Equities Market Falls to 10-month Low on Continuing Bearish Trend

By Goddy Egene

The bearish sentiments in the Nigerian equities market continued last week pushing the market indicators to 10 months low.

While the Nigerian Stock Exchange (NSE) All-Share Index (ASI) shed 2.89 per cent to 35,446.47, market capitalisation also fell below the N13 trillion benchmark to close at N12.9 trillion.

The decline was the largest week-on-week decline since June 2018, while the new level of the NSE ASI was the lowest since October 2017. Following the fall recorded for two consecutive weeks, the year-to-date (YTD) decline has worsened to 7.3 per cent.

All sectoral indices closed negative, with the NSE Industrial Goods Index leading with a decline of 4.4 per cent.  The NSE Banking Index closed 1.35 per cent lower while the NSE, despite the attractive dividends of 30 kobo apiece recommended by Guaranty Trust Bank Plc and Zenith Bank Plc.

Commenting on the performance, analysts at Cordros Capital Limited said, “In the short to medium term, sell-offs are likely to persist in the absence of a near-term positive trigger, and amidst brewing political concerns. However, macroeconomic fundamentals remain stable and supportive of recovery in the long term.”

Daily Performance

The Nigerian equities market started the week on a bearish note following losses by bellwether stocks such as Dangote Cement Plc, Nigerian Breweries Plc, GTBankPlc, FBN Holdings Plc.

The benchmark index, the Nigerian Stock Exchange (NSE) All-Share Index, declined by 0.06 per cent to close at 36,479.42, while market capitalisation ended lower at N13.32 trillion. A total 25 stocks depreciated compared with 21 that appreciated.  Ikeja Hotel Plc led the laggards, shedding 9.9 per cent, trailed by Aluminium Extrusion Plc with 9.7 per cent. Beta Glass Plc fell and United Capital Plc went down by 9.09 per cent, just as NSL Technology Plc and LASACO Assurance Plc lost 8.3 per cent apiece.

On the other positive side, Consolidated Hallmark Insurance Plc and Niger Insurance Plc led the advancers with 10 per cent apiece. Union Diagnostic and Clinical Services Plc and Sunu Assurance Plc appreciated nine per cent apiece.

Lafarge Africa Plc, Neimeth International Pharmaceuticals Plc and Diamond Bank Plc chalked up 8.9 per cent, 8.3 per cent and 6.8 per cent respectively.

However, performance across sectors was bullish as four of five traced indicators indices closed higher. The NSE Industrial Goods Index led with a gain of up two per cent followed by the NSE Insurance Index and NSE Banking Index that appreciated one per cent and 0.9 per cent in that order.

Similarly, the NSE Oil & Gas Index gained 0.4 per cent.  The NSE Consumer Index was the loner loser, shedding 0.5 per cent.

Furthermore, analysts at Cordros Capital Limited stated, “In our view, selloffs are likely to persist in the near-to-medium term, in the absence of a near-term one-off positive catalyst. However, stable macroeconomic fundamentals remain supportive of recovery on the long term.”

 The market fell further as depreciation in the share prices of Seplat Petroleum Development Company Plc, Guaranty Trust Bank Plc, Lafarge Africa Plc, United Bank for Africa Plc and Zenith Bank Plc  led to a bearish close for the equities market for the second day.

The Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell 0.46 per cent to close lower at 36,333.80, compared with the marginal depreciation of 0.06 per cent the previous day.

The decline has pulled the year-to-date (YtD) decline to a new low of 4.99 per cent. Although there 23 price gainers, compared with 21 losers, losses by highly capitalised tickers made the market to closed lower.

However, the volume and value of trades advanced by 36.07 per cent and 10.43 per cent respectively.

According to analysts at Meristem Securities Limited, “the mood in the market was largely downbeat, despite marginal gains on tickers in the consumer goods sectors. Selling pressure on many counters across the sectors, particularly the heavily weighted stocks in the banking sector dragged the day’s market return.”

Also speaking, analysts at Cordros Capital said, “Our outlook for equities in the short to medium term remain conservative, amidst brewing political concerns, and the absence of a one-off positive trigger. However, stable macroeconomic fundamentals remain supportive of recovery in the long term.”

The negative sentiments and low demand pushed the market to hit   a low ebb on Wednesday with investors staking only N730 million on 114 million shares, showing a decline of 67.5 per cent, compared with the N2.245 billion invested in 248 million the previous day. Also, the year-to-date decline of the benchmark index worsened to 5.1 per cent on persistent bear run.

The NSE ASI fell 0.09 per cent to close lower at 36,299.82, thereby bringing the YTD to 5.1 per cent, the lowest level since October 2017. Also, market capitalisation shed N12.4 billion to be at N13.2trillion.

Although 16 stocks shed value compared with 19 others that went up, depreciation recorded by  highly capitalised counters such as  Oando, GTBank, Total Nigeria, United Bank for Africa Plc and Sterling Bank  Plc led to the lower close.

However, Mutual Benefits Assurance Plc led the price losers with  9.6 per cent, trailed by NSL Technology Plc with 9.0 per cent. Union Diagnostic shed 7.6 per cent, just as Cutix Plc and Oando Plc went down by 5.8 per cent and 4.3 per cent in that order.

On the other hand, Unity Bank Plc led the bulls with 9.3 per cent followed by Sovereign Trust Insurance Plc with 8.7 per cent.  Neimeth International Pharmaceuticals Plc, Red Star Express Plc and UACN Property Development Company Plc added 8.4 per cent, 6.5 per cent and 5.8 per cent respectively.

The market sustained the bearish trend on Thursday as investors continued to book profit in some large-cap stocks such as FBN Holdings (-4.5 per cent), Zenith Bank Plc. (-0.6 per cent) and Double One (-5.7 per cent).

Consequently, the NSE ASI went down by 0.2 per cent to close at  36,232.66 points while YTD loss deteriorated to -5.3 per cent.

  Investors lost N21.3 billion as market capitalisation fell to N13.2 trillion, but activity level strengthened as volume and value of stocks traded increased 65.2 per cent and 76.9 per cent to 188.3 million shares and N1.3 billion respectively. The most traded stocks by volume were UBA (27.3 million shares), Law Union & Rock Insurance Plc (25.0 million shares) and Zenith Bank (19.9 million shares) while Zenith Bank (N471.4 million), UBA (N260.2 million) and GTBank (N158.8 million) led by value.

Market Turnover

Investors  traded only 925.630 million shares worth N8.333 billion in 15,565 deals   last week compared with  1.391 billion shares valued at N20.316 billion that exchanged hands  in 20,064 deals the previous week.

The Financial Services Industry  led the activity chart with 680.751 million shares valued at N5.283 billion traded in 8,524 deals,  thus contributing 73.54 per cent and 63.40 per cent to the total equity turnover volume and value respectively. The Healthcare Industry followed with 47.664 million shares worth N31.197 million in 531 deals. The third place was occupied by Conglomerates Industry with a turnover of 40.814 million shares worth N63.710 million in 728 deals.

Price Gainers and Losers

Meanwhile, 20 equities appreciated in price during the week, lower than 34 in the previous week, while 47 equities depreciated in price, lower than 48 equities of the previous week.  Neimeth International Pharmaceuticals Plc led the price gainers with 33.3 per cent, trailed by Niger Insurance Plc with 30.0 per cent. Newrest ASL Nigeria Plc  chalked up  10.0 per cent. Eterna Plc and Livestock Feeds Plc garnered 8.2 per cent and 7.8 per cent respectively.

Other top gainers included: Consolidated Hallmark Insurance Plc (6.6 per cent); UACN Property Development Company Plc (5.8 per cent); International Breweries Plc (4.9 per cent); Unity Bank Plc (4.7 per cent) and UAC of Nigeria Plc (3.5 per cent).

Conversely, Secure Electronic Technology Plc led the price with 19.4 per cent, trailed by Cornerstone Insurance Plc with 13.7 per cent. Ikeja Hotel Plc and Mutual Benefits Assurance Plc shed 10.8 per cent respectively. Other top price losers were: Linkage Assurance Plc, Law Union and Rock Insurance Plc; Vitafoam Nigeria Plc; Glaxosmithkline Consumer Nigeria Plc, CAP Plc and Veritas Kapital Assurance Plc that went down by 10 apiece.