Stock Market Recovers N78bn as Three Weeks Decline is Halted

By Goddy  Egene

The Nigerian bourse recovered part of losses of recent weeks as bargaining hunting in value stocks across sectors lifted the Nigerian Stock Exchange All-Share Index (NSE ASI) by 0.66 per cent to close at 32,540.17.  

The positive performance halted three consecutive weeks of losses recorded in the market, with the previous week suffering its heaviest weekly decline so far this year.

Growing political concerns, weak investor sentiments toward frontier and emerging markets have combined with other factors to drive the market down, making some of the stock prices to be very low.

However, bargain hunting by some discerning investors led to a rebound last week thereby improving the month-to-date and year-to-date returns to -6.62 per cent and -14.91 per cent, respectively.

 All major sectoral indices – Banking (+2.67 per cent), Oil & Gas (+2.60 per cent), Industrial Goods (+2.43 per cent) and Consumer Goods (+0.96 per cent) – closed in the green.   But NSE ASeM, NSE Insurance and NSE Lotus indices  finished lower by 1.51 per cent,4.90 per cent  and 0.26 per cent in that order.

 Daily Performance

 The bearish trend  continued in the first day of last week NSE ASI  fell 0.39 per cent to close at 32,327.59. The depreciation recorded in the share prices of companies such as GTBank, UBA, Nestle Nigeria Plc, Nigerian Breweries and UAC of Nigeria were mainly responsible for the decline recorded by the index.

However,  the market rebounded on Tuesday  following bargain hunting in bellwether counters.  Consequently, the index appreciated by 0.56 per cent to close at 32,381.00, while market capitalisation added N65.4 billion to close higher at N11.8 trillion.

Specifically, gains recorded  by Nestle Nigeria Plc, United Bank for Africa Plc, FBN Holdings Plc bolstered the performance of the market.

Despite the positive performance, analysts at Cordros Capital Limited said they maintained their negative outlook for the market in the short-to-medium term.

“We reiterate our negative outlook for the equities market in the short-to-medium term, amidst the lingering rout in emerging market assets, political concerns ahead of the 2019 elections, and the absence of a positive market trigger. However, positive macroeconomic fundamentals remain supportive of a recovery in the long term,” they said.

A total of 27 stocks appreciated while 18 depreciated.  First Aluminium Plc led the price gainers with 10 per cent, trailed by Prestige Assurance Plc with 9.6 per cent. Royal Exchange Plc and Unity Bank Plc chalked up 9.5 per cent and 9.4 per cent respectively. LASACO Assurance Plc, which is preparing to issue 40 billion shares to raise additional capital also closed among the price gainers.

Conversely, Redstar Express Plc led the price losers with 9.0 per cent, followed by Standard Alliance Insurance Plc and Cornerstone Insurance Plc with 8.7 per cent apiece. Sovereign Trust Insurance Plc, Universal Insurance Plc shed 8.3 per cent and 8.0 per cent in that order.

Meanwhile, activity level strengthened as value and volume traded inched 23.3 per cent and 67.9 per cent to N2.7 billion and 269.8 million shares respectively. Access Bank Plc (N679.8 million), Zenith Bank (N338.4 million), and International Breweries Plc (N229.7 million) led the most traded stocks by value while Access Bank Plc (84.9 million shares ), Skye Bank Plc  (22.9 million shares ) and Zenith Bank  (16.4 million shares ) were the top traded stocks by volume.

In terms of sectoral performance, four of the five sectors tracked closed bullishly. The NSE Banking Index led gainers with   1.3 per cent.  The NSE Oil & Gas Index and NSE   Consumer Goods Index   rose 0.3 pe cent each. The NSE Industrial Index went up by 0.02 per cent, while the NSE Insurance Index was the lone loser, shedding 0.2 per cent.

The market declined by marginal 0.02 per cent  on Wednesday  despite higher number of price gainers. Although a total of 24 stocks appreciated, profit taking in International Breweries Plc, FBN Holding Plc and United Bank for Africa Plc led to the decline in the index.  

However, Forte Oil Plc led the price gainers with 10 per cent, trailed by Cement Company of Northern Nigeria Plc by 9.7 per cent.   Regency Alliance Insurance Plc and Sovereign Trust Insurance Plc appreciated by 9.09 each.

Prestige Assurance plc went up by 8.7 per cent, just Union Diagnostic & Clinical Services Plc garnered 8.5 per cent.

Other top price gainers included Linkage Assurance Plc (8.4 per cent); Union Bank of Nigeria Plc (6.4 per cent); AIICO Insurance Plc (6.2 per cent) and Skye Bank Plc (6.06 per cent).

 The market recorded a growth of 0.33 per cent to 32,480.89 as against a marginal growth of 0.02 per cent the previous day. Bargain hunting saw bellwether stocks gain more traction. Hence,  the positive close. In all, 25 stocks appreciated while 15 depreciated. Despite the gain recorded, analyst at Cordros Capital Limited said they remained conservative in their outlook.

“Our outlook for equities in the short to medium term remains 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,” they said.

Lafarge Cement Plc led the price gainers with 9.9 per cent, trailed by First Aluminium Plc with 9.6 per cent. UAC of Nigeria Plc garnered 8.8 per cent, just as Caverton and Regency Alliance Insurance Plc chalked up 8.3 per cent apiece.

Other top price gainers included: Skye Bank Plc (5.7 per cent); Berger Paints Nigeria Plc (5.3 per cent); United Capital Plc (4.9 per cent); Dangote Sugar Refinery Plc (4.6 per cent); Royal Exchange Plc (4.3 per cent);  Flour Mills of Nigeria Plc and FCMB Group Plc (4.1 per cent each).

Conversely,  Prestige Assurance Plc led the price losers with 9.6 per cent, trailed by Unity Bank Plc with 9.2 per cent. Honeywell Flour  Mills Plc shed 6.2 per cent, while AIICO Insurance Plc went down by 4.7 per cent.

Other top price losers were:Glaxosmithkline Consumer Nigeria Plc (4.5 per cent); Cement Company of Northern Nigeria Plc (4.4 per cent0 and Japaul Oil & Maritime Services Plc (4.1 per cent).

Meanwhile,  activity improved  as volume and value traded rose 18.9 per cent  and 32.1 per cent  to 226.0 million shares  and N2.3 billion respectively.

NEM Insurance Plc  (39.1 million shares ), First Aluminium  (36.5 million shares) and Zenith Bank Plc  (20.7 million shares) led the top traded stocks by volume while Zenith Bank  (N428.8 million), GTBank (N357.5 million ) and Seplat (N322.4 million) led top traded stocks in volume terms.

In terms of sector performance, three of five sectors advanced led by the NSE Industrial Goods Index with 2.4 per cent. The NSE Banking Index followed with 0.7 per cent, while the NSE Consumer Goods Index gained 0.2 per cent. On the flip side, the NSE Insurance Index and   NSE  Oil & Gas Index shed 0.3 per cent each.

Market Turnover

Meanwhile,  investors traded  1.370 billion shares worth N19.503 billion in 16,076 deals  in contrast to a total of 960.940 million shares valued at N18.329 billion that exchanged hands  the previous week in 16,896 deals.

The Financial Services Industry dominated  led the activity chart with 1.077 billion shares valued at N14.846 billion traded in 9,527 deals, thus contributing 78.6 per cent  and 76.1 per cent  to the total equity turnover volume and value respectively. The Services Industry followed with 78.255 million shares worth N351.507 million in 474 deals. The third place was Consumer Goods Industry with a turnover of 53.842 million shares worth N2.691 billion in 2,370 deals.

Trading in the top three equities namely – Guaranty Trust Bank, Access Bank Plc and Zenith Bank Plc accounted for 600.731 million shares worth N13.027 billion in 2,656 deals.

Also traded during the week were a total of 29,750 units of Exchange Traded Products (ETPs) valued at N449,662.50 executed in two  deals, compared with a total of 41,358 units valued at N1.148 million that was transacted the preceding week in  eight  deals.

A total of 9,710 units of Federal Government Bonds valued at N9.587 million were traded last  week in 19 deals compared with a total of 43,000 units valued at N42.491 million transacted two weeks ago in 36 deals.

Price Gainers and Losers

In terms of price movement, 50  equities appreciated  during the week, higher 13 in the previous week, while  25  equities depreciated in price, lower than 58 equities of the previous week.

Union Diagnostic & Clinical Services Plc led the price gainers with 26.6 per cent, trailed by First Aluminium Plc with 23.3 per cent. Forte Oil Plc chalked up 22.8 per cent, while Regency Assurance Plc went up by 18.8 per cent. 

UAC of Nigeria Plc garnered 16.2 per cent , while Union Bank of Nigeria Plc and Skye Bank Plc appreciated by 16.2 per cent and 16 per cent respectively.

Other top price gainers included: Lafarge Africa Plc (13.5 per cent); Prestige Assurance Plc (10.4 per cent) and Linkage Assurance Plc (8.4 per cent).

Conversely, Standard Alliance Insurance Plc led the laggards with 20 per cent, trailed by AXA Mansard Insurance Plc with 19.1 per cent. Red Star Express Plc shed 17.4 per cent, while Cornerstone Insurance Plc, John Holt Plc and Universal Insurance Plc added 16.6 per cent and  8.6 per cent in that order.

Other top price losers were: Capital Oil Plc (8.0 per cent); Consolidated Hallmark Insurance Plc (6.2 per cent); Niger Insurance Plc (6.0); and Diamond Bank Plc (5.4 per cent).