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Nigerian Stock Market Update : Banks release audited results

It is obvious that the Nigerian stock market is continuously picking up after suffering losses in the past two years. The Nigerian stock market’s performance has marked a positive start to the year 2010, and investors are gradually building up confidence from a flat beginning in January.
As at the close of trading on Tuesday, March 30, the Nigerian Stock Exchange (NSE) All Share Index (ASI) posted a Year-to-Date (YtD) of 26.81 percent, from 20,827.17 in January to 26,411.97. Similarly, market capitalisation has grown by 28.03 percent, from N4.989 trillion in January to N6.388 trillion. Nigerian equities had fallen by 34 percent in 2009, after falling 46 percent in 2008. Indeed, the NSE ASI had been predicted as capable of assuming the present outlook based on several factors, including increased system liquidity, unattractive yields in the money market, the passage of the Asset Management Company (AMC) bill last week, and speculative trading on the heels of capital appreciation. In the coming weeks, it is expected that trading activities would also be driven by the audited results and other corporate actions that will be released into the market. The corporate actions had been kick started by Zenith Bank and Total Nigeria plc. Zenith Bank declared a gross income of N277.300 billion and a Profit After Tax of N20.603 billion. The directors are recommending a dividend of N0.45 per share and a bonus of 1 for 4. Shares in Bank PHB plc rose by N0.39 to a new  high of N8.22 after the directors announced 90 percent increase in third quarter earnings. Investors also seized the opportunity to trade 8.369 million shares valued at N68.800 million in 90 deals. Total Nigeria has just released its audited financial report for the year ended December 31, 2009, to the floor of the NSE. The company declared a turnover of N178.570 billion and a profit after tax (PAT) of N3.968 billion. This showed a growth of 0.65 percent in turnover, while the PAT declined by 9.67 percent. Glaxosmithkline plc has also declared a dividend of N0.75 per share.
Financial analysts remain confident in the outlook for Nigerian equities because of their low price earnings multiples.
Guaranty Trust Bank plc (GTBank) on Tuesday joined the list of banks that have released their audited results in line with the common financial year end for banks as it reported 21 percent drop in pre-tax profit for the year ended December 31, 2009.
The result, which was released to the stock market during trading, showed a drop in profit before tax (PBT) from N35.32 billion in 2008 to N27.963 billion in 2009. However, there was an improvement in gross earnings which grew by 61.57 percent to N162.550 billion as against N100.605 billion in 2009. Profit after tax stood at N23.686 billion in 2009 compared with N28.315 billion in the previous year. This shows a decline of 16.35 percent.
The directors of the bank proposed a dividend of 75 kobo per share and bonus of 1 for 4 to the shareholders whose names appear on the register of members as at April 20, 2010 while payment date is May 5, 2010.  Dealers said a positive reaction trailed the full year results released by the bank as the share price jumped 5 percent from N21.60 to N22.68, subsequently trading at the upper end of the market. It would be recalled that the shareholders of the bank received a dividend of N1.00 per share and bonus of 1 for 4 in 2008 financial year.
The bank’s total assets and contingents grew by 30 percent from N1 trillion to N1.37 trillion, while shareholders’ funds increased by 11 percent from N160 billion as at February 2008 to N178 billion by December 31, 2008.

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