“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 29th 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
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