WHY PATRONAGE FOR INSURANCE STOCKS WANED, BY EXPERTS
Many investors in the Nigerian capital market invest their money in the market because of returns on investment either through price appreciation, dividend or bonus issue.
But over the years, most of the insurance stocks listed on the floor of the Nigerian Stock Exchange (NSE) have failed to deliver and live up to expectations of growth as experienced in the banking and other sectors.
Although the sector plays a critical role in the Nigeria economy, the performance of insurance stocks at the stock market has not been very profitable.
Looking at the performance of the sector on the NSE, Daily Trust can reveal that insurance stocks have not been doing well since the beginning of this year as the sector recorded a decline of 11.41 per cent while the entire market gained 8.53 per cent since beginning of the year.
The NSE Insurance Index opened the year with 143.54 basis points and closed at 27.16 points last week Friday translating to 16.38 basis points loss.
Similarly, the equities market capitalization also appreciated from N6.533 trillion which it opened the year to N 7.090 trillion when it closed last week Friday.
However, out of 30 equities listed on insurance sector, only six stocks have price tags while 24 others are on par value (50 kobo per share). The stock with highest current market price in the sector is Custodian and Allied Insurance with N1.74 kobo.