10 high priced stocks control 53.8% of equities
Ten out of 199 equities listed on the Nigerian Stock Exchange (NSE), classified as high priced stocks due to their high share price, control 53.8 per cent of the market transaction, According to Daily Trust investigation.
These high priced stocks are securities that have traded an average of N100 or more per share in four out of the last six months period.
The stocks are Lafarge Cement WAPCO Nigeria Plc which joined the league of ten high priced stocks last week, Dangote Cement Plc which is the most capitalized stock, Guinness Nigeria Plc, Nestle Nigeria Plc, Nigerian Breweries Plc, SIM Capital Fund, Skye Shelter Fund, Nigerian Energy Sector Fund (NESF) and Total Plc.
Analysis by Daily Trust revealed that the ten stocks control most of the market transaction which on many occasions determined the trend of the market.
Head, Market Operations of the NSE, Mr. Ade Ewuosho, said that to move the price of any stock upwards or downwards, the brokers needed to have a volume of 50,000 shares and above.
However, in September 2012, the exchange introduced a pilot programme for its new market structure with the rollout of market making, where stockbrokers could move prices of some high priced stocks with 10,000 shares.
Reacting to the incident at the end of last week trading, a stockbroker said a situation whereby less than ten stocks controlled almost 200 stocks listed on the bourse, regardless of their performance, was not good enough.
He said the general outlook of the market improved when compared with the previous week, despite the bearish recorded during the week
“Drop in high price stock, such as Dangote Cement, Nestle Nigeria and Seplat dragged market down, when few stocks determine the fate of the entire market that is the kind of result you will see”.
He said, however, that “there is hope in the market going forward because banking stocks are going up now”.
Banking sector controls the market, he said, adding that the apathy in this sector during the first quarter of the year put the entire market down.