NSE Stocks Trading At Nominal Value Beyond Crisis! September 16, hrs / Taiwo Ologbon-Ori

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1 NSE Stocks Trading At Nominal Value Beyond Crisis! September 16, hrs / Taiwo Ologbon-Ori It's the pattern investors have grown used to since the rolling financial crisis began in The market moves to a point of weakness, and everyone is forced to reveal their true investment style and strategy. Its time for a new thinking to engage the different market cycle we are in, despite outstanding policy, product and practice issues which still remain crucial to the investment market. Figuring out what to do sometimes is like trying to solve a Rubik's cube blindfolded. But there are plenty of different investment styles and strategies out there that can help, if only one took the pains to understand how. Even though the bulls and bears are constantly at odds, they can both make money with the changing cycles in the market. Even the chickens see some returns, though not a lot. The one loser in this picture is the pig. Pigs, according to Investopedia, are high-risk investors looking for the one big score in a short period of time. Pigs buy on hot tips and invest in companies without doing their due dlligence. They get impatient, greedy, and emotional about their investments, and they are drawn to high-risk securities without putting in the proper time or money to learn about these investment vehicles. Professional traders love the pigs, as it's often from their losses that the bulls and bears reap their profits. The market will most likely both rise and fall again. What really matters, though, is that at today's prices there are many extremely attractive individual investment opportunities at prices that will, in due course, come to look very cheap. Where weak hands dominate the activities, taking the contrarian stand would be the most prudent path- Against this backdrop, discerning fund managers are finding many opportunities to buy good companies at great prices. As one said, "this is the opportunity to buy what I've always wanted to own". Technically, not every fall/zero level translates to bad state, it is an opportunity for certain set of investors who can see beyond the fall. Being an advocate of long-term investing, this is my position towards some value stocks with growth potential that are trading at nominal value of N0.50Kobo. Strategically speaking, my positioning in these stocks is hinged on a healthy PE ratio, EPS and liquid status of the stocks as these fundamentals helped a lot during quick diversification or portfolio reshuffling - this is part of my due diligence, as the extract above provides credence to investigations into details of a potential stock. He that is down needs fear no fall- Considering the market risk, it appears that these stocks at nominal value (N0.50kobo) are immune against likely market risk as the value of these stocks cannot deplete further by default, though we would not underplay our due diligence. However, the specific risk that are likely to have greater impact would have been taken into consideration fundamentally with EPS and PE ratio noted above. Maybe it is proper that I issue a caveat here this position should not be construed as promoting these firms or a particular course of action but an attempt to share an orientation with common investors who might be ignorant of this opportunity. Those who made significant fortune recently in the sudden resurgence of Transcorp Plc will obviously appreciate my position better. The stock moved between March 1 st to April 15 th 2011 from a nominal value posture of N0.50kobo to peak at N1.82kobo, recording 256% growth in less than two months (current price is N0.86k). NSE Stocks Trading At Nominal Value Beyond Crisis! Page 1

2 Nevertheless, we provide in this report, our observations on the stocks trading at their nominal values with the hope that we might glean an insight into their potentials and actualities. REFERENCES: Technical Terms & Market Lingo The Bulls: A bull market is when everything in the economy is great, people are finding jobs, gross domestic product (GDP) is growing, and stocks are rising. Things are just plain rosy! Picking stocks during a bull market is easier because everything is going up. Bull markets cannot last forever though, and sometimes they can lead to dangerous situations if stocks become overvalued. If a person is optimistic and believes that stocks will go up, he or she is called a "bull" and is said to have a "bullish outlook". The Bears: A bear market is when the economy is bad, recession is looming and stock prices are falling. Bear markets make it tough for investors to pick profitable stocks. One solution to this is to make money when stocks are falling using a technique called short selling (something not available in our markets but has been advocated for by all those who believe in changing the mono-product bourse we run). Another strategy is to wait on the sidelines until you feel that the bear market is nearing its end, only starting to buy in anticipation of a bull market. If a person is pessimistic, believing that stocks are going to drop, he or she is called a "bear" and said to have a "bearish outlook". The Other Animals on the Farm - Chickens and Pigs: Chickens are afraid to lose anything. Their fear overrides their need to make profits and so they turn only to money-market instruments or get out of the markets entirely. While it's true that you should never invest in something over which you lose sleep, you are also guaranteed never to see any return if you avoid the market completely and never take any risk. Pigs are high-risk investors looking for the one big score in a short period of time. Pigs buy on hot tips and invest in companies without doing their due diligence. They get impatient, greedy, and emotional about their investments, and they are drawn to high-risk securities without putting in the proper time or money to learn about these investment vehicles. Professional traders love the pigs, as it's often from their losses that the bulls and bears reap their profits. The Contrarian: In finance, a contrarian is one who attempts to profit by investing in a manner that differs from the conventional wisdom, when the consensus opinion appears to be wrong. A contrarian believes that certain crowd behavior among investors can lead to exploitable mis-pricings in securities markets. For example, widespread pessimism about a stock can drive a price so low that it overstates the company's risks, and understates its prospects for returning to profitability. Identifying and purchasing such distressed stocks, and selling them after the company recovers, can lead to above-average gains Sources/Reading List/Acknowledgments: 1. See Investopedia.com Stocks Basics: The Bulls, The Bears And The Farm 2. See Wikipedia.com Contrarian investing - Wikipedia, the free encyclopedia 3. See US Markets: What Small Investors Fleeing Stocks Means August 23, See How Global Equity Markets Performed in 2010, January 14, 2011 About the Author(s): Taiwo OLOGBON-ORI is an analyst at Proshare with assistance from the Analyst Research team. DISCLAIMER/ADVICE TO READERS: While the website is checked for accuracy, we are not liable for any incorrect information included. The details of this publication should not be construed as an investment advice by the author/analyst or the publishers/proshare. Proshare Limited, its employees and analysts accept no liability for any loss arising from the use of this information. All opinions on this page/site constitute the author s best estimate judgement as of this date and are subject to change without notice. Investors should see the content of this page as one of the factors to consider in making their investment decision. We recommend that you make enquiries based on your own circumstances and, if necessary, take professional advice before entering into transactions. This information is published with the consent of the author(s) for circulation in/to our online investment community in accordance with the terms of usage. Further enquiries should be directed to the author. NSE Stocks Trading At Nominal Value Beyond Crisis! Page 2

3 Stocks with Nominal Values Security Sector Current Price Volatility in the Year Highest Lowe st ABCTRANS Transport Business Profile PE EPS Associated Bus Company PLC, through subsidiaries, offers bus passenger transportation services and owns and operates a budget hotel. The Company operates in Nigeria. Prevailing Indices (Most Recent) Net Assets Growth Turnov er Growth PAT Growth Period Outsta nding Shares (Mn) Price Performance Trend YTD % 26.69% % Jun-11 1, % % % -9.09% AFRIK Health The company manufactures drugs % % % Dec % 0.00% 0.00% 0.00% AFRINSURE Insurance is a life insurance company % 16.35% 31.55% Dec-09 20, % 0.00% ASOSAVINGS Mortgage BECOPETRO Oil & Gas ASO Savings and Loans Plc is a Primary Mortgage Institution (PMI), incorporated in Nigeria as a limited liability company on November 9, The company formally commenced business on January 2, 1997 and converted to a public liability company (PLC) on September 22, 2005 Beco Petroleum Products Plc was incorporated in 1986 and started business operations in 1987 and is a player in the downstream and upstream sectors of the petroleum industry in Nigeria. The Company's core business is petroleum products marketing, distribution, maritime operation and product transportation % -0.77% % Mar-10 8, % % % 0.00% % -2.05% % Apr-11 3, % % % NSE Stocks Trading At Nominal Value Beyond Crisis! Page 3

4 BIGTREAT Food Bakes and retails bread % 7.17% % Dec-10 2, % % % 0.00% CAPOIL Oil & Gas CHAMS CORNERST Insurance COURTVILLE CRUSADER Insurance Capital Oil Plc markets and sells petroleum and petroleum products. Chams Nigeria PLC offers smartcard technologies. The Company offers a public access retail billing and collection system with Internet access. Chams also offers home office products Cornerstone Insurance Plc sells life and non-life insurance products in Nigeria. The Company provides accident, sickness, motor, fire, burglary, equipment and life insurance products. Cornerstone also offers investment and pension plans Courteville Investments PLC is a business development solutions company. The Company provides financial management and advisory services, business solutions, e-commerce, and online marketing solutions Crusader Insurance Plc provides general business, special risk and life insurance products. The company further offers pension benefit plans and reinsurance arrangements #DIV/0! , % % % 0.00% % 509.2% % Jun-11 4, % % % 0.00% % 1.83% % Jun-11 8, % % -3.85% 0.00% % 11.84% % Dec-10 2, % 0.00% 0.00% % 3.90% % Dec-10 3, % % % -9.09% DAARCOMM % -3.41% % Sep-11 8, % % % 0.00% NSE Stocks Trading At Nominal Value Beyond Crisis! Page 4

5 DUNLOP Dunlop Nigeria Plc manufactures and sells vehicle tires and tubes. The company also cultivates and processes rubber via its subsidiary Pamol Nigeria Limited % -0.68% % Mar-11 4, % % 0.00% 0.00% EQUITYASUR Insurance #DIV/0! , % % 0.00% 0.00% FIRSTALUM FIRSTINLND Bank First Aluminium Nigeria PLC manufactures a wide range of aluminum products. FinBank PLC attracts deposits and offers commercial banking services. The Bank offers consumer and business loans, and insurance, securities brokerage, investment banking, and treasury services % % 88.51% Jun-11 2, % % 46.00% % % % % Dec-10 16, % % 32.73% % FLEXIBLE DELISTED #DIV/0! FTNCOCOA Food GNI Insurance GOLDINSURE Insurance FTN- Cocoa Processors Plc provides processed cocoa commodities. The Company's products consist of cocoa butter, cocoa cake, cocoa powder, and cocoa liquor. Great Nigerian Insurance PLC provides various insurance service including life, pension, and special risks. Goldlink Insurance Plc is an insurance company. The Company underwrites classes of insurance including general insurance, life and pension, and special risk insurance % % % Mar-11 2, % % 12.96% % % 12.72% % Sep-10 1, % % 0.00% 0.00% % -1.63% -5.18% Jun-11 4, % 5.56% % -3.85% NSE Stocks Trading At Nominal Value Beyond Crisis! Page 5

6 GUINEAINS Insurance HMARKINS Insurance IAINSURE Insurance INTENEGINS Insurance LASACO Insurance Guinea Insurance PLC provides insurance services throughout Nigeria. The Company provides services such as general accident, motor, fire, life and pensions, risk insurance packages and engineering. Consolidated Hallmark Insurance PLC offers a wide range of insurance products and services. The Company offers products that include fire, automotive, bonds, and special risk Investment & Allied Assurance PLC offers property/casualty insurance. The Company offers automobile, fire, theft and burglary, consequential loss, goods in transit, fidelity guarantee, homeowners, all risks, liability, marine cargo, and oil and gas insurance. International Energy Insurance PLC provides insurance solutions to the energy sector. The Company's scope include oil and gas, engineering/car, bond and finance guarantee, money risks, fire and allied perils, burglary and house breaking, personal accident, goods in transit, motor and life. Lasaco Assurance PLC provides life and general insurance services, which includes motor, bond, contractors-all-risk, fire, burglary, aviation, marine, general accident, life, pension schemes, engineering, and oil and gas % -0.39% % Dec % % 0.00% 0.00% % 80.70% % Jun % % 0.00% 0.00% 0.00! , % 0.00% 0.00% 0.00% % % % Jun-11 6, % % % 0.00% % 9.71% % Jun-11 7, % % % 0.00% NSE Stocks Trading At Nominal Value Beyond Crisis! Page 6

7 LAWUNION Insurance LINKASSURE Insurance LIVESTOCK Agric MBENEFIT Insurance MTI MULTIVERSE Construction NEM Insurance Law Union and Rock Insurance of Nigeria Plc offers life and non-life insurance services in Nigeria. Linkage Assurance Plc provides life and non-life insurance services. The company offers individual and group life insurance products, as well as nonlife insurance products such as motor insurance and physical damage insurance. Livestock Feeds Plc manufactures and markets animal feed products. The Company's products include poultry, pig, and cattle rations, meat cubes, and pallets. Mutual Benefits Assurance PLC offers life and property/casualty insurance. The Company offers group life, term, mortgage protection, key person, personal pension, fire, burglary, homeowner's, marine cargo, marine hull, automobile, all risk, liability and bond, and group and personal accident insurance. Mass Telecom Innovation Nigeria PLC installs networks of copper and fiber-optic cables. Multiverse PLC is a quarry company. The Company specializes in quarrying, sales and distribution of granite chippings. N.E.M. Insurance Plc provides general and nonlife insurance % 23.20% 21.91% Jun-11 3, % % 7.84% % % -0.56% 23.02% Jun-11 4, % % 0.00% 0.00% % 46.40% 59.09% Jun-11 1, % % 10.17% % % 26.82% % Dec-10 5, % % % 0.00% % -7.98% % Sep-10 4, % % 0.00% 0.00% % -7.89% % Jun-11 4, % % 0.00% 0.00% % 40.64% 17.41% Jun-11 5, % % 5.56% % NSE Stocks Trading At Nominal Value Beyond Crisis! Page 7

8 NIGERINS Insurance OASISINS Insurance OMATEK REGALINS Insurance Niger Insurance Plc provides life insurance, related pension, savings, and investment products in Nigeria. The company also offers fire, motor, burglary, professional indemnity, marine cargo, product liability and special risk insurance products. Niger Insurance further offers a savings and investment program designed for Muslims, and a Group Education Policy. Oasis Insurance PLC is an insurance company that underwrites all classes of life and non-life insurance businesses. Omatek Ventures PLC distributes computer products and provides related services. Regency Alliance Insurance PLC is an insurance company. The Company offers a wide range of insurance products and services, including risk underwriting, risk management, asset management, medical insurance, and savings and investments % 42.85% % Mar-11 5, % % % % % 19.80% 90.38% Jun-11 5, % % % 0.00% % % 1.49% Jun-11 2, % % 0.00% 0.00% % 43.84% 83.24% Jun-11 6, % % 0.00% 0.00% RESORTSAL Mortgage % 11.63% 13.61% Jun-11 13, % 0.00% 0.00% ROYALEX Other Fin Inst Royal Exchange Assurance PLC offers a wide range of insurance products and services. The Company offers insurance that includes life, automobile, fire, theft, and special risk % 50.27% % Mar-11 3, % % % 0.00% NSE Stocks Trading At Nominal Value Beyond Crisis! Page 8

9 SOVRENINS Insurance STACO Insurance STARCOMMS Comm STDINSURE Insurance TANTALIZER Food Sovereign Trust Insurance PLC offers insurance and risk management services. The Company's products include life insurance and non-life insurance such as life, key man, mortgage protection, automobile, and marine insurance. Staco Insurance PLC offers a wide range of insurance products. The Company's products include automobile, money, fidelity guarantee, travel, and workman's compensation insurance. Starcomms PLC offers fixed-line and mobile telephone services. Standard Alliance Insurance PLC is a composite insurance company licensed to transact all classes of life, non-life and special risks insurance businesses. Tantalizers PLC operates a chain of fast food restaurants % 54.95% 34.31% Jun-11 5, % % 0.00% 0.00% % 25.25% % Jun-11 5, % % % 0.00% % % % Jun-11 6, % % % % % % % Sep-10 8, % % % 0.00% % -8.33% % Jun-11 3, % % % -5.66% UDEOFSON UNHOMES Mortgage UNIC Insurance Udeofson Garment Factory Nigeria PLC manufactures an assorted types of children wear. Union Homes Savings & Loans PLC provides mortgage finance services. The company accepts savings deposits and offers commercial and national housing fund mortgages, and estate development and pensionlinked mortgage scheme loans. Unic Insurance PLC offers a wide range of insurance products and services. The Company's #DIV/0! % 0.00% 0.00% 0.00% % % Sep-10 7, % % -3.37% % % % -3.89% Sep-10 2, % -8.33% % 0.00% NSE Stocks Trading At Nominal Value Beyond Crisis! Page 9

10 products include fire, fidelity guarantee, automobile, bonds, and health insurance. UNIONDAC Healthcare UNITYKAP Insurance UNIVINSURE Insurance Union Diagnostic & Clinical Service Plc is a ultrasound diagnostic facility. Unity Kapital Assurance PLC offers commercial and personal insurance products. The Company offers automobile, homeowners, public liability, fidelity guarantee, marine, machinery breakdown, contractors all risk, fire, burglary, professional indemnity, group personal accident and workmen's compensation insurance, and bonds. Universal Insurance Co PLC operates an insurance agency % % -244% Dec-10 3, % % % 0.00% % 93.35% % Jun-11 13, % % 0.00% 0.00% % % % Dec-10 16, % % 0.00% 0.00% WAAP WAPIC Insurance Proshare Research WA Aluminium Products PLC manufactures a wide range of aluminium products. Intercontinental Wapic Insurance PLC is a composite full line insurance company. The company offers insurance services in pension, general, and special risk businesses % -6.73% Sep % 0.00% 0.00% 0.00% % % % Dec-10 5, % % % -7.41% NSE Stocks Trading At Nominal Value Beyond Crisis! Page 10