Since the stocks of insurance companies reached an all-time high on August 13, shareholders of insurance firms in the Nigerian Exchange Limited (NGX), also known as the stock market, have lost over N198.21 billion to profit takers.
Prime Business Africa notes that after President Bola Tinubu signed the Nigerian insurance industry reform bill into law on August 5, insurance stocks soared significantly, reaching an all-time high on August 13.
Join our WhatsApp ChannelThe federal government said the law will strengthen the industry’s capital base, regulatory oversight, and digital infrastructure, as well as rebuild public trust, deepen insurance penetration, and position the sector for long-term economic impact.
However, since reaching the all-time high, profit takers have sent insurance stocks down the hill, with the industry’s market valuation declining by 14.74 percent, from N1.26 trillion on August 13 to N1.07 billion on August 26.
According to PBA’s analysis, 16 insurance firms have recorded losses out of 17, with only Mutual Benefits Assurance pressing forward, as the value of its share has appreciated by 15.72 percent during the reviewed period, from N3.88 kobo to N4.49 kobo.
Top five losers
Lasaco Assurance
Within the period under review, the investment value of Lasaco Assurance’s shareholders has depreciated by 30.4 percent, the highest decline recorded by any insurer.
This represents a loss of N16.84 billion, which was driven by the N1.52 kobo decline in Lasaco Assurance’s share price, as the cost of buying a share dropped from N5 on August 13 to N3.48 kobo on August 26.
Consequently, Lasaco Assurance’s market valuation fell from N55.41 billion to N38.57 billion, according to Prime Business Africa’s analysis.
NEM Insurance Company
The second-highest loser is NEM Insurance after the company’s shareholders’ investment value dropped by 23.94 percent, representing a loss of N45.64 billion within two weeks.
Analysis of the company’s stock market performance showed that the loss was on the back of a decline in share price of NEM Insurance, as it closed trading at N28.90 kobo on August 26, from N30 on August 12.
Following the N9.1 kobo decline in NEM Insurance’s share value, the company’s market valuation decreased from N190.62 billion to N144.97 billion.
Consolidated Hallmark Holdings
Consolidated Hallmark Holdings took the third position on the losers’ table, as over 22.55 percent was wiped off the value of investments held by the company’s shareholders.
This indicates the shareholders of Consolidated Hallmark recorded a combined loss of N13.76 billion within two weeks.
Also, the market valuation of Consolidated Hallmark dropped from N61.02 billion on August 13 to N47.26 billion on August 26
This followed the N1.27 kobo drop in Consolidated Hallmark’s share price, which declined from N5.63 kobo to N4.36 kobo during the period under review.
Veritas Kapital Assurance Plc
The shareholders of Veritas Kapital Assurance Plc recorded a 21.14 percent decline in their investment value, reflecting a combined loss of N8.18 billion.
Consequently, Veritas Kapital’s market valuation decreased from N38.68 billion to N30.50 billion between August 13 and August 26.
During the period, the share price of Veritas Kapital had depreciated by N0.59 kobo, from N2.79 kobo to N2.20 kobo.
Sovereign Trust Insurance
With the share price of Sovereign Trust Insurance down by N0.75 kobo within two weeks, the company’s shareholders recorded a 20.83 percent decline in the value of their investments.
The value of the share had depreciated from N3.60 kobo to N2.85 kobo during the reviewed period, resulting in a combined loss of N10.67 billion for the shareholders.
Also, Sovereign Trust’s investment valuation plunged from N51.22 billion to N40.55 billion.
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