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Stock market loses N280bn on quarterly returns, profit frenzy
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Babatunde Fashola (r), governor, Lagos State, with his predecessor, Bola Tinubu, at an event to mark the former’s 300 days in office yesterday in Lagos.
As companies with financial year ending in March call in their funds from the capital market, the stock market has lost N280-billion.
The market capitalisation shed weight from N2.593-trillion to N2.313-trillion in 13 days between March 7 and 20 2008.
Similarly, the all share index lost 3.23 points.
Stockbrokers said that these companies, mainly banks, were calling in facilities granted to investors in order to reconcile their financial account for the current year.
Such banks include Access, First Bank, Afribank, Union Homes and Wema Bank. Non-bank institutions include Cappa D’Alberto, 7UP, Flourmills, Union Homes and Poly Products. The result of the call up of funds from the market is that these companies and their clients have to offload their holdings to raise funds, leading to excess supply and fall in prices.
As of the end of trading March 7, 75 stocks depreciated in price during the week higher than the 59 in the preceding week. Stocks in four petroleum marketing companies led on the price losers, chat with Conoil plc dropping by N34.58 to close at N118.38 per share; Mobil Oil followed with a loss of N27.10 to close at N210, while Total Nigeria lost by N23. Oando followed with N20.41.
Other losers include Nestle plc with N13.12, Flour Mills of Nigeria lost N9.39, Northern Nigeria Flour Mills N8.79 and Dangote Flour Mills N7.70.
Analysts told Business Day last night that profit taking was responsible for the offloading of shares and general share price fall.
Chinenye Anyanwu, managing director, Dependable Securities, also confirmed the development and attributed it to investors who were offloading to take profit.
Management of banks under the aegis of the Bankers Committee has already adopted December 31 of every year as common financial year end to allow for uniformity of their accounts. This takes effect December this year.
Ignatius Imala, director, banking supervision, CBN, said the common year end would eliminate the difficulties encountered by rating agencies and properly assess the strength of each bank using uniform parameters within the same period instead of the previous scenario where banks presented results at different times of the year.
He said that there might be an overlap in the first year, in which case some banks might have two different audited results for full year ended March or combine 15 or 18 months’ results at the same time. The situation is expected to have levelled up by December 2009.
Analysts explained that the directive would enable easy assessment of claims by banks as to their sizes in terms of shareholders funds, assets, profits and liabilities.
However, there is fear that the new system would put pressure on external auditors who have to audit all the banks simultaneously to meet the deadline.
Similarly, the all share index lost 3.23 points.
Stockbrokers said that these companies, mainly banks, were calling in facilities granted to investors in order to reconcile their financial account for the current year.
Such banks include Access, First Bank, Afribank, Union Homes and Wema Bank. Non-bank institutions include Cappa D’Alberto, 7UP, Flourmills, Union Homes and Poly Products. The result of the call up of funds from the market is that these companies and their clients have to offload their holdings to raise funds, leading to excess supply and fall in prices.
As of the end of trading March 7, 75 stocks depreciated in price during the week higher than the 59 in the preceding week. Stocks in four petroleum marketing companies led on the price losers, chat with Conoil plc dropping by N34.58 to close at N118.38 per share; Mobil Oil followed with a loss of N27.10 to close at N210, while Total Nigeria lost by N23. Oando followed with N20.41.
Other losers include Nestle plc with N13.12, Flour Mills of Nigeria lost N9.39, Northern Nigeria Flour Mills N8.79 and Dangote Flour Mills N7.70.
Analysts told Business Day last night that profit taking was responsible for the offloading of shares and general share price fall.
Chinenye Anyanwu, managing director, Dependable Securities, also confirmed the development and attributed it to investors who were offloading to take profit.
Management of banks under the aegis of the Bankers Committee has already adopted December 31 of every year as common financial year end to allow for uniformity of their accounts. This takes effect December this year.
Ignatius Imala, director, banking supervision, CBN, said the common year end would eliminate the difficulties encountered by rating agencies and properly assess the strength of each bank using uniform parameters within the same period instead of the previous scenario where banks presented results at different times of the year.
He said that there might be an overlap in the first year, in which case some banks might have two different audited results for full year ended March or combine 15 or 18 months’ results at the same time. The situation is expected to have levelled up by December 2009.
Analysts explained that the directive would enable easy assessment of claims by banks as to their sizes in terms of shareholders funds, assets, profits and liabilities.
However, there is fear that the new system would put pressure on external auditors who have to audit all the banks simultaneously to meet the deadline.
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