Economy

Nigerian Stocks Grossly Undervalued at Current Prices—Olubiyi

Published

6 years ago

22/06/2020

By Dipo Olowookere

An expert in capital market, Dr Timi Olubiyi, has said the current prices of stocks at the Nigerian Stock Exchange (NSE) are “grossly undervalued.”

Mr Olubiyi made this disclosure in an opinion article he wrote and was published on Business Post on Sunday.

The chartered member of the Chartered Institute for Securities and Investment (CISI) and financial literacy specialist said most stocks on the exchange were far below their real worth and book value.

“Equities are grossly undervalued at current prices; most stocks are far below their real worth and book value.

“Also, the current valuations already offer opportunities to those who want to position for the long-term.

“Essentially, hedging against inflation is achievable with the current equity prices if held over in the long-term,” Mr Olubiyi said in the article.

He said in the first quarter of 2020, the local stock exchange closed in the red territory in terms of performance with a negative return of 20.65 percent in contrast to a negative return of 1.24 percent in the corresponding period of 2019.

In the period under consideration, the market capitalisation of the NSE, which represents the market value of all listed companies, lost about N2 trillion.

But in April 2020, when the lockdown imposed on Lagos, Abuja and Ogun State became fully effective, the market surprisingly appreciated by 8.08 percent month-on-month.

The All-Share Index (ASI), which opened the month at 21,300.47 points, closed at 23,021.01 points at the end of the month, while the market value increased by N896 billion to N11.997 trillion from the opening value of N11.101 trillion.

In May 2020, the market on month-on-month performance closed at 9.76 percent as against 8.08 percent recorded in April 2020.

Mr Olubiyi attributed the positive performance of the exchange to investors’ bargain hunting even though most of the trades were executed remotely.

At an event held few weeks ago, the Chief Executive Officer of the NSE, Mr Oscar Onyema, said during the lockdown, which was eased in early June, domestic investors took over the market after the exit of offshore traders, who used to dominate transactions.

But Mr Olubiyi, who is prolific investment coach and an entrepreneurship and small business management expert, said he foresees “a return of foreign investors when a bit of stability and flattening of the curve of the pandemic has been achieved globally particularly in Nigeria.”

However, he advised regulators and government “to improve policies and laws to promote foreign investors and inward foreign direct investments (FDIs) because it will eventually stimulate economic development.”

According to him, “The policy of ease of doing business in Nigeria can be upgraded to include foreign portfolio investment policy options.

“Furthermore, Foreign Direct Investment (FDI)-incentives (tax-related) to considerably increase foreign participation in our capital market ecosystem needs to reflect in the post-COVID recovery policy.”

In the past days, especially in June, the market has not been able to replicate its astonishing performance when business activities were paused in the country due to the virus, which has infected over 20,000 persons in almost four months and claimed 518 lives since February 27, 2020, when Nigeria recorded its first case.

Economy

NBA Demands Suspension of Controversial Tax Laws

Published

1 hour ago

24/12/2025

Modupe Gbadeyanka

By Modupe Gbadeyanka

The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.

In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.

A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.

To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”

“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.

It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”

“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.

“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.

“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.

“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.

Economy

MRS Oil, Two Others Raise NASD Bourse Higher by 0.52%

Published

3 hours ago

24/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.

The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.

Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.

Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.

Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.

The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.

By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.

In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.

Economy

NGX All-Share Index Soars to 153,354.13 points

Published

4 hours ago

24/12/2025

Dipo Olowookere

By Dipo Olowookere

It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.

The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.

Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.

Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.

At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.

This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.

VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.

In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.