Are these buying times?

“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.” – Warren Buffet, arguably the most successful investor of our time.

One’s thought may be very far from Warren’s quote as a number of investors have lost quite a lot of money recently due to the current state of the Nigerian equity market. The value of most portfolios have declined greatly as one-year All-Share-Index stands at -25.02%, this means that the average value of shares prices of all companies on the exchange has declined by 25.02% from prices as at 29^th July 2014. 

However, it is important to ring aloud this ‘words of wisdom’ as it holds true for the current market trend; market counters, especially those in the Banking sector (please see attached report on Banks’ profitability), are drawing very near  their 52-week low, and in some cases more than 50% away from their 52-week high. The table below shows a few of these companies share price performance :

Company	Current Price	52wk low	52wk high	Variance from current price
Transcorp	2.13	2.02	7.08	-232%
Flourmill	28.98	26.6	73.55	-154%
Oando	12.42	11.53	29.3	-136%
Access Bank	4.91	4.5	9.47	-93%
FBNH	7.5	5.77	14.11	-88%
Diamond Bank	3.8	3.45	6.76	-78%
Int.Breweries	18.24	17.02	32	-75%
Nascon	6.37	5.68	10.94	-72%
Zenith	16.5	14.54	25.8	-56%
Skye Bank	2.02	1.62	3.13	-55%
Stanbic	22.5	22.71	34.86	-55%
UBN	7.79	6.48	11.74	-51%
UACN	41.5	26	62.4	-50%
Fidelity	1.55	1.13	2.27	-46%
GTB	24.2	16.69	31.88	-32%
Sterling Bank	2.14	1.96	2.54	-19%
ETI	19.5	13.1	23.02	-18%

If you didn’t take positions during the sell-down in February (see below chart), this is another opportunity to take advantage of current weakness in stock prices with focus on a medium to long term horizon.

Investors who simply wish to minimise downside risk on their global portfolios can also invest through our  money market funds below:

1.       Fund Investment Product (US Dollar) Bond Notes - The Notes will invest in fixed income securities issued by sovereigns, supranational bodies and corporations, with a bias for African debt issuers.

2.      Legacy Short Maturity (NGN) Fund – A low-risk Fund that seeks to preserve capital and generate stable income by investing in safe, short maturity securities. Indicative annual return on the Fund is between 12-13%

Please feel free to contact us via cslservice@fcmb.com or call our direct lines 01-2713920(3); 01-2714834 for further information:

Thank you for your continued patronage

The equity market today

NSE… In the absence of active buying activity, the Nigerian Equity market tanked further at today’s session. Heavy throbbing in large caps: FBNH(-3.73%), Guinness(-1.73%), GTB(-1.73%) and Nig.Brew.(-0.83%) pushed the benchmark index further southward. Most sectoral indices on the exchange reeled under pressure with the Insurance counters leading the pack. NSEIND and NSEOILG were the only sub-indices that closed in the green, on the backdrop of Wapco(+4.13%) and ForteOil(+1.90%) NSEASI lost 0.25% to close at 30,436.18bps. In the broad market, decliners thumped advancers 32 to 14 leaving 68 issues unchanged. Market activity level depreciated today; trades valued at N4.21bn represents 4.05% decrease from the last session. Top worst performers were Pharmadeko(N2.14), Livestock(N1.76), and Portpaint(N3.96) while Transexpr(N1.10), 7-Up(N190.00), and CCNN(N9.14) led the gainers’ list. Buying opportunities abound in highly capitalized stocks; buy into penny stocks with strong fundamentals and you may consider stocks trading below its 52yr lows NASD… The Equities market recorded a negative trend as all the stocks traded southwards thereby losing N2bn in market capitalization to close at N541bn as against N543.82bn recorded yesterday. 17deals was executed today, amongst which 14deals recorded negative price changes and 3 remaining unchanged to offer an activity level of 19,885,431units in total volumes of stocks and N78,310,932.48 in value traded.   NDEP Plc led the losers pack to record a price difference of -N4.01 to close at N149.99, Friesland Campina WAMCO Plc followed by losing -N1.10k to close at N298.90k, Partnership Plc  lost -0.15k, while Trustbond  Plc and CSCS Plc  both lost -0.07k and -0.01k. For the unchanged prices; Cappa & Dalberto Plc, Food Concepts Plc, and IGI Plc closed at N79.00, 0.85k, and 0.50k respectively. As for volumes; CSCS Plc traded 13,051,931units, Partnership Investment Plc traded 6,821,000units to record the highest volumes traded for the day. Clearly we still maintain a neutral stand even as we expect more long term bargain hunting trades from investors. For more information on the market report click here.