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Performances on the
floor of the Nigerian Stock Exchange (NSE) during the week were mixed,
as the NSE All-Share Index (ASI) had three bullish days and two days
bow to the bear’s call. The bull(s) return during the previous week was
strong and boosted investors’ portfolio to appreciable profit levels.
This in-turn led to short profit taking activities, which saw the
market down between the third and fourth trading day of the week.

In all, NSE ASI
wrapped up the week slightly above the opening point by 3.17% or 721.81
points to close at 23,772.40 points, from 23,050.59. Market
capitalization closed at N5.825 trillion.

Four of the five
sectoral indicators closed the week above their various opening
figures. NSE-Food/Beverages were up by 17.28 points or 2.43% and close
with 735.30. NSE-Banking appreciated by 17.35 points or 5.2%,
NSE-Insurance headed north by 13.63 points or 9.3% at 154.87.

NSE 30 gained 30.54 points or 3.19% to close at 1,007.34, while NSE-Oil/Gas dipped by 4.96 points or 1.51% to close at 154.87.

Activities review

The stock market
recorded a turnover of 2.05 billion shares valued at N18 billion. The
said volume was moved in 28,785 transactions. The banking sector top
volume performance with 1.15 billion shares that were boosted by volume
on the shares of Diamond Bank, Access Bank, Guaranty Trust Bank, First
Bank of Nigeria Plc, and First City Monument Bank Plc. The insurance
subsector followed on the performance chart with 372.43 million shares
traded in 971 transactions.

The 47 stocks that
appreciated traded a total of1.277 billion shares, same as 62.33% of
market volume, 31 equities dipped and they moved 325.58 million units
of shares that accounted for 16% of total volume traded on all equities
through the week. Meanwhile, 123 companies ended the week’s
transactions on a flat note; volume traded by those stocks is
equivalent to 21.78% of the total market volume.

Technical view

R-squared, a
measure of portfolio performance, is currently at an extreme low. This
indicates that there is no strong trend in-tact. This value should
increase soon. When it does, there is likely to be a new short term
trend. The current slope of the close is positive, moving higher,
indicating strength of the medium term uptrend.

The standard error
is 565.237; at this level, there is much higher than normal volatility
around the current trend and traders are probably not in general
agreement, not allowing the indicator to trend easily. The price is
probably not following the regression slope well.

Report on the OTC market for FGN Bonds

A total turnover of
248.9 million units valued at N243.41 billion in 1,940 deals was
transacted last week, in contrast to a total of 332.8 million units
worth N317.95 billion exchanged in 2,864 deals during the week ended
Wednesday, September 29, 2010.

The most active
bond (measured by turnover volume) was the 10.00% FGN July 2030 series,
with a traded volume of 44.9 million units valued at N37.78 billion in
383 deals. This was immediately followed by 10.5% FGN May 2012 series,
with a traded volume of 43.3 million units valued at N46.65 billion in
388 deals.

Seventeen (17) of
the available thirty-six (36) FGN Bonds were traded last week, compared
with eleven (11) recorded a fortnight ago.

Corporate actions reported in the week ended

In the week under
review, the market witnessed avalanche of reported audited results for
belated period ended December 31, 2010. Few were for the periods ended
March 31, 2010 (Neimeth Int’l Plc & Chellarams Plc) and July 31,
2010 (Ellah Lakes Plc).

These results were
released in an effort to beat Nigerian Stock Exchange (NSE) hammer on
quoted companies that are yet to report their audited results for
period ended December 31, 2009. Analysis of few of the results is shown
below, while lead operations figures are reflected in the table below.

NIEMETH INT’L PLC

Neimeth Int’l Plc,
a healthcare company with specialty in production and marketing of
pharmaceutical products released its Q4 results for FY ended March 31,
2010.

Close observation
and computations of figures revealed that the company remained in the
wood. Gross revenue (TO) only managed a fractional growth of 1.2% at
N1.89 billion, against N1.87 billion in comparable period 2009.

On the profit line,
all other indicators returned negative figures. Both PBT and PAT
declined by 71% and 72.3% respectively. This resulted to negative
earnings, meaning the company will recourse to its reserve to finance
its major activities in the current fiscal year (2010/2011). Figures
computed at this instance were: loss per share (LPS) 7 kobo, loss
(profit) margin of 6.67%.

Shareholders’ equity equally lost 11.3% from N1.072 billion, in a similar period 2009.

Observation: This is a poor corporate performance. It has been consolidated for the second time in a row.

Dividend payment will not be considered here. We do not expect price appreciation on this stock in meantime.

STACO INSURANCE PLC

Indemnity covering
company, Staco Insurance Plc, joined league of companies that made
their corporate files available in the market last week. Though this
belated Q4 report saw manageable growth at the top line, it turned
mixed and docile at the bottom line. Turnover recorded improved growth
of 15.6% at N5.06 billion over N4.38 billion posted in similar period
2008.

Profitability
indexes returned lower figures, compared to 2008. PBT dipped by 13.6%
at N538.41 million, so was PAT with 20.1% dip over N546.42 million in
2008. As the bottom lines dipped, computed earnings ratios equally
reflected lower figures. EPS lost 25% of its 10 kobo in FY 2008 at FY
2009’s 8 kobo. This resulted to earning yield of 16%.

PE multiple of 6.25 appears attractive. Return on stakeholder equity (ROE) is 9% while profit margin stood at 8.6%.

Observation:
Performances wise, bottom lines fared poor against FY 2008 figures.
Recall that in FY 2008, the company paid 2 kobo and 1 for 10 bonus
incentive. If at all anything will be paid here, it will be cash
dividend. But the directors have not disclosed anything yet.

The stock looks attractive at its current price, only that the insurance industry remains a skeptic zone for now.