Stock Market Remains Upbeat on Renewed Optimism

WEEKLY REPORT

By Goddy Egene and Eromosele Abiodun

The Nigerian equities market surged further last week as investors await the rumoured plan by the federal government to introduced flexibility into the current foreign exchange management regime. Besides, investors continued to react positively to the developments in the Oil & Gas sector, which resulted in increased buying interest across sectors.

The market was bullish in three of the five trading days driven by gains in market bellwethers including Nigerian Breweries Plc, Dangote Cement Plc and Guaranty Trust Bank Plc. Following the gains recorded during the week, the All Share Index appreciated for the 4th consecutive week, up 2.6 per cent to close at 27,116.45 while trimming year-to-date  losses to 5.3 per cent. In the same vein, investors gained N214.6bn as market capitalisation rose to N9.3 trillion.

The market had appreciated by 2.88 per cent the previous week.

Similarly, all other Indices finished higher during the week, with the exception of the NSE ASeM Index, NSE Insurance Index and the NSE Oil/Gas Index that declined by 0.03 per cent, 1.73 per cent and 0.76 per cent.

Daily Performance Summary

The market started on a positive note last Monday as gains across major sub-sectors drove the Nigerian bourse to a positive close, gaining 1.43 per cent. This performance was driven by gains in market bellwethers including Nigerian Breweries Plc, Dangote Cement Plc and Guaranty Trust Bank Plc, cancelling out bearish sentiments towards ETI Plc, Unilever Nigeria Plc and Stanbic IBTC Plc. Despite the positive close, market turnover of N2.1 billion was a  decline of 41 per cent while volume of trade estimated at 320 million units of shares came in lower by 43 per cent. A further breakdown of trading activities showed that Access Bank Plc and UBA Plc recorded the biggest volume with trade in excess of 48million and 40million units of shares respectively. Industrial index was up 2.27 per cent with gain in Dangote Cement Plc. This was followed by Banking tracker (1.85 per cent) with support from positive close in UBA Plc (9.37 per cent) and Guaranty Trust Bank Plc (2.51 per cent).

The bears halted the three day rally in the equity market on Tuesday as the NSE ASI depreciated by 0.61 per cent to close at 26,655.48 points. The depreciation recorded in the share prices of Forte Oil Plc, Guaranty Trust Bank Plc, Unilever Nigeria Plc, Zenith Bank Plc and FBN Holdings Plc were mainly responsible for the decline recorded in the index. Similarly, the market capitalisation depreciated by 0.61 per cent to close at N9.17 trillion compared with the appreciation of 1.43 per cent recorded the previous day to close at N9.23 trillion. The total value of stocks traded on the floors of the NSE on the day was N2.66 billion, up by 26.20 per cent from N2.11billion recorded the previous day.

Though investors’ sentiment, as gauged by market breadth index slipped into negative territory on Wednesday, gains in both banking (1.73 per cent) and consumer goods (0.35 per cent) tracker s drove the NSE ASI to a positive close. The index was up 0.41 per cent, ending the session at 26,763.86 points. This corresponds to a market capitalisation of N9.2 trillion. Positive sentiments towards Nigerian Breweries Plc, Zenith Bank Plc and Guaranty Trust Bank Plc were largely responsible for the day’s outcome, offsetting negative close in ETI Plc, Flour Mills Nigeria Plc and Unilever Nigeria Plc. Profit-taking on recent gains in Tiger Branded Consumers Goods Plc drove the consumer sector player to a negative losing 9.68 per cent, and as such led the list of 23 decliners. On the flip side, Afri Products Plc topped the list of 22 gainers with a 4.98 per cent return.

The NSE ASI sustained the previous day’s bullish run on Thursday, closing up by 0.99 per cent. This was driven by gains in Banking (4.62 per cent), Industrial tracker (1.18 per cent) as well as Oil and gas (1.07 per cent) index, offsetting profit-taking in Consumer Goods tracker (0.82 per cent). Investors’ wealth appreciated by N91billion as market capitalisation berthed at c.N9.28 trillion while the benchmark index strengthened by 264 points to close at 27,028.4 points. Gains in FCMB Group, Guaranty Trust Bank Plc and Eterna Plc contributed to the positive close in the index, offsetting bearish sentiment in NCR Plc, Union Homes Plc and Unilever Nigeria Plc. Similarly, market turnover strengthened by 33 per cent ending the session at N2.73 billion corresponding to volume of trade of about 498 million units of shares.

The Nigerian bourse closed the week in the green with the benchmark NSE-ASI rising by 0.33 per cent, trimming YTD return to 5.33 per cent.  Sentiments across sector were positive as Banking (1.85 per cent), Industrial (2.27 per cent), Consumer Goods (1.69 per cent) as well as Oil and Gas (1.29 per cent) tickers closed up. Similarly, activity level jumped by 32 per cent and 12 per cent respectively with market turnover crossing the N2bn mark, ending the session at N3.59 billion while volume of trade surged to about 559 million units of shares. Zenith Bank Plc and Access Bank Plc emerged the most traded stocks with over 100 million and 80 million units respectively. With 9.77 per cent gain, Diamond Bank Plc emerged the day’s best performing stocks, leading the list of 33 advancers.

Market Turnover

Investors traded 2.446 billion shares worth N13.145 billion in 23,680 deals  on the floor of the exchange  last week in contrast to a total of 1.826 billion shares valued at N14.468 billion that exchanged hands the previous week in 20,058 deals.

The Financial Services Industry remained the most active with 2.012 billion shares valued at N9.493 billion traded in 14,200 deals; thus contributing 82.26 per cent and 72.22 per cent to the total equity turnover volume and value respectively.

The Conglomerates Industry followed with 208.483 million shares worth N268.053 million in 1,134 deals. The third place was occupied by the Oil and Gas Industry with a turnover of 80.269 million shares worth N692.612 million in 2,826 deals.

Trading in the top three equities namely – Wema Bank Plc, Zenith Bank Plc and Access Bank Plc accounted for 871.331 million shares worth N5.297 billion in 3,956 deals, contributing 35.63 per cent and 40.30 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 307,411 units of Exchange Traded Products (ETPs) valued at N21.406 million executed in 38 deals, compared with a total of 382,448 units valued at N10.288 million transacted the prior week in 43 deals.

A total of 4,143 units of Federal Government Bonds valued at N4.248 million were traded in 8 deals compared to a total of 8,033 units of Federal Government valued at N8.923 million transacted the previous week in 6 deals.

Gainers and Losers

Meanwhile, a total of 35 equities  appreciated in price during the week, lower than 54 equities of the previous week. Thirty-seven equities depreciated in price, higher than 17 equities of the previous week, while 109 equities remained unchanged lower than 118 equities of the previous week.

The top 10 gainers were: Lafarge Africa Plc (N6.20), Conoil Plc (N3.94), Guaranty Trust Bank Plc (N1.47), Zenith Bank Plc (N1.25), UBA Plc (82 kobo), Oando Plc (71 kobo), Trans Nationwide Plc (15 kobo), Access Bank (52 kobo), Transcorp Plc (49 kobo) and John Holt Plc (6 kobo).

Conversely, the top 10 losers were: Unilever Nigeria Plc (N5.00), MRS Oil Plc (N3.94), Vitafoam Plc (N1.13), Tiger Branded Consumer Goods Plc (N1.19), NCR Plc (N1.48), Ikeja Hotel Plc (34 kobo), Fidson Plc (25 kobo), AIICO Insurance Plc (9 kobo), Sterling Bank Plc (18 kobo) and Union Homes (33 kobo).