By Dipo Olowookere
An analysis of the total return of an initial investment of N100,000 each in the 10 highest capitalized stocks (except Dangote Cement and Seplat) between December 2008 and 07 February 2018 has shown that GTBank recorded the highest return of 1,100 percent.
This was revealed in a report by FSDH Research titled ‘Benefits of Long-Term Investment Strategy in the Equity Market.’
The report explained that it excluded Dangote Cement and Seplat from our analysis because the two companies were not listed on the floors of the NSE in 2008.
From the analysis, the share price of International Breweries, during the period, grew by 1,061 percent, while Nestle increased by 874 percent.
Zenith Bank progressed in value by 433 percent, Ecobank by 416 percent, Stanbic IBTC by 345 percent, Nigerian Breweries by 314 percent, UBA by 228 percent, Access Bank by 167 percent and FBN Holdings with 45 percent.
The report by FSDH research was to highlight the advantage of having a long-term investment strategy in the stock market.
It noted that this helps to hedge against portfolio losses associated with short-term stock price volatility.
FSDH Research said the breakdown of the total return in the GTBank stock shows that capital appreciation, cash dividend and bonus issue contributed 33%, 20% and 47% respectively.
FBN Holdings recorded the lowest performance because of capital depreciation. The breakdown of the total return on the selected stocks shows that capital appreciation contributed the highest return, accounting for 54% of the return. Bonus and cash dividend contributed 26% and 20% respectively.
Adedapo Adesanya