By Udeme Ekwere

Tuesday, 16 Nov 2010

PREPARATIONS for the Eid-el-Kabir celebrations affected activities on the Nigerian Stock Exchange on Monday as indicators recorded marginal decline at the close of trading.

The market capitalisation of the listed equities, which had closed on Friday, at N8.10tn, fell by N22bn or 0.3 per cent to N8.08tn.

Similarly, the NSE‘s All-Share Index stood at 25,301.34 points, repre-senting decrease of 66.49 basis points or 0.3 per cent, from 25,367.83 on Friday.

According to some market operators, who spoke with our correspondent on Monday, the decline in activities may be traced partly to the two-day Sallah break.

Speaking to our correspondent on Monday, the Managing Director, Ideal Securities Limited, Mr. George Okafor, said that there might have been some large selling by investors who needed money for the celebrations.

He said, ”We can attribute the decline in activities to the coming holidays. You know the break is a time when people would want to spend on their families, so investors, in such periods, tend to sell off some of their equities in order to have some money to do a few things. This might have been responsible for the slowdown we witnessed on Monday.”

The Managing Director, Lambeth Trust and Investment Company Limited, Mr. David Adonri, noted that some investors were selling some of their shares at this period, in order to be able to buy them back later in the year, before the Asset Management Corporation of Nigeria issues its first bond on December 30.

The Managing Director, AMCON, Mr. Chike Obi, had on Thursday, told stockbrokers and market operators that AMCON would issue its first bond before the end of this year.

He said, ”AMCON is buying the non-performing loans and not underlying assets. Payment at the first instance will be by zero coupon bonds maturing in three years, to be refinanced at maturity with seven years bond of market determined yield. The first bond will be issued by December 30, this year.”

The company had indicated that it would acquire other non-performing loans backed by other forms of collaterals, based on the current market valuation of the collateral, while unsecured loans would be valued at five per cent of the principal value.

Source: Punch