SECURITIES VALUATION IN THE PRIMARY MARKET IN NIGERIA: (A CASE STUDY OF UNION MERCHANT BANK LIMITED) (An investment-banking subsidiary of Union Bank of Nigeria Plc.)
SECURITIES VALUATION IN THE PRIMARY MARKET IN NIGERIA: (A CASE STUDY OF UNION MERCHANT BANK LIMITED) (An investment-banking subsidiary of Union Bank of Nigeria Plc.)
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Date
2004-07
Authors
ABINA, Taofik Olanrewaju
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Abstract
The capital market is a market for mobilizing long-term funds thus, playing a very vital role
in the process of economic development through the mobilization of funds and its provision
for productive investment.
Valuation of securities in the capital market, i.e. primary market and the methods adopted
by Issuing Houses for securities valuation are fully discussed in this study. The methods
are net asset basis, maintainable earnings basis, earnings approach, P/E valuation and
Peer Company’s price.
Furthermore, the results of all the methods were compared with current market price to
determine a more realistic approach. The net asset basis was found more effective in
securities valuation.
This research study employed the primary and secondary media of data collection. The
primary data were personal interviews and observations, while the secondary data used
were the pricing memorandum, annual reports and accounts of selected companies, the
daily official list of the Nigeria Stock Exchange.
Also it was discovered that existing literature on valuation of securities have propounded
many models which tend to be too theoretical and difficult for a perfect market operation.
The net asset basis has been applauded as a more realistic valuation method than the
maintainable earnings approach as it takes into consideration the effect of inflation on the
economy through its revaluation process and methods.
Description
BEING PROJECT SUBMITTED TO THE POSTGRADUATE SCHOOL
AHMADU BELLO UNIVERSITY, ZARIA IN PARTIAL FULFILMENT
OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION (MBA) OF AHMADU
BELLO UNIVERSITY (ABU) ZARIA.
DEPARTMENT OF BUSINESS ADMINISTRATION
FACULTY OF ADMINISTRATION
AHMADU BELLO UNIVERSITY
ZARIA.
JULY 2004
Keywords
SECURITIES,, VALUATION,, PRIMARY,, MARKET,, NIGERIA, CASE,, STUDY,, UNION,, MERCHANT,, BANK,, LIMITED,, investment,, banking,, subsidiary,, Plc,