Analyst Blame Poor Performance of Insurance stocks on Low Returns

A stock analyst, Mr. Donald Iyere has described business in the sub-sahara sector of Africa as unfavourable, occasioned by poor economic indices which has made investors not to be enthusiastic in doing business in the sector. In recent times, there has been a low performance of insurance stocks on the floor of the Nigerian Stock Exchange (NSE) which experts have attributed to lack of substantial returns accruing to investors.
Iyere stated that said that investors neglect insurance stocks because the insurance companies have not demonstrated enough commitment to meet the needs of investors in the sector.
He explained that most insurance companies are yet to have a clear break from the traditional insurance practice which has resulted in their inability to meet investors’ expectations. He stated that unless this is done, there was every likelihood that the impressive gains which the sector enjoyed last year may be hard to actualized again.
The analyst added that some companies have been doing well, notwithstanding the poor performance of insurance stacks. For instance, companies like America International Insurance, AIICO that is trading almost above N2.00 now, while GTAssurance, Custodian Insurance companies are performing within the industry average. He noted that most of these have been able to report good profits, prompting the market to repose confidence in them. He added that companies trading below investors’ expectations are having nominal value and investors do not look their directions in doing business.
The analyst however expressed confidence in the normalization in the nation’s polity, brought about by the take over of President Goodluck Jonathan, advising clients not to panic as the lukewarm market may pick up soon. He stated that with the stability that is returning to the country as a result of new federal executive council, all sub-sectors would become lucrative again.
 Iyere reiterated that with the signing of the budget, things would normalize, stressing that although the market is gradually recovering, investors should expect more of the bulls’ rally when the ministers get settled for work.
 The analyst explained that Penny stock investors do a lot of investigation of target companies and in effect, expectations are based on the strengths of the company, which may not be obvious to the market presently, hence the current low pricing. The result, he said is that when the prices of such stocks begin to go up, the results and potential would respond appriopriately