Amidst the bearish trend at the stock market, capital growth recorded by some companies at the end of first quarter (Q1) beat inflation figures and fetched investors positive return on their investments. While the Nigerian Stock Exchange (NSE) All Share Index, which is the benchmark gauge for the equities market performance ended the Q1 with a decline of 5.1 per cent, most of the other sectoral indices recorded worst decline. Similarly, most of the stocks are in red, with some recording depreciated above 30 per cent.
When the Nigerian Bureau of Statistics (NBS) released the inflation rate for March, it was 17.26 per cent, meaning that most investors in the stock market are counting losses. However, THISDAY checks revealed that some of the investors have witnessed positive returns on their investments amidst the rampaging bears. These investors recorded returns that are higher than the inflation rate, meaning that they are still recording positive returns on their investments.
Investors in Beta Glass Company Plc recorded the highest return of 46 per cent, followed by Airline Services and Logistics Plc with 42.4 per cent. Those in United Bank for Africa Plc (UBA) witnessed a growth of 28.2 per cent, while Okomu Oil Palm Plc fetched its investors 24.4 per cent. Stanbic IBTC Holdings Plc ended the March with 20 per cent, which is higher than the inflation rate.
Some market operators said more stocks would provide positive returns to investors once the operating environment improves following efforts by the government. Market analysts are also not surprised that stocks of UBA and Stanbic recorded positive growth in Q1 given their financial results for 2016. Both financial institutions recorded high profit growth compared to other banks. Stanbic IBTC recorded a growth of 51 per cent in profit while that of UBA rose by 32 per cent.
The Group Managing Director and Chief Executive Officer of UBA, Kennedy Uzoka, had attributed the impressive results to focus on operational efficiencies.
“Given the operating environment in 2016, I am very pleased with our profitability – an impressive 32 per cent growth in PBT to N91 billion – whilst we have also focused keenly on operational efficiencies, illustrated by the reduction in our cost-to-income ratio.” Uzoka said.
He had assured stakeholders of better further performance, saying “As we implement our Customer First Philosophy, we are approaching 2017 with real optimism, especially with the outlook remaining positive in many of our markets, where we benefit from our increasingly diverse revenue streams. We reiterate our pledge to delivering excellent service to our customers, and remain committed to creating superior and sustainable return for our shareholders.”
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