Equities Market Sustains Rally on Strong Investor Sentiment

WEEKLY REPORT

The bulls remained in control of the equities market as the market recorded its third consecutive gain on sustained strong investors’ sentiments.  The Nigerian Stock Exchange (NSE) All-Share Index, which had appreciated the previous week, rose to a new high last week. Specifically, the NSE ASI 3.46 per cent to close at 39,257.53, while market capitalisation added N457.6 billion to close at N13.672 trillion.

With last week’s gain, the month-to-date and year-to-date returns increased to 3.46 per cent and 46.08 per cent respectively.

Despite the bullish performance,  three  of  five  sector indices appreciated while two depreciated. Leading the gainers was the NSE  Consumers Goods Index, up 6.1 per cent.  The NSE  Banking Index  followed with a gain of 5.3 per cent higher, while the NSE Insurance Index  rose by 0.2 per cent. Conversely, the NSE Industrial Goods Index shed 1.4 per cent just as the NSE   Oil & Gas  Index fell by 0.5 per cent respectively.

According to analysts at Cordros Capital Limited, “notwithstanding likely profit taking, overall,  we expect the market to remain upbeat, as market fundamentals remain strong amid improving macroeconomic conditions.” 

Daily Market Performance

Still in a bullish mood, the market resumed for the week on a positive note with the  NSE ASI  rose by 0.08 per cent to close at 37,974.58 points. That was actually the 4th consecutive day of a positive close. Monday’s positive performance was buoyed by buying interest in consumer goods bellwethers – Nestle Nigeria Plc, Nigerian Breweries and FBN Holdings Plc.

The total value of stocks traded was N6.36 billion invested in 500.19 million shares in 4,966 deals, down by 70.27 per cent from N21.38bn recorded  the previous trading day.

The three most actively traded sectors were Financial Services (368.81 million shares), Conglomerates (91.93 million shares), and Consumer Goods (21.91 million shares), while the three most actively    traded stocks were: Custodian and Allied (70 million shares), FBN Holdings (56.86 million shares) and Zenith Bank (55.62 million shares).

Sector performance was mixed with three indices trending northwards and the other two  indices closing bearishly. The NSE Consumer Good Index appreciated the most, gaining 0.4 per cent. Similarly, the NSE Insurance Index rose by 0.2 per cent, while the NSE Industrial Goods Index added 0.1 per cent.

Contrarily, the losers were the  NSE Banking  Index and NSE Oil & Gas  Index  shedding 0.6 per cent and 0.5 per cent respectively.

The market continued with its gaining streak rising by 1.37 per cent to be at 38,494.43.  Similarly, the market capitalisation climbed to N13.4 trillion. Appreciation in  the share prices of FBN Holdings, UBA, Nigerian Breweries, Dangote Sugar, and Unilever was mainly responsible for the gain recorded in the index.

“The rebound in the prices of banking stocks today strengthened the positive performance recorded in the equity market. The stocks of FCMB, Fidelity and Diamond recorded strong demand, traded at the upper limit and closed on bid. The renewed bargain hunting and increased activities are indications of the gradual take-off of the anticipated year-end rally,” analysts at FSDH Research said.

The market hit a new high on Wednesday on the continuing rally in the market with the NSE ASI crossing  39, 000 mark to 39,075.30, showing a gain of 1.51 per cent.  The appreciation recorded in the share prices of FBN Holdings, UBA, Nigerian Breweries, ETI, and Zenith Bank bolstered the performance.

The Nigerian equities market extended its bullish run for the fourth consecutive day this week as investors’ positive sentiments continued. As a result, the Nigerian Stock Exchange (NSE) All-Share Index (NSE ASI) appreciated by 1.17 per cent to close higher at 39,534.14. Similarly, market capitalisation added N159.8 billion to close at N13.77 trillion.

The positive performance yesterday could be linked to gains recorded by Nigerian Breweries Plc, Nestle Nigeria Plc, Zenith Bank Plc, Ecobank Transnational Incorporated  and FBN Holdings Plc.

However, Union Bank of Nigeria Plc led the price gainers with 10.1 per cent trailed BY Fidelity Bank Plc with 7.5 per cent, while NAHCO Plc chalked up 7.2 per cent. Okomu Oil Palm Plc and FBN Holdings Plc garnered 7.1 per cent and 6.1 per cent respectively.

Conversely,  Total Nigeria Plc led the price losers with 5.0 per cent, trailed by AXA Mansard Insurance Plc with 4.6 per cent. NEM Insurance Plc shed 4.6 per cent, while Livestock Feeds Plc closed 4.1 per cent lower.

According to analysts at FSDH Research, the bullish momentum was sustained and largely driven by high demand for banking, consumer goods and insurance stocks

The analysts noted that although profit taking is expected to continue in the coming sessions, the market will remain positive and active as we approach year-end.

A further analysis of the  trading activities  shows that three sectors closed in the negative while two appreciated. The two gainers were the NSE  Consumer Goods Index  and the NSE Banking Index  that appreciated by   2.7 per cent  and 1.8 per cent  respectively  as a result of sustained buying interest in Nigerian Breweries Plc (+2.2 per cent), Nestle (+6.0 per cent) Zenith Bank (+5.6 per cent)  and Access Bank (+3.3 per cent).

On the other hand, the NSE Industrial Goods Index shed 0.8 per cent following   profit taking in Dangote Cement (-0.4 per cent).   In a similar vein,  the NSE  Insurance Index  fell   0.5 per cent following losses in AXA Mansard (-4.7 per cent) and NEM  Insurance (-4.6 per cent) while the NSE  Oil & Gas Index shed  0.4 per cent  as a result of to selloffs in Total Nigeria (-5.0 per cent).

Market Turnover

The market recorded a total turnover of 3.316 billion shares worth N36.451 billion in 29,771 deals were traded during the  week under review by investors compared with  in contrast to a total of 14.257 billion shares valued at N35.056 billion that exchanged hands  the previous  week in 17,379 deals.

The Financial Services Industry remained the most traded  led the activity chart with 2.785 billion shares valued at N26.075 billion traded in 18,293 deals, thus contributing 83.97 per cent  and 71.54 per cent  to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 247.639 million shares worth N1.330 billion in 1,333 deals. The third place was occupied by Consumer Goods Industry with a turnover of 185.560 million shares worth N5.976 billion in 6,137 deals.

Trading in the Top Three Equities namely – FBN Holdings Plc, Fidelity Bank Plc and Zenith Bank Plc (measured by volume) accounted for 958.742 million shares worth N11.355 billion in 6,765 deals. 

Price Gainers and Losers

A look at the price movement chart showed 47 equities that appreciated in price during the week 39  of the previous week, while  20 equities depreciated in price, lower than twenty-three 23 equities of the previous week.

FBN Holdings Plc led the price gainers with 26.3 per cent, trailed by Cadbury Nigeria Plc with 22.8 per cent. Fidelity Bank Plc chalked up 20.8 per cent, while Neimeth International Pharmaceuticals Plc garnered 18.9 per cent.

Other top price gainers include: Union Bank of Nigeria Plc (15.9 per cent); Access Bank Plc (15.5 per cent); FCMB Group Plc (14.7 per cent); Diamond Bank Plc ( 14.3 per cent); Sterling Bank Plc (13.0 per cent); NASCON  Allied Industries Plc( 11.9 per cent).

Conversely, Total Nigeria Plc led the price losers with   5.4 per cent, trailed by International Breweries Plc with 5.3 per cent. Chellarams Plc and Guinness Nigeria shed 4.9 per cent, just as Studio Press Plc went down by 4.7 per cent. AXA Mansard Insurance Plc declined by 4.6 per cent, Cement Company of Northern Nigeria Plc shed 3.7 per cent. Morison Industries Plc and  Lafarge Africa Plc went down by 3.6 per cent, just as Julius Berger Nigeria Plc closed 3.5 per cent lower.