By Ogbuotobo Chuks

THE STOCK MARKET
For those who do not know, the stock market is a reflection of the companies listed in it. If you observe the market daily, you’ll understand what I mean. With special emphasis on the banking sub-sector, you’ll notice that the new generation banks are gaining appreciation faster that Union Bank and First Bank. The likes of GTB, Zenith Bank, Intercontinental Bank FCMB, Fidelity Bank, Access Bank etc have all appreciated by over 100% are close to 120%.

A closer research will also reveal that they have been involved min aggressive retail banking. They have attracted deposits through developed products that addressed specific customer needs.

Investors saw and will still continue to see where and how the cash is circulating.

SUMMARY
When analyzing banking stocks, I believe one of the key variables you should consider should be the level of increase in cash deposits and the rate of conversion into profits. This is reflected in the return on equity (ROE).

Significant increases suggest significant profits and significant profits pushes up stock prices.

I will close with this quote-“It is not all about being popular, it is more about being relevant”.

Think and Act…                                                                  

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This entry was posted on Wednesday, April 11th, 2007 at 2:50 pm and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. Tags: First Bank, Union Bank
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