Recent trading activities at the Nigerian Stock Exchange (NSE) have shown that capital market investors are showing more interest in some bank shares despite the anxiety in the sector.
Analysis of transactions in the banking subsector of listed equities showed that the shares of some banks such as United Bank for Africa, Guaranty Trust Bank, First Bank, Zenith Bank; and some rescued banks - PHB, Intercontinental and Wema, have continued as the most traded stocks in the past five trading days.
At the close of Wednesday’s trading, First Bank, First City Monument Bank, PHB, Intercontinental Bank, and Guaranty Trust Bank were the most traded stocks. The total volume of 118.32 million units valued at N1.05 billion traded in the shares of the five stocks accounted for 49.01 per cent of the entire market volume while their value represented 47.45 per cent of the whole market value.
The Banking subsector, yesterday, led as the most active subsector with 186.40 million units worth N1.47billion as against the 223.69 million units valued at N1.28billion recorded on Tuesday.
Government intervention
Market watchers say the motivation behind investors’ interest in the banking stocks could be attributed to government’s efforts to buy toxic assets in the banking industry through the Asset Management Corporation of Nigeria (AMCON).
Dimeji Akintayo, head research team at Resource Cap, a business advisory company, said although few individual investors are positioning themselves in some banks’ shares because “AMCON has come to the rescue” of the banking sector, “the real funds driving volume in the sector are actually coming from portfolio managers who are the main profit takers in the market.”
A research team at Access Bank recently said the sector is becoming attractive because banks’ stocks “appears to be generally under-valued especially with improvements in corporate profits of some companies.” “We maintain that the relatively low share prices of most stocks will lead to another round of appreciation in the All-Share Index. With AMCON expected to buy up banks’ toxic assets in first quarter 2011, we believe that renewed interest in banks’ equities would engender rebound in the index, though with occasional profit taking by weary investors,” they said.
Market rebounds
Meanwhile, at the close of Wednesday’s trading, the NSE’s market capitalisation, which recorded N3 billion losses on Tuesday, gained over N58 billion or 0.74 per cent increase to close at N7.856 trillion from N7.798 trillion. A total of 36 stocks appreciated in price on Wednesday, while 20 stocks depreciated. Guinness Nigeria and Africa Petroleum topped the price gainers’ table with an increase of N8.75 and 95 kobo on their opening prices of N180.25 and N20.95 per share respectively. UAC Nigeria and United Bank for Africa followed in the chart with an increase of 62 kobo and 35 kobo, to close at N38.30 and N8.90 per share.
On the flip side, Ashaka Cement and Eterna Oil led the price losers’ chart with a loss of N1.00 and 18 kobo, to close at N27.50 and N5.00 per share. Costain West Africa and Nigeria and Nigerian Aviation Handling Company followed with a decrease of 16 kobo and 13 kobo on their initial prices of N6.56 and N6.13 per share.
Source:http://234next.com/
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