The financial services industry has had a fantastic ride in the past year in the stock market especially for banks but it was C&I Leasing and NEM insurance which delivered capital gains to investors in excess of 200 percent since July last year.
BusinessDay analysis revealed that out of the 29 publicly listed financial services companies surveyed; the best performing stocks were C&I Leasing with a total one year return of 296.49 percent and NEM insurance with a return of 225 percent over the same period.
Behind the top performers was FCMB with a return of 104.81 percent, making the bank the best performing publicly listed bank in the Nigerian stock market over the past year. All banks delivered positive results during the period under review with the likes of Fidelity Bank delivering 87.91 percent returns to shareholders and FBN holdings returning as much as 74.38 percent. Even troubled Skye bank is currently up 5.88 percent over the past one year.
Insurance companies weren’t as fortunate as the banks in the capital market as the move by the Nigerian Stock Exchange (NSE) to remove the price floor of 50 kobo for listed securities sent many insurance companies shares into a free fall. 8 out of the 15 publicly listed insurance firms lost more than 4 percent each in stock value over the past year.
Equity Assurance shed as much as 60 percent over the past one year. Other big losers in the insurance sector were Niger Insurance (-46%), Cornerstone Insurance (-42%), Lasaco Assurance (-26%) and Mutual Benefits Assurance (-22%).
But there were some outliers in the Insurance sector who managed to deliver strong positive returns to their shareholders in line with their peers in the financial services industry. These insurance companies were NEM insurance (+225%), Linkage Assurance (+40.98%), AXA Mansard Insurance (+31.46%) and AIICO Insurance (+16.95%).
C&I Leasing which was the top performer in the stock market over the past one year is the only publicly listed leasing company in Nigeria. The stock is up 296.49 percent since last year July as company profits jumped over N1 billion for the first time in 2017. The Bull Run in the share price began in March last year after results from 2016 performance showed that earnings per share (EPS) had jumped from 8.61 kobo in 2015 to 54.17 kobo in 2016. EPS for 2017 came in higher at 65.85 kobo as the growth story in the company continued to gain ground.
Investors responded frantically to the strong financial performance, driving C&I share price from a low point of 50 kobo in March 2017 to N2.26 kobo on Wednesday 4th July 2018. The profit growth looks set to continue as Q1 2018 results show that EPS for Q1 2018 rose to 23.07 kobo from 16.75 kobo in Q1 2017.
While other financial services companies like Fidelity Bank and Linkage Insurance were able to grow their profits by more than 100 percent between 2016 and 2017, their stock performance has however lagged equity returns observed in C&I Leasing and NEM Insurance.
Among the 29 publicly traded financial services company, as many as 18 companies outperformed the NSE All Share Index returns of 16.09 percent over the past year.
