Nigerian Insurers’ share price Year-to-Date on NSE
by Endurance Okafor
February 26, 2018 | 1:37 am| | | Start Conversation
Nigerian quoted insurance firms with stock price less than N0.50 are the worst performers on the Nigerian Stock Exchange (NSE) so far in 2018.
A stock is said to underperform if it produces a worse return than an index or the overall stock market
BusinessDay analysis revealed eleven of the listed insurance firms had their Year-to-Date return not just less than the NSE All Share Index (ASI) of 11.32 percent but was at the negative trajectory, as at the close of market for as at Friday last week.
The insurance companies that were surveyed includes; Cornerstone Insurance Plc with a share price of N0.43 and YTD return of -14 percent, Equity Assurance Plc share price was N0.40 with YtD return of -20 percent.
Also, Lasaco Insurance Plc, Standard Alliance Plc, Regency Alliance Plc, Mutual Benefits Assurance Plc, Niger Insurance Plc, Prestige Assurance Plc, Africa Alliance Plc, Soveriegn Trust Plc and Unity Kapital Assurance Plc had both share price and YtD return of N0.33 & -34 percent, N0.48 & -4 percent, N0.48 &-4percent, N0.48 &-4percent, 0.46 &-8percent, N0.47 & -6 percent, N0.42K & -16percent, N0.48 & -4 percent, and N0.37 & -26percent respectively .
Before now, a stock could not drop below its N050 par value, even if the owner was willing to sell below that price just to cash out. However, stocks became exposed to low valuation when NSE removed the decades-old par value price floor of 50K.
The NSE introduced new pricing methodology and par value rule, which was approved by the Securities and Exchange Commission (SEC) and it became effective from Monday, January 29 2018.
The policy specifies that the price of every share listed on The Exchange shall be determined by the market forces and equities may now trade below the erstwhile price floor of fifty Kobo (N0.50) per unit and as such, the removal of price floor is expected that investors have better opportunities to dispose of stocks that they have held for far too long because of the price floor.
Meanwhile, other insurance companies like AIICO Insurance Plc, Mansard Insurance Plc (formerly known as GTAssure), Linkage Assurance Plc and N.E.M Insurance Plc had their share price above 50K and also their YtD return outperforming the NSE All-Share index of 11.32 percent.
AIICO Insurance Plc had its share price at 75K and a YtD return of 44.23 percent, Mansard Insurance Plc, Linkage Assurance Plc and N.E.M Insurance Plc had both their share price and YtD return of 2.75K &42.49 percent, 92K & 39.39 percent and 1.9K & 14.46 percent respectively, as at market close Friday 23 February 2018.
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