Nigeria Content Online

Market overview

There is clearly an
increased interest in investing in the stock market. Last week, the
market attracted mixed sentiments. The market opened the week upbeat,
cheered by investors pouring in money on shares, as the market is
attractively placed in terms of liquidity of stocks, expected
profitability, positive earnings of companies and depth of the stock
market. At the close of trade on Monday, the market closed higher,
taking cues from the gains recorded in the previous weeks.
However, selling
pressure was witnessed on Tuesday and Wednesday and as profit booking
intensified, the indices failed to sustain momentum and started
drifting lower.

Nonetheless, as share prices start to overheat during
the bull run, profit-taking cycles provided an opportunity to pick up
shares on the dip. The profit-taking created by selling pressure on
blue chips created buying opportunities on the lower cap shares. The
market turned around on the fourth day (Thursday), gaining 0.31%. The
bull session continued till Friday during which the market
capitalization closed the week at N6.77 trillion.
Creditably,
investors have continued to take position in shares of companies that
have robust cash flow and less dependence on bank credit. Largely,
market rebounds have been attributed to trading activities in these
various sub-sectors- food and beverage, building materials, insurance
and stable banks.

The capital gain derived from investments in these
sub-sectors and many more has continued to sustain investors drive in
the market.
Going forward,
there are expectation that the stock market will maintain upward trend
in the weeks ahead if the rising investors’ confidence and earnings
from the quoted companies are sustained coupled with the recently
passed bill by the National Assembly for the establishment of Assets
Management Company (AMC) which expected to take off and buy out the
toxic assets of the rescued banks. Also, Strong fundamentals of blue
chips stocks are poised to attract more institutional and retail
investors in the weeks ahead. Therefore we tend to think that the rise
in stock markets is not purely a speculative phenomenon, but is also
backed by fundamentals. We strongly believe that the diversified income
base and improved socio-economic scenario will help in keeping the
stock market upbeat for an extended period of time.
During the week,
the NSE AS Index rose by 288.60 points or 2.69% to close at 27,988.71
basis points. The market witnessed a dip, resulting in depreciation in
turnover volume and value of shares traded during the week. Both the
volume and value depreciated by 4.29% and 27.46% respectively. By
Thursday, the market had gone back to its upward movement with the
market capitalization adding N69.80 billion to close the week higher
N6.77 trillion. See 1 and 2

Most Active Sector

The Banking sub
-sector remain the most active (measured in terms of traded volume) as
it recorded 1.04 billion shares valued at N11.72 billion exchanged in
22,230 deals while the Insurance sub -sector was second with traded
volume of 1.20 billion shares valued at N1.10 billion.

Gainers and Losers

During the week, 65
stocks appreciated in price, while 37 stocks depreciated in price.
Below are the tables showing top 10 gainers and losers for the week .
See table 3 and 4
Corporate actions and results
Oando Plc released
its full year trading result to the floor of the Nigerian Stock
Exchange in the past week. The company, which has 905,084,628 units of
shares outstanding, declared a Turnover of N336.859 billion and a
Profit after Tax of N10.096 billion. The Directors are recommending a
dividend of N3.00 and a bonus of 1 for 2 units of shares held.
In the same vein,
Julius Berger audited financial report for the year ended 31 December,
2009 was also released on the floor of NSE today. The Directors
proposed final dividend of N2.40 per share. Closure date is 25 June,
2010 and payment date is 8 July, 2010.

Market outlook

The current trend
will be sustained in view of liquidity of stocks, expected
profitability, positive earnings of companies and depth of the stock
market. The attractiveness of the market which stems mostly from the
liquidity in the stocks will prevail on investors to focus on certain
sub-sectors amongst which are building materials, food and beverage,
conglomerates, banking, and insurance in view of its profitable core
business.