[2008-05-05]  Stocks, indices defy corporate results as shareholders approve AP's merger plan
DESPITE the improved results announced by some blue chip companies last week, corporate performance indices recorded further decline by 2.11 per cent due mainly to continuous profit taking by investors in the equities sector of the Nigerian Stock Exchange.

Specifically, the All-share index dipped by 2.11 per cent to close on Friday at 59, 124.87 points, while market capitalisation of the 203 first-tier equities closed lower at N11.43 trillion.

Though six equities were adjusted for dividend and/or bonus issues as recommended by the board of directors, the market did not generally react to favourable corporate results by companies.

For instance, Total Nigeria Plc was adjusted for final dividend of N6.40 per share, while Mobil Oil Nigeria Plc was adjusted for dividend of N4.70 per share.

Transnationwide Express Plc was adjusted for dividend of 10 kobo per share, while Nigerian Aviation Handling Company Plc was adjusted for a dividend of 30 kobo per share and a bonus of one for eight. Airline Services and Logistics was also adjusted for a dividend of five kobo per share, and BOC Gases Plc was adjusted for dividend of 22 kobo per share.

In another development, a supplementary listing was done on Mobil Oil Plc as 60 million shares were added to the shares outstanding in the name of the company following the bonus of one for four, while 109.37 million shares were added to the shares outstanding in the name of Nigerian Aviation Handling Company Plc following the bonus of one for eight.

Despite the profit taking exercise in form of dividend and bonus issues last week, market watchers said that investors were still taking other profits made earlier in the year in terms of capital appreciation by some stocks.

However, the market ought to react positively to some corporate results released last week, which is what usually happen in the past. It did not happen last week.

By the results released by Ecobank Transnational Incorporated (ETI) last week, the directors recommended a dividend of two kobo per share.

Also, Ecobank Nigeria Plc's gross earnings rose from N17.3 billion in 2006 to N32.71 billion in 2007, culminating in an after tax profit of N7.45 billion up from N3.6 billion in 2006. The directors have recommended a dividend of 24 kobo per share.

Similarly, Unilever Nigeria Plc posted an after tax profit of N1.1 billion in the first quarter ended March 31, 2008 over N300 million in 2007, on a turnover, which rose from N8.3 billion to N9.7 billion.

RT Briscoe Plc also recommend an after tax profit of N181.94 million in its first quarter ended March 31, 2008 over N149.53 million in 2007, on a turnover which rose from N3.84 billion to N4.35 billion.

There were other favourable results last week, but the market was yet to react to the results.

However, investors interest in the shares of some major banks last week enhanced the volume of stocks traded as a turnover of 2.63 billion worth N47.6 billion was exchanged in 66,373 deals higher than 2.6 billion units valued at N48.3 billion exchanged in 80,499 deals in the preceding week.

Precisely, the banking sub-sector dominated last week in volume term with 1.3 billion shares worth N34.02 billion in 30,882 deals while the insurance sub-sector followed with a turnover of 714.2 million shares valued at N2.85 billion 12,755 deals.

A review of activity in the banking sub-sector last week showed that the sub-sector was strengthened by activity in the shares of First Inland Bank Plc, United Bank for Africa Plc and Afribank Nigeria Plc, as trading in the shares of the three banks accounted for 578.53 million shares which represents 43 per cent of sub sector's turnover, while the insurance sub-sector was boosted by activity in the shares of Universal Insurance Plc.

Meanwhile corporate performance indices, the All-Share index of the Nigerian Stock Exchange dropped by 997.9 points or 1.7 per cent from 60,122.77 recorded when the market began on Monday to 59, 124.87 on Friday while market capitalisation fell by N2 billion or 1.8 per cent from N11.6 trillion to N11.4 trillion.

On the price movement chart last week, 35 stocks appreciated in price down from 60 recorded in the proceeding week with Eco bank Transnational Incorporated leading others on the gainers list with 600 kobo, to close at N244.00 per share while Total Nigeria Plc followed, adding 435 kobo, to close at N239.95 per share.

G. Cappa Plc, Oando Plc, Nigerian Breweries Plc, Dangote Flour Mills Plc, Guinness Nigeria Plc, C & I Leading Plc, Afribank Plc and Nigeria Bag Manufacturing Company Plc also added 404 kobo, 300 kobo, 299 kobo, 283 kobo, 257 kobo, 169 kobo, 155 kobo and 154 kobo.

On the other hand, 83 stocks depreciated in price last week lower than 89 witnessed in the preceding week with Mobil Oil Nigeria Plc emerging the highest price loser, shedding 5,177 kobo, to close at N248.21 per share.

West African Portland Company Plc followed on the list dropping 1,168 kobo, to close at N51.32 per share.

Other losers of last weeks trading includes Nestle Nigeria Plc, Ashaka Cement Plc, Conoil Plc, Eterna Oil & Gas Plc, Nigerian Aviation Handling Company Plc, (NAHCO), PZ Cussons Nigeria Plc, RT Briscoe Niger Plc also loss 800 kobo, 701 kobo, 525 kobo, 473 kobo, 414 kobo, 405 kobo, 375 kobo and 374 kobo.

Meanwhile, shareholders of African Petroleum Plc last week approved the company's merger plans with Zenon Petroleum and Gas Limited.

The approval was sequel to a proposition by the board of directors that they be authorised to enter into agreements and/or arrangements pursuant to the proposed merger or scheme of arrangements, amalgamation or any other consolidation arrangement of the two companies.

Another resolution passed was that the board was authorised to take steps to effect the merger of AP and Zenon subject to compliance with all necessary statutory requirements and relevant regulatory approvals.

Meanwhile, the board and Management of African Petroleum Plc (AP) last week presented the company's score cards to the Nigerian Stock Exchange and stockbrokers at the occasion of its "facts behind the figures".

In his presentation, the company's Chief Operating Officer, Mr. Tunde Falasinnu said that the company recorded an after tax profit of N5.7 billion in 2007, over N2.2 billion in 2006, on a turnover which rose from N81.9 billion to N102 billion.

Earnings per share rose from N2.74 kobo to N7.23 kobo, while dividend per share rose from N1 in 2006 to N7 in 2007 and Net asset per share rose from N3.11 to N14.99.

Amplifying further in the performance, Falarinnu said that the company placed emphasis on human capital development in 2007, while new organisation was put in place with the assistance of KPMG, a consultant, for efficient operations and focused marketing.

Besides, he added that staff were repositioned, while there was also regional and functional re-alignments, aggressive training of staff, new recruitment among others.

The company, according to him, also lamented "Operation 100 Scheme" to expand its retail outlet network, which resulted in an increase of its retail outlet from 394 to 480, representing 86 per cent of its expectation from the scheme as at March 2008.


Source: copyright@Guardian