating an earnings yield of 17%.

At current 93 kobo market price, PE multiple of 5.87 was generated. Stakeholders’ equity (ROE) returned 4% while net profit margin of 6.79% was equally generated. The coast is still gloomy for Wema Bank as it operates with net liability of N43.90 billion.