SEC DG, Arunma Oteh
By Goddy Egene and Eromosele Abiodun
Investors’ hope that the Nigerian equities market will rebound last week were dashed as the market sustained its bear run following three days of losses driven by massive supply of shares by some investors raising cash for the Muslim holiday of Eid-e l-Fitri.
The market had returned southward the previous week as anxious investors rush to take profit following massive gains recorded the preceding weeks.
Traders are however optimistic that the market will reverse to positive direction in the coming days as investors react to corporate actions by quoted companies whose second quarter results may be stronger than expected.
“It is not new that retail investors make effort to raise cash for holidays, the news of the Muslim holiday of Eid-El-Fitri has been on for sometimes and investors who need cash to celebrate have been selling shares. I know the market will return to positive territory as soon as the holidays are over, ”noted a trader with Emerging Capital Limited.
Trading resumed last Monday on a positive note but relapsed the next day and extended the bear run to the close of business last Thursday, resulting to the decline of market value by N65 billion.
However, at the close of trading last Friday, gains recorded by Dangote Cement Plc, Guaranty Trust Bank Plc, Zenith Bank Plc, First Bank of Nigeria Plc and Nigerian Breweries Plc lifted the market to positive territory.
Analysis of trading results released by the Nigerian Stock Exchange (NSE), showed that the exchange’s benchmark All-Share Index or (ASI), which opened the week at 23,239.03 points depreciated by 0.42 per cent to close on Friday at 23,141.08. Week-on-week, the NSE ASI dropped by 0.46 per cent, while its year-to-Date return stands at 11.27 per cent.
Similarly, the equities market capitalisation, which opened the week at N7.40 trillion depreciated by 0.41 per cent to close last Friday at N7.37 trillion.
Also, the NSE-30 Index, which mirrors the 30 most capitalised stocks, remained flat at 0 per cent to close at 1,084.61 points. Conversely, two of the five sectorial indices appreciated. While the NSE Consumer Goods Index rose by 1.01 per cent to close at 1,965.10 points, the NSE Banking Index appreciated by 1.50 per cent to close at 360.13 points. However, the NSE Insurance Index depreciated by 0.20 per cent to close at 124.44, the NSE Oil/Gas Index depreciated by 1.81 per cent to close at 165.70, while NSE-Lotus II depreciated by 0.76 per cent to close at 1,343.27 points.
A further review of the NSE numbers revealed that investors sold a total of 932.58 million ordinary shares worth N7.277 billion made in 17,711 deals, in contrast to a total of 1.318 billion ordinary shares valued at N9.136 billion exchanged the previous week in 19,200 deals.
Also traded were 5,877 units of NewGold Exchange Traded Funds (ETFs) valued at N14.36 million exchanged in 12 deals in contrast to a total of 1,707 units valued at N4.293 million exchanged the previous week in 9 deals.
The financial services sector was the most active during the week (measured by turnover volume), with 703.84 million shares worth of N4.92 billion exchanged hands by investors in 10,282 deals.
The volume of shares sold in the sector was largely driven by banking subsectors led by shares of First Bank of Nigeria Plc, Diamond Bank Plc and Zenith Bank Plc.
Trading in the shares of the three banks accounted for 252.67 million shares, representing 41.13 per cent, 35.9 per cent and 27.09 per cent of the turnover recorded by the subsector, sector and total turnover for the week, respectively.
However, there were no transactions in the federal government development stocks, state/local government bonds, and corporate bonds/debentures sectors.
Gainers and Losers
The price movement chart of the displayed a total of 33 equities that appreciated in prices during the week, higher than 31 of the preceding week.
Nigerian Breweries Plc led on the gainers’ table by 1.94 per cent to gain N2.31 followed by Cadbury Nigeria Plc by 11.16 per cent to gain N1.68. Other price gainers’ in the Top 10 category include: GlaxoSmithKline Consumer Plc (N1.45), Chemical and Allied Products Plc (N1.20), International Breweries Plc (93 kobo), First Bank of Nigeria Plc (42 kobo), Zenith Bank Plc (39 kobo), PZ Cussons Nigeria Plc (37 kobo), U A C N Plc (34 kobo), Lafarge WAPCO Plc (25 kobo).
On the other hand, 28 stocks depreciated in prices during the week, lower than 36 of the preceding week. Dangote Cement Plc led on the price losers’ table, dropping by 4.33 per cent to shed N4.98 followed by Mobil Oil Nig. Plc with a loss of N4.98 or 4.28 per cent. Other price losers in the Top 10 category include: Arbico Nigeria Plc (N1.52), Conoil Plc (N1.15), Unilever Nigeria Plc (50 kobo), Nigerian Bags Manufacturing Company Plc (21 kobo), Eterna Plc (50 kobo), UACN Property Development Company Plc (15 kobo), Skye Bank Plc (13 kobo), Ecobank Transnational Incorporated (12 kobo).
New Board for SEC
Meanwhile, the relative calm in the capital market after the reinstatement of the Director-General of the Securities and Exchange Commission (SEC), Ms. Arunmah Oteh, was threatened last week when operators called on the Federal Government to appoint a new board for the SEC.
Exactly two months after the federal government dissolved the board of SEC, a new board is yet to be reconstituted, a development the operators said will further delay the recovery of the nation’s stock market.
The Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, had on June 15, announced the dissolution of SEC’s board following the expiration of its tenure of four years.
But due to the suspension of Oteh, by the board then, Okonjo-Iweala announced the appointment of Mr. Ibrahim Bolaji Bello as acting director-general of the commission.
The minister had promised to constitute a new board, adding the government was looking forward to the report of the audit that the board ordered to look into the Project 50, which led to the suspension of the Oteh.
While government has received the report and reinstated Oteh for almost a month, the market is still awaiting the constitution of a new board.
Senior stockbrokers and market operators, who spoke to THISDAY last Monday, said the government should not delay further in reconstituting the board of the commission.
According to them, considering the intrigues that led to the suspension of Oteh and her reinstatement, the commission should have a board that will assist in stabilising the market.
“The DG has assumed office for almost a month now and she has been working without commissioners and a full board. Given the controversies surrounding her suspension and recall and the observation of the government pertaining to the report of PriceWaterHouseCoopers (PWC), there is the need for a board to be reconstituted without delay,” a broker said.
Another operator explained as the apex regulator of the capital market, leaving only the DG to work without a board would not help in the efforts to regain investors’ confidence.
“We need a board that is constituted not based on political appointees. But a board that has people who are knowledgeable about the market. The government should bring people who understand the market and when such people work in harmony with the management of the commission, the impact of their decision would be felt and seen in the market,” he said.
The SEC board comprises nine members made up of the chairman, DG, three executive commissioners, two non- executive commissioners, and a representative each from the Ministry of Finance and the Central Bank of Nigeria (CBN).