Tag: capitalisation

The 13 power generation and distribution companies could push the market capitalisation from N11.58 trillion to about N35 trillion if they eventually approach the market for fund, the Managing Director, Bgl Securities Limited, Sunday Adebola has said.

He spoke against the backdrop of the recommendation by the National Council on Privatisation (NCP) that the firms should approach the capital market for funds, among other strategies for growth.

He said: “If the Power Holding Company of Nigeria (PHCN) successor companies can pay $559,446.773 to the government, they can push the market capitalisation further to N35trillion, given the fact that the market is deep enough to carry out big-ticket transactions.

“Let say 10 of the companies approach the market for fund, and each of them contributes N2trillion to the market, that is N20 trillion. When you add N11 trillion and N20trillion, that is N31trillion. However, this is based on the ability of the government to facilitate the listing of the firms by putting in place an enabling environment.”

He urged the government to provide strong co-operation to guarantee investments, adding that the Pension Commission (PenCom) and the Pension Fund Administrators (PFAs) need to be involved to make the coming of the firms to the market easier.

“PenCom should be allowed to invest in the power firms through the PFAs. When PenCom give investment waivers to the PFAs, it would be easier for the firms to raise finds from the market. The only institution that can bring long-term investments is the PFAs. Most of the investments in power firms are long-term, which is the core business area of PenCom.  Investments in traded securities help in providing funds to bridge infrastructural gaps, of which power is one of them,” he added.

Adebola said investors would like to take a product that offers higher level of comfort, noting that policy changes have destroyed many noble ideas in the country.

He said former President Olusegun Obasanjo’s decision to privatise the refineries was halted by the late President Umaru Yar’ Adua.

Stocks on the Nigerian Stock Exchange rallied on last week to prevent the equity market from falling for the seventh consecutive session.

At the end of trading activities on the floor of the Exchange, investors had traded 255.574 million shares worth N5.026bn in 5,420 deals, with analysts explaining that gains by some highly capitalised equities such as UACN Plc, Guiness Nigeria Plc and Nigeria Breweries Plc, spurred the rally.

The market capitalisation of the listed equities rose marginally by 0.02 per cent or N3bn to close at N11.752tn, while the NSE’s All-Share Index gained 7.97 basis points or 0.02 per cent to close at 37,111.64.

The NSE-30 rose by 0.3 per cent or 5.8 basis points to close at 1,738.60 points.

Analysts say that the release of Zenith Bank’s half-year results for 2013 was one of the factors that led to the rally.

The banking sub-sector maintained its lead on the activity chart, accounting for 53 per cent of total turnover traded.

In the sub-sector, 135.519 million shares, valued at N1.375bn were exchanged by investors in 1,791 transactions.

Trading in the shares of Zenith Bank Plc, United Bank for Africa Plc and Sterling Bank Plc drove volume in the sub-sector.

Other companies that recorded high turnover in the sub-sector are Fidelity Bank Plc, Guaranty Trust Bank Plc and Unity Bank Plc.

A total of 37 stocks recorded price appreciation, while 28 stocks recorded price depreciation.

Multi-Trex Integrated Foods Plc led the price gainers’ chart, rising by 10 per cent or six kobo to close at 66 kobo per share. Jos International Breweries Plc followed closely on the chart, rising by 9.28 per cent or nine kobo to close at N1.06 per share.

Trans-nationwide Express Plc and UACN Plc gained 9.09 per cent and 8.56 per cent to close at 96 kobo and N61.89 per share respectively, while Mansard Insurance Plc added 8.53 per cent or 18 kobo to close at N.2.29 per share.

CAP Plc led the price losers, shedding 10 per cent or N4.85 to close at N43.65 per share; followed by International Energy Insurance Company Plc, which fell by 9.78 per cent or 22 kobo to close at N2.03 per share.

Academy Press Plc and NPF Microfinance Bank Plc shed 9.74 per cent and 9.09 per cent to close at N1.76 and 80 kobo per share, respectively, while Flour Mills Nigeria Plc fell by 8.97 per cent or N7.74 to close at N78.56 per share.