The Nigerian Stock Exchange has risen 31.66% YTD (Year To Date) and 45.56% in the last one year alone. This is by far higher than the yield you get on other assets such as Fixed Income Securities or even Real Estate. Whilst some believe the rise is somewhat lopsided and unjustified other feel there is still room for improvement considering some bank stocks are still trading well below their potential P.E ratios. But I don’t blame the naysayers who view the NSE as lopsided and over hyped.
Take for instance a stock like Jos Breweries Plc JOSBREW;
- has not released a financial statement since 2009
- Jos Breweries Plc got bailed out by the Plateau State Government with a sum of N700million back in February this year.
- JOSBREW share price has risen 436% YTD alone.
- In fact, the stock was just 90kobo as recently as August 6.
- It is trading for about N9 (as at 17/9/13).
- The stock has just 562million shares yet and trades an average 521,782 daily.
Just what could be driving the share price up? Who are the people buying? Why are they buying? I have no answers but whatever the answer is I am not interested in buying!!!