Goddy Egene
The stock market appreciated for the second day as investors reacted positively to decision of members of the Nigerian Stock Exchange (NSE) to demutualise the exchange for better performance. Also some investors are embarking on bargain hunting as many stocks hit low levels last week.
The NSE All-Share Index rose 0.6 per cent to close at 26,415.54 while market capitalisation added N83.6 billion to close at N13.8 trillion. Market operators said members of the capital market community are eagerly waiting for the demutualization of the exchange, noting that the success court-ordered meeting and extra-ordinary general meeting held on Tuesday reassured operators that the process would soon be completed.
At the meetings, the NSE members assented to: the registration of the exchange as Nigerian Exchange Group; the transfer of its securities exchange licence and other assets required to carry out the securities function to Nigerian Exchange Limited and the establishment of a separate subsidiary company to be charged with the regulatory functions of the exchange post-demutualisation to be called NGX Regulation Limited.
The members equally approved the transfer of the assets of NSE Consult Limited, NSE Nominees Limited and Coral Properties Limited – existing subsidiaries of the NSE – to the Nigerian Exchange Group Plc.
They also approved that the exchange will have a total share capital being N1,250,000,000 comprising 2,500,000,000 ordinary shares of 50 kobo each to be registered with the Corporate Affairs Commission (CAC). The members equally assent to the allotment of 1,964,115,918 ordinary shares to Dealing Members and Ordinary Members on the basis of a ratio of 78:22, respectively.
A broker said these were positive indications that the demutualisation process would be completed soon and give the market a new lease of life. Hence, the market reacted positively after the meetings on Tuesday and was sustained yesterday.
In all, 22 stocks gained while 10 stocks depreciated. The price gainers were led by NEM Insurance Plc and Royal Exchange Plc with 10 per cent each, trailed by FBN Holdings Plc with 9.7 per cent. Ecobank Transnational Incorporated with 9.2 per cent, while UAC of Nigeria Plc and Wema Bank Plc garnered 8.6 per cent each.
Other top price gainers included: Unity Bank Plc(8.1 per cent); Access Bank Plc (6.5 per cent); Linkage Assurance Plc (5.2 per cent); Sterling Bank Plc (4.9 per cent); Nigerian Breweries Plc (4.4 per cent).
Conversely, Ardova Plc led the price losers with 10 per cent, trailed by Deap Capital with 8.3 per cent. Consolidated Hallmark Insurance Plc shed 7.4 per cent, while Chams Plc and Law Union & Rock Insurance Plc depreciated 4.7 per cent and 4.0 per cent in that order.
