26 February 2013

Nigeria: All-Share Index Falls 0.25 Percent As Nigerian Breweries Sheds N38 Billion

The benchmark Nigerian Stock Exchange (NSE) All-Share Index fell 0.25 per cent to close at 33,811.08 Monday on the price decline by Nigerian Breweries Plc, which is the second highest capitalised stock on the Nigerian bourse.

Shares in the leading brewing firm depreciated by N4.80 as investors continued to react negatively to a decline in the profit of the company for the 2012 financial year.

Nigerian Breweries Plc had last Friday announced a turnover of 20 per cent in turnover to N252.6 billion in 2012, while profit after tax fell to N38.042 billion, from N38.50 billion in 2011.

Profit margins of the company came under pressure with profit before tax margin depreciating from 26.7 per cent in 2011 to 22 per cent, while profit after tax margin fell to 15.1 per cent.

Although the directors recommended a dividend of N3 per share, which is 140 per cent higher than the N1.25 paid the previous year, market operators said shareholders who are not comfortable with the 1.8 per cent dividend yield considering the current market price of over N160 are selling off.

As a result, the high supply of the shares in the market without corresponding demand led to a price decline that chopped off N38 billion from the market capitalisation of Nigerian Breweries Plc to close at N1.219 trillion.

Continued profit-taking in the shares of Presco Plc led to a depreciation of N1.73, making the equity to close the day as the second highest price loser at N20.12. Cadbury Nigeria Plc, Okomu Oil Palm Plc and Lafarge Cement WAPCO Nigeria Plc shed N1.55, N1.36 and N1.10 to close at N35.50, N51.00, N65.00 respectively.

On the other hand, Guinness Nigeria Plc which suffered heavy bashing last recently on the account of weak half year performance recovered Monday, chalking up N290 to close at N290 per share. Nestle Nigeria Plc also recovered part of last week's losses to climb back to N900 per share.

Analysts at Cordros Capital Limited said the market might return positive today as bargain hunters take advantage of fallen share prices.

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