Stock Market Reverses Gains to Close in Red

WEEKLY REPORT

By Goddy Egene and Nosa Alekhuogie

Profit taking and investment diversion to fixed income securities combined to reverse the gains recorded by the stock market the previous week to close lower last week. The market has appreciated by 1.11 per cent the previous week defying the disappointing second quarter (Q2) economic data released by the National Bureau of Statistics (NBS).

However, the positive run could not be sustained last week as the market   closed lower after shedding N61 billion in capitalisation. The Nigerian Stock Exchange (NSE) All-Share Index (ASI) declined by 0.65 per cent to close at 27,577.52, while market capitalisation settled at N9.5 trillion. Similarly, all other Indices finished lower during the week, with the exception of the NSE Main Board Index, NSE Insurance Index, NSE Consumer Goods Index and the NSE Pension Index that appreciated by 0.01 per cent, 0.12 per cent, 0.50 per cent and 0.26 per cent respectively while the NSE ASeM Index closed flat.  Although market proceedings were positive for most of the week, huge losses recorded in earlier sessions on Monday and Tuesday, outweighed the marginal gains, hence the market closed the week in the red.

Daily   Performance Summary

The market opened on Monday with a bearish session as the ASI depreciated by 0.18 per cent to close at 27,707.12. The decline resulted from depreciation in the share prices of PZ Cussons, Nigerian Breweries, GTBank, FBN Holdings and Dangote Cement  Plc among others. The total value of stocks traded on the first day of the week stood at   N1.57 billion, down by 53.36 per cent  from N3.37bn recorded  the previous last Friday. The total volume of stocks traded was 195.02 million in 3,221 deals.

The market  sustained  the bearish momentum on Tuesday  as weakened sentiment in  Dangote Cement Plc, Zenith Bank Plc, FBN Holdings Plc pulled the ASI down by 0.73  per cent to close at 27,503.81, while  market capitalisation shed N69.8 billion  to close at N9.4 trillion. Activity level was mixed as volume traded declined 9.4 per cent while value traded rose 20.1 per cent  to 176.8 million shares  and N1.9 billion respectively. Stocks within the Insurance Index were the outliers in the broad selling pressure witnessed today as the index closed flat. The NSE Banking Index declined the most, down 1.3 per cent on losses in Zenith Bank (-2.3 per cent) and FBN Holdings (-2.9 per cent). The  NSE Oil & Gas index (-1.0 per cent) followed closely due to sell-offs in Forte Oil Plc (-2.8 per cent). Similarly, the  NSE Industrial and Consumer Goods indices were down 0.7 per cent and 0.04 per cent  respectively.

The market rebounded on Wednesday, though marginally by 0.07 per cent on Wednesday after two consecutive days of losses. The ASI closed at 27,522.62,

The appreciation recorded in the share prices of Lafarge Africa, Unilever, Nigerian Breweries, FBN Holdings and Guinness were responsible for the day’s gain.

Value of trading rose by 90.2 per cent to  N3.59 billion, up from N1.89 billion, while volume traded was  295.70 million shares  in 3,709 deals.

Bargain hunting in  fast moving consumer goods further drive the market up on Thursday as the ASI rose by 0.2 per cent to close at 27,880.46, while market capitalisation added N17.6 billion to be at N9.5 trillion. Nestle Nigeria and Nigerian Breweries Plc   where the major drivers of the appreciation recorded on Thursday.

The equity market closed the   last day of the week with a marginal appreciation of 0.01 per cent. The ASI   closed at   27,577.52 following gains by United Bank for Africa Plc, Stanbic IBTC, Unilever, Access Bank and Guinness Nigeria Plc.

The total value of stocks traded  on Friday  was N1.52 billion, down by 12.45 per cent  from N1.74 billion the previous day. The total volume of stocks traded was 272.84 million in 2,843 deals. The three most actively traded stocks were: UBA (76.32 million), Ikeja Hotels Plc (37.29 million) and Diamond Bank (28.44 million).

Market turnover

In all, investors traded  a total of 1.183 billion shares worth N10.300 billion in 16,522 deals  for the week on the floor of the exchange in contrast to a total of 1.115 billion shares valued at N13.817 billion that exchanged hands  the previous week in 16,083 deals. The Financial Services Industry remained the most active recording  with 1.015 billion shares valued at N7.136 billion traded in 11,012 deals. The sector thus contributed  85.83 per cent and 69.28 per cent  to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 69.777 million shares worth N473.308 million in 564 deals. The third place was occupied by the Services Industry with a turnover of 42.223 million shares worth N75.881 million in 202 deals. Trading in the top three equities – UBA Plc, GTBank and FBN Holdings Plc accounted for 444.004 million shares worth N4.958 billion in 4,153 deals, contributing 37.53 per cent and 48.13 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 943 units of Exchange Traded Products (ETPs) valued at N1.357 million executed in 28 deals, compared with a total of 29,242 units valued at N283,495.57 transacted  the preceding  week in 42 deals.

Similarly, a total of 9,140 units of Federal Government Bonds valued at N9.198 million were traded in six  deals compared to a total of 4,470 units of Federal Government Bonds valued at N4.313 million transacted the previous week  in  eight  deals.

Gainers and losers

The price movement chart showed that 24 equities appreciated last week lower than 28 equities of the previous week. Conversely, 38 equities depreciated in price, higher than the 31 equities of the previous week, while 118  equities remained unchanged lower than 121 equities recorded in the preceding week. May & Baker Nigeria Plc led the price gainers with 22.2 per cent. Conoil Plc followed with 15.6 per cent as investors reacted positively to the company’s more-than-expected 2015 results in which it recommended a dividend of 300 kobo per share. Cutix Plc appreciated by 7.3 per cent, while Diamond Bank Plc and Union Bank of Nigeria Plc rose by 5.9 per cent. Guinness Nigeria Plc and Oando Plc garnered 5.6 per cent and 5.0 per cent respectively. Other top price gainers included: Transnationwide Express Plc (4.9 per cent); Ikeja Hotel Plc (4.4 per cent) and UBA Plc (3.9 per cent).

Conversely, Wema Bank Plc led the price losers’ chart with 12.0 per cent, trailed by Julius Berger Nigeria Plc with 9.7 per cent. Unity Bank Plc and Portland Paints and Products Nigeria Plc shed 9.1 per cent, while Caverton Offshore Support Group Plc went down by 9.0 per cent. Forte Oil Plc declined by 6.7 per cent, just as Nigerian Aviation Handling Company Plc, BOC Gases Plc and African Paints (Nigeria) Plc depreciated by 6.4 per cent, 4.8 per cent and 4.6 per cent.