Banking Stocks Enjoy Positive Sentiments Despite Return of Bears

The depreciation recorded in the share prices of companies such as Dangote Cement Plc, Flour Mills of Nigeria, Nigerian Breweries Plc attracted pushed the market into the negative territory today after redounding yesterday.

Bellwether counters had lifted the market yesterday. But that positive performance could not be sustained today as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell by 0.46 per cent to close lower at 32,963.27. Market capitalisation shed N55.2 billion to be at N12.0 trillion.

A total of 23 stocks depreciated as against 17 that appreciated. “We attribute the losses recorded today to prevailing negative sentiment across all sectors asides the banking sector. Nonetheless, we expect a positive close to the market at the end of the week, as investors take advantage of the low prices across the various sectors in the market,” at Meristem Securities Limited said.

However, amidst the bearish trading, the banking sector attracted positive sentiments from investors which led to appreciation in five stocks. They are Zenith Bank Plc, Union Bank of Nigeria Plc , Guaranty Trust Bank Plc and United Bank for Africa Plc that went up by 4.6 per cent, 3.9 per cent, 3.0 per cent, 1.3 per cent and 0.6 per cent in that order. Berger Paints Nigeria Plc led the price losers with 10 per cent, trailed by Prestige Assurance Plc with 9.8 per cent. Royal Exchange Assurance Plc shed 9.0 per cent.

Berger Paints shares witnessed a decline two days after the management of the company visited the NSE to present its fact behind the figures. During the presentation to market operators, the Managing Director and Chief Executive Officer of the company, Mr. Peter Folikwe identified top-notch and experienced management, high quality products, efficient market and strong distribution network, effective utilisation of modern information technology and strong brands as some of the factors that enhance the company’s competitive edge. Folikwe also noted that effective franchise growth and deployment of point of sales (POS) machine were among the key drivers that shall boost the company’s profitability.

Commenting on the strategic outlook for the company, he explained that the focus would be on increase in earnings and profitability,leverage on the new automated factory to be inaugurated, increased production output, increase in market share, optimising return on investment (ROI) and implementation of risk management culture among others.