Sovereign Trust Jumps by 45% as Investors Bet on Insurance Stocks
Sovereign Trust Insurance Plc jumped by more than 45% as insurance stocks get popular among equities investors in the Nigerian market, details from its weekly trading performance revealed. Insurance stocks were generally low priced in the stock market.
The latest, which shifted the insurance index higher by 26.91%, could kickstart a new investment story in the segment, analysts said. Details from the Nigerian Exchange showed that the penny stock jerked up significantly ahead of the fourth quarter of the financial year 2024 earnings release.
Last week, its share price rose from 90 kobo to settle at N1.35, its 52-week high on the Nigerian Exchange. This positive price movement lifted the market value of the company’s 14,228 billion shares outstanding to N10.207 billion.
Following strong buying momentum, the Sovereign Trust Insurance share price is trading at a significant distance above its 53-week low price of 36 kobo. Stockbrokers noted that sectoral performance was driven by the insurance index. Detail revealed that the insurance index (+26.91%) climbed to reach 847.59 points.
The performance was helped by sustained rally in insurance tickers like WAPIC (+44.92%), CORNERST (+33.03%), and SUNUASSUR (+27.92%), amongst others
EARNINGS
Sovereign Trust Insurance Plc grew profit by 180% year on year in the third quarter of financial year 2024, details from its unaudited report for 9 months showed. The insurance company posted N11.496 billion as net income at the end of 9-month 2024 earnings period, as against N535.349 million it recorded in the comparable period in 2023.
The improved bottom line was helped by strong growth in insurance revenue. In the period, insurance revenue surged by 98% year on year to settle at N33.41 billion, from N16.838 billion in the comparable period in 2023.
Insurance services expenses for the period grew by 72% year on year to settle at N10.921 billion, from N6.356 billion in the comparable period in 2023. Its net expenses from reinsurance contracts held spiked by 132% year on year to NN19.285 billion at the end of 9-month of financial year 2024.
At the end of the third quarter of 2024, Sovereign Trust Insurance achieved 47% year on year growth in insurance services results for the period, which settled at N3.204 billion from N2.175 billion.
The company’s investment return surged by 69% year on year to N807 million from about N477 million. This helped to reduce negative effects of hefty net finance costs on earnings per share. In the period, Sovereign Trust Insurance Plc reported that its net finance costs grew by N486% year on year to N110.917 million, reversing previous net finance income posted in the equivalent period in 2023.
Due to its earnings beat, total equity of the company grew by 39% to N14.161 billion as regulatory begins to plan to recapitalise the insurance sector. #Sovereign Trust Jumps by 45% as Investors Bet on Insurance Stocks 2025 Budget: N13trn Deficit to be Financed Through Borrowing – Edun
