NSE DG, Oscar Onyema
By Goddy Egene and Eromosele Abiodun
In what points to growing confidence in the Nigerian equities market, the value of investment in equities rose by 99 percent last week as investors staked N16.998 billion on 2.160 billion shares in 31,241 deals last week. In volume terms, the performance showed a jump 122 per cent above the N8.509 billion invested in 972.737 million shares in 13,745 deals.
However, it was a mixed trading week for equities on the floor of the Nigerian Stock Exchange (NSE) as the market recorded three days of gains in the week to appreciate by 2.33 per cent.
The market survived two days of losses driven by short-term profit taking on small and mid-cap stocks of the banking and agricultural sectors. Investors in the equities market had smiled home the previous week as the market sustained its strong momentum helped by massive demand for shares. Trading resumed on a positive note on Monday, sustaining the trend of the previous week as investors’ sentiments towards the market remained on the upbeat. It continued on that note the next day as the rally momentum was maintained although at a slow rate as the benchmark Index appreciated marginally by 0.36 per cent.
However, the stock market retreated on Wednesday, snapping the extended gains witnessed on the market, which started in the tail end of last year. On Thursday, profit taking activities by speculative investors impacted the market negatively as the market further closed negative declining by 0.90 per cent at 28,695.59 points, compared with the depreciation of 0.46 per cent recorded the previous day. But the market regained its momentum at the close of business last Friday returning to a northward direction.
As a result, the NSE All-Share Index appreciated by 2.33 per cent to close at 29,202.01. Also, the market capitalisation of the listed equities went up by2.39 per cent to close at N9.340trillion. All the sectoral indices appreciated: the NSE 30, the NSE Consumer Goods, the NSE Banking, the NSE Insurance, the NSE Oil/Gas index and NSE Lotus II appreciated by 2.40 per cent;1.95 per cent; 4.09 per cent; 2.73 per cent; 6.13 per cent and 1.92 per cent respectively.
Meanwhile, the Financial Services sector was the most active during the week (measured by turnover volume) with 1.686 billion shares worth N12.055billion exchanged hands by investors in 19,947 deals. The volume of shares sold in the sector was largely driven by activity in the shares of U B A Plc, Fidelity Bank Plc, Unity Bank Plc, and Zenith Bank Plc. Trading in the shares of the four Banks accounted for 807.493 million shares, representing 48.00 per cent and 37.39 per cent of the sector and total turnover traded during the week respectively.
The Conglomerates sector, boosted by activity in the shares of Transnational Corporation of Nigeria Plc followed on the week’s activity chart with a turnover of 195.656 million shares valued at N302.207million in 960 deals. The Consumer Goods sector (measured by turnover volume) was third with 93.297million shares valued at N3.121 billion traded in 4,892 deals. The top three sectors accounted for 1.975 billion shares valued at N15.478billion traded in25,799 deals, thus accounting for 91.00 per cent, 91.06 per cent and 83.00 percent, of the volume, value and number of deals respectively. Also traded during the week was 413 units of NewGold Exchange Traded Funds (ETFs) valued at N1.042million exchanged hands in 5 deals in contrast to a total of 438 units valued at N1.108million transacted last week in 4 deals. There were no transactions through the stock market in the FGN Bonds, State/Local Government Bonds and Corporate Bonds/Debentures sectors.
Reacting to developments in the stock market last week, analysts at BGL Securities Limited, noted that investors seem to have started with profit taking activities cashing out from gaining stocks. “Investors seem to be in high speed with profit taking on winning stocks causing the extended losses in the market, although it eased on Friday recording a significant gain. Speculative investors sell down to raise cash in order to cushion the usual cash droughts that occur in January. However, we expect this sell pressure to reduce by this week as economic activities are fast returning to status quo while some companies that pay salaries in two folds are likely to roll out the first tranche next week thereby improving the liquidity situations. Although, investors will likely re-enter the market in the nearest term for bargain hunting in view of the corporate earnings release of March. However, it is expected that the market will remain relatively stable as sizeable long term investors are still consistent with early bets on selected stocks,” they stated.
Gainers and Losers
A review of the equity price movements for the week under review indicated that 52 equities gained while 20 equities recorded price declines and prices of 123 equities remained constant. When compared with the preceding week, 51 equities gained while 12 equities recorded price declines and prices of 132 equities remained constant. The top10 gainers included: Guinness Nigeria Plc (N17.00); Nestle Nigeria Plc(N14.90), Total Nigeria Plc (N11.23), Okomu Oil Palm Plc (N4.38); Lafarge WAPCO Plc (N3.35); Seven-Up Bottling Company Plc (N3.00); Forte Oil Plc (N1.72);Ashaka Cement Plc (N1.59);United Bank for Africa Plc (N1.36); and Nigerian Breweries Plc (N1.35). On the other hand, the top 10 losers included: MRS Oil Nigeria Plc (N1.18), Unilever Nigeria Plc (N0.75), Presco Plc (N0.72); Morison Industries Plc (N0.31), DN Meyer Plc (N0.29), Pharma-Deko Plc (N0.23),E-Tranzact International Plc (N0.19 ), John Holt Plc (N0.15), NPF Microfinance Bank Plc (N0.14), and University Press Plc (N0.13).
Indications came last week that the Asset Management Corporation of Nigeria (AMCON) had given the 84stockbroking houses granted debt forbearance last December up till the end of January to accept or reject the offer. The Federal Government had granted a forbearance of N22.6 billion on the margin loans of 84 stockbrokers as part of effort to resuscitate the nation’s capital market. While the forbearance package, which was announced by the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, was hailed as a good development, there were indications that some brokers were not willing to accept the offer due to conditions attached.
THISDAY had last month exclusively reported that AMCON would write the broking houses that would benefit from the package to know those who are willing to accept it and those not favourably disposed to it due to the conditions. The Managing Director of AMCON,Mr. Mustafa Chike-Obi, confirmed toTHISDAY that the stockbroking houses have been given up till the end of this month to respond.
According to him, it is only after the end of January that “We will knowhow many broking firms that have accepted the package and the next step to take.”
The Chairman of Association of Stockbroking Houses of Nigeria (ASHON),Mr. Emeka Madubuike, also confirmed the development to THISDAY. “We agreed with AMCON to write the beneficiaries and give them time to response. Yes, that is what we agreed on with AMCON," he said.