No Respite as Market Records Third Consecutive Weekly Decline

By Goddy Egene

The equities market recorded its third consecutive decline last week as investors confidence remained weak. 

Out of the four trading sessions, four were bearish with Dangote Cement Plc moving the market to its largest loss in 52 weeks last Thursday.

Although the market rebounded last Friday, with a gain of 1.29 per cent, that was not enough to take the bourse out of its negative territory.

Consequently, the Nigerian Stock Exchange   All-Share Index (NSE ASI) fell 0.51 per cent to close the week at 35,266.29. Market capitalisation shed N741billion to close lower at N12.871 trillion.

Accordingly, month-to-date and year-to-date (YtD) decline increased to 4.73 per cent and 7.78 per cent, respectively. All sectoral indices closed negative, save for the Industrial Goods (+1.29%) index. Market breadth for the week remained negative, with 52 losers and 16 gainers.

Analysts at Meristem Securities Limited said investors have held their bearish stance towards the market, as reflected by the negative YtD return.

“Sell–offs on four of five trading days kept the market in the negative territory this week. Investors have remained sceptical about the Nigerian equities market ahead of the upcoming elections and we have seen significant capital flight from the equities market,” they said.

Daily Performance

The year-to-date decline of the index weakened to worsened to 7.4 per cent last Monday, when tradingresumed.  Specifically, the NSE ASI closed lower at 35,399.28, while market capitalisation shed N17 billion to end at N12.9 trillion.  The bears were in total control as 26 stocks lost value compared with only 14 that added value.

Although, highly capitalised counters such as United Bank for Africa Plc, Guinness Nigeria Plc, GTBank Plc and Zenith Bank Plc, were largely responsible for negative performance of the market, Mutual Benefits Assurance Plc led the gainers with 9.1 per cent apiece.

Livestock Feeds Plc, Wema Bank Plc and NSL Technology shed 8.7 per cent, 7.3 per cent, 6.9 per cent and 6.9 per cent respectively.

On the positive side, Eterna Plc led the price gainers with 9.9 per cent, trailed by UAC of Nigeria Plc with 7.6 per cent.  Courtville Business Solutions Plc and CavertonOffshore gained 5.0 per cent and 4.7 per cent respectively.

International Breweries Plc and Double One Plc garnered 4.5 per centand 2.2 per cent in that order.

According to market analysts, the mood in the Nigerian equities market during the week was still downbeat as weak investor appetite still characterised the market.

“We noticed that most of the counters across all sectors, especially heavyweight counters, are trading at their year low prices. Therefore, we expect bargain hunting activities to resume in the coming days, driving the market’s performance up,” they said.

Meanwhile, the NSE Banking Index emerged the biggest loser in the trading session, shedding 0.8 per cent.   It was trailed by the NSE Insurance Index and NSE  Oil & Gas Index that went down by 0.5 per cent and 0.3 per cent respectively.

The downward trend continued Tuesday, driven by banking and insurance stocks. The index recorded its seventh consecutive decline on that day, shedding 0.31 per cent to close at 35,288.23. Similarly, the market capitalisation shed N40.5 billion to close lower at N12.9 trillion.

A total of 34 stocks depreciated, while 13 appreciated. Counters in the financial services sector of the market comprising banking/ insurance and consumer foods stocks dominated the trading session.  GTBank Plc, FBN Holdings Plc,  Access Bank Plc, Union Bank of Nigeria Plc,  Ecobank Transnational Incorporated, Nigerian Breweries Plc,  Flour Mills of Nigeria Plc are among the price losers.

However, ABC Transport Plc and Union Diagnostic led the laggards’ table with 10 per cent apiece, trailed by Northern Nigerian Flour Mills Plc and Eterna Plc that went down by 9.7 per cent apiece. UAC Nigeria Plc and Continental  Reinsurance Plc shed 9.6 per cent and 9.4 per cent in that order.

Mutual Benefits Assurance once more, led the price gainers, rising 10 per cent, followed by Custodian Investment Plc with 9.9 per cent. Livestock Feeds Plc and Consolidated Hallmark Insurance Plc garnered 9.5 per cent and 9.3 per cent respectively.

 Activity level was mixed as volume traded improved 2.5 per cent to 164.0 million shares units while value traded fell 27.2 per cent to N1.6 billion.

However, YtD hit a new year low last Wednesday as the market recorded its eight-consecutive fall. The market declined 0.60 per cent to close at 35,074.82, while market capitalisation depreciated by N77.9 billion to be at N12.8 trillion.

The depreciation recorded in the share prices of some highly capitalised companies such as United Bank for Africa Plc, Nestle Nigeria Plc, Zenith Bank Plc, Cadbury Nigeria Plc, and GTBank Plc were mainly responsible for the loss recorded.

In all, 29 stocks shed value compared with 12 stocks that appreciated. UACN Property Development Company Plc led the price losers with 10 per cent, trailed by Berger Paints Nigeria Plc with 9.7 per cent.  Learn Africa Plc and Newrest ASL Nigeria Plc and Oando Plc went down by 9.4 per cent, 9.1 per cent and 9.0 per cent respectively.

The 12 price gainers are led by Linkage Assurance Plc with 9.6 per cent, followed by Union Diagnostic and Clinical Services Plc that appreciated by 3.7 per cent. FBN Holdings Plc, May & Baker Nigeria Plc and Total Nigeria Plc garnered 3.1 per cent, 3.0 per cent and 2.7 per cent in that order.

Commenting on the market performance, analysts at Meristem Securities Limited said: “Investor appetite weakened further today as the YTD return pared to a new year low of -8.28 per cent. Although modest bargain hunting activities were recorded in the Insurance sector, today’s performance was dragged by sell offs on blue-chip counters across the market. This was reflected by the 0.70 per cent decline in the NSE 30 index.

The losing streak continued Thursday causing the index to fall 1.29 per cent and closed below the below 35,000 points at  34,618.43. Losses suffered by   United Bank for Africa Plc, Access Bank, Zenith Bank, Lafarge Africa, and FBN Holdings were mainly responsible for the decline recorded.

There were 29 price losers as against 17 price gainers.  Newrest ASL Services Plc led the price losers, shedding 10 per cent, trailed by Neimeth International Pharmaceuticals Plc with 9.5 per cent. Skye Bank Plc lost 8.7 per cent, while Continental Reinsurance Plc and Regency Alliance Insurance Plc dipped by 8.5 per cent and 8.3 per cent in that order.

Sunu Insurance Plc led the stocks that escaped from the bears, chalking up 10 per cent. Portland Paints and Products Plc garnered 9.7 per cent. Linkage Assurance Plc, Oando Plc and AXA Mansard Insurance Plc gained 8.8 per cent, 8.7 per cent and   6.3 per cent in that order.

However, the market rebounded on Friday as the index appreciated by  1.87 per cent   to close at 35,266.29. The growth was propelled by gains recorded by Dangote Cement, Unilever Nigeria Plc, Stanbic IBTC Holdings, Ecobank Transnational Incorporated Plc and Transcorp.

Market Turnover

Meanwhile, market total turnover improved last week as investors traded 1.147 billion shares worth N12.546 billion in 16,649 deals,  up from  925.630 million shares valued at N8.333 billion that exchanged hands  in 15,565 deals the previous week.

But the Financial Services Industry remained most active, leading with 891.785 million shares valued at N8.251 billion traded in 9,187 deals, thus contributing 77.78 per cent and 65.77 per cent to the total equity turnover volume and value respectively.

The Consumer Goods Industry followed with 79.149 million shares worth N2.631 billion in 2,931 deals. The third place was occupied by Conglomerates Industry with a turnover of 60.294 million shares worth N93.993 million in 694 deals.

Trading in the top three equities namely – N.E.M Insurance Plc, United Bank for Africa Plc and Mansard Insurance Plc (measured by volume) accounted for 360.623 million shares worth N1.967 billion in 970 deals, contributing 31.45 per cent and 15.68 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 1,793 units of Exchange Traded Products (ETPs) valued at N282,571.59 executed in nine deals, compared with a total of 1,727 units valued at N333,925.78 that was transacted theprevious  week in  nine  deals.

Price Gainers and Losers

A look at the price movement chart showed that 56 stocks depreciated week higher than 47 equities of the previous week, while 16 equities appreciated lower 20 in the previous week.

Neimeth International Pharmaceutical Plc led the price losers with 25 per cent, trailed by Secure Electronic Technology Plc with 20.6 per cent. Skye Bank Plc and Berger Paints Nigeria Plc shed 18.6 per cent and 18.1 per cent respectively, while Continental Reinsurance Plc  shed 17.1 per cent.

Other top price losers for the week were: WAPIC Insurance Plc (12.5 per cent); Union Diagnostic & Clinical Services Plc (12.1 per cent); Learn Africa Plc (11.8 per cent); Oando Plc (11.7 per cent) and UBA (11.6 per cent).

On the other hand, International Breweries Plc led the price gainers with 10 per cent, trailed by Portland Paints & Products Nigeria Plc with 9.7 per cent. Sovereign Trust Insurance Plc chalked up 8.3 per cent, while AXA Mansard Insurance Plc garnered 7.1 per cent.

Unilever Nigeria Plc, Cutix Plc and Custodian Investment Plc advanced by 4.5 per cent and 3.9 per cent respectively. Dangote Cement Plc, Linkage Assurance Plc and Niger Insurance Plc gained 2.8 per cent, 2.7 per cent and 2.5 per cent in that order.