Lagos – The Association of Stock broking Houses of Nigeria (ASHON) on Friday lauded four quoted firms for releasing profit warning reports to investors at the Nigerian Stock Exchange.
The President of ASHON, Mr Emeka Madubuike, told the News Agency of Nigeria (NAN) in Lagos that the warning would aid investors in minimising losses.
Madubuike said that profit warning was essential for investment decisions and good for the growth and development of the capital market.
Four companies, including Diamond Bank Plc., Computer Warehouse Group, FBN Holdings and Ecobank Transitional Incorporated recently released profit warnings to investors.
Profit warning is a warning declaration issued by a listed company to investors through a stock exchange.
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It warns that the profit of the company in the coming quarter will obviously decline or that the company may record a loss.
Madubuike described the release of profit warning by some companies as a good development that would bring the market at par with its contemporaries.
“With the profit warning, investors will not panic when the company releases its result because the investor’s mind had been prepared ahead.”
“Profit warnings are standard market practice, although most firms do not give such warnings.”
He said that the panic created by Oando’s 2014 audited report would have been averted if the company had released profit warning to alert investors on its poor earning.
The ASHON boss said that investors were yet to recover from the shock created by the result. (NAN)
