Monday, 13 October 2014

Nigeria: Investors Reap Returns above 50% in Six Stocks

Despite the lacklustre performance of the Nigerian equities market so far this year, about six companies have fetched their investors capital appreciation of over 50 per cent, THISDAY investigations have revealed
The aggregate growth of the equities market measured by the Nigerian Stock Exchange (NSE) All-Share Index (ASI) posted a negative return of 2.14 per cent as at last Friday. While some stocks have recorded declines below that the ASI level, THISDAY  analysis of the performance of the market showed that investors in six companies have reaped growth between 52 per cent and 442 per cent.
The six stocks are Premier Breweries Plc, Ikeja Hotels Plc, Forte Oil Plc, Seven-Up Bottling Company Plc, Custodian and Allied Plc and Ashaka Cement Plc.
Premier Breweries Plc led with the highest capital appreciation of 442 per cent as the equity grew from N0.77 at the beginning of the year to N4.18 as at last Friday. However, market analysts have attribute the unprecedented growth in the stock to speculative trading as no significant transformation has occurred in  the company to warrant the surge in price.
Ikeja Hotel Plc surged by 241 per cent, rising from N0.78 to close at N2.66. Also, the price surge has been based majorly on speculative trading.

However, Forte Oil Plc, which closed last year with the highest capital growth, continued its bullish trend this year and has recorded a capital appreciation of 125 per cent so far. The stock rose from N97.75 at the beginning of the year to N220.50 per share.
The petroleum marketing company has witnessed a significant transformation in recent times, bouncing from losses to profitability.  The company surprised shareholders and market operators with a dividend of N4 for the 2013.  The company has also given indication for higher financial performance in 2014, having posted 152 per cent growth in profit before tax (PAT) for the half year results ended June 30, 2014. Forte PAT’s from N1.664 billion to N4.191billion, while profit after tax stood jumped from N1.394 billion to N3.134 billion.
Seven-Up Bottling Company Plc recorded a capital appreciation of 107 per cent, rising from N71.40 to N147.73 per share. Custodian and Allied Plc fetched investors 91 per cent as the stock grew from N2.07 to N3.98.
Custodian and Allied announced a 100 per cent growth in profit in 2014 half year results and recommended an interim dividend six kobo.
According to  the  company,  the  100 profit growth represents its unwavering customer focus, comprehensive systems, processes and operations integration  coupled with unrelenting commitment to its corporate ideal of exceeding customers and other stakeholders’ expectations at all times.
Also, Ashaka Cement Plc fetched investors return of 52 per cent, growing from N20.99 to N32 per share. The shares of Ashaka Cement attracted renewed demand recently after Lafarge Africa Plc acquired more shares in the company under the business consolidation of Lafarge Group in Africa.
Lafarge acquired additional shareholding in Ashaka Cement by increasing its stake in the company from 50.16 per cent to approximately 58.6 per cent as part of efforts to enhance cement production in the country.
Lafarge had explained that the acquisition confirmed its belief in the potential of AshakaCem and reinforced its commitment to the economic development of Nigeria.
“Lafarge will continue investing more time and expertise in further supporting AshakaCem’s leadership in the North of Nigeria – for example enhancing service for customers, increasing production volumes to meet the growing demand for cement, delivering additional value for shareholders and further developing the skills of our employees,” the company said.
These words of assurance and commitments made more investors increased demand for the stock, which impacted the share price.
Source: ThisDayLive

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