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Investors in insurance stocks record best cummulative returns
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L-R: Remi Babalola, minister of state for finance; Hajara Adeola, managing director, Lotus Capital, and Aliko Dangote, chairman, Dangote Group, after a completion board meeting of Lotus Capital.
Companies quoted in the insurance sub-sector of the Nigerian Stock Exchange posted the highest cumulative returns on investments at the end of the year 2007 investigations have shown.
Business Day checks revealed that all the 24 companies quoted in the insurance sub-sector posted total returns of 4,474.5 percent ahead of the 22 banks on the exchange. The banks posted cumulative returns of 4,037.1 percent.
However, the banks were ahead in terms of overall volume of shares sold with 77.588 billion shares sold during the period, while investors bought a total of 24.557 billion insurance shares.
The paucity of shares in the petroleum marketing sub-sector apparently underpinned the rise in prices of the shares as cumulative returns stood at 4,032.73 shares whereas investors bought a total of 1.237 billion shares.
Further analysis shows that Mutual Benefits Assurance plc posted the highest returns in the insurance sector with 516.67 percent having moved from N0.72 to N4.41 per share, followed by Guinea Insurance with 430.30 percent. Guinea Insurance rose from a low of N0.66 to a new high of N3.50 per share.
In the banking sub-sector, Fidelity Bank plc led in terms of total returns to shareholders with 457.7 percent and a capital appreciation of 450.23 percent. The stock had moved from a low of N2.15 to N11.83. First City Monument Bank plc followed with 374.1 percent return on investment and a capital appreciation of 366.17 percent.
Also, Wema Bank which rose from N3.2 to N15.00 per share with cumulative return of 368.75 percent was third on the list of market performers.
However, Afroil plc, quoted in the petroleum sub-sector, was the best performer during the year having posted 3,152.94 percent in terms of return on investment. The stock moved from a low of N0.34 to close the year at N11.06 just as investors bought a total of 170.668 million shares.
Results from insurance companies that have been confirmed to have scaled the consolidation hurdle made the stocks among the stand out features in the market during the year.
The share prices of most companies in the insurance sub-sector continued to spike as investors piled into them following interim results which analysts considered as impressive.
“The stocks have shown prospects for growth after the consolidation exercise and the results further confirmed that those who put money in these stocks would reap in the medium to long term,” said Abiye Karibi-Whyte, a stockbroker at the exchange.
Indeed, the general belief is that the insurance firms will post strong results just like the bank’s post consolidation.
Besides, stockbrokers say insurance stocks are bound to grow this year as some of the companies prepare for the second round of recapitalisation albeit voluntarily. It would be recalled that AIICO Insurance recently came to the market for more funds while Oasis Insurance has concluded arrangements to hold an extra ordinary general meeting (EGM) with a view to raise authorised share capital from N3 billion to N5 billion by the addition of N2 billion divided into four billion ordinary shares of 50 kobo each.
Thereafter, informed sources disclosed that the company intends to raise money from the market either by way of rights issue or public offer.
However, the banks were ahead in terms of overall volume of shares sold with 77.588 billion shares sold during the period, while investors bought a total of 24.557 billion insurance shares.
The paucity of shares in the petroleum marketing sub-sector apparently underpinned the rise in prices of the shares as cumulative returns stood at 4,032.73 shares whereas investors bought a total of 1.237 billion shares.
Further analysis shows that Mutual Benefits Assurance plc posted the highest returns in the insurance sector with 516.67 percent having moved from N0.72 to N4.41 per share, followed by Guinea Insurance with 430.30 percent. Guinea Insurance rose from a low of N0.66 to a new high of N3.50 per share.
In the banking sub-sector, Fidelity Bank plc led in terms of total returns to shareholders with 457.7 percent and a capital appreciation of 450.23 percent. The stock had moved from a low of N2.15 to N11.83. First City Monument Bank plc followed with 374.1 percent return on investment and a capital appreciation of 366.17 percent.
Also, Wema Bank which rose from N3.2 to N15.00 per share with cumulative return of 368.75 percent was third on the list of market performers.
However, Afroil plc, quoted in the petroleum sub-sector, was the best performer during the year having posted 3,152.94 percent in terms of return on investment. The stock moved from a low of N0.34 to close the year at N11.06 just as investors bought a total of 170.668 million shares.
Results from insurance companies that have been confirmed to have scaled the consolidation hurdle made the stocks among the stand out features in the market during the year.
The share prices of most companies in the insurance sub-sector continued to spike as investors piled into them following interim results which analysts considered as impressive.
“The stocks have shown prospects for growth after the consolidation exercise and the results further confirmed that those who put money in these stocks would reap in the medium to long term,” said Abiye Karibi-Whyte, a stockbroker at the exchange.
Indeed, the general belief is that the insurance firms will post strong results just like the bank’s post consolidation.
Besides, stockbrokers say insurance stocks are bound to grow this year as some of the companies prepare for the second round of recapitalisation albeit voluntarily. It would be recalled that AIICO Insurance recently came to the market for more funds while Oasis Insurance has concluded arrangements to hold an extra ordinary general meeting (EGM) with a view to raise authorised share capital from N3 billion to N5 billion by the addition of N2 billion divided into four billion ordinary shares of 50 kobo each.
Thereafter, informed sources disclosed that the company intends to raise money from the market either by way of rights issue or public offer.
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