Aliko Dangote, President, Dangote Group
The Nigerian stock market shrugged off a wobbling start last Monday to end the week with a growth of 1.9 per cent as Dangote Cement Plc rallied last Friday to assist in checking the activities of rampaging bears.
The market, which suffered a decline of 0.17 per cent the previous week following investors’ negative reaction to the poor results released by Guinness Nigeria Plc, had opened last week on a bearish note on Monday.
However, the market rebounded on Tuesday when the shares of Nestle Nigeria soared to new level on the expectation of impressive corporate results for the 2012 financial year.
Analysts at Renaissance Capital, who had met with the management of the company the previous week, had rated the shares of Nestle above others in the fast-moving consumer goods category.
According to them, Nestle appeared to be executing better than its competitors in market.
He stressed that Nestlé had most pricing power while its price increased also remained well under inflation.
“Continuing penetration of smaller towns and strong Milo growth has enabled Nestlé to continue reporting revenue growth of 20 per cent in 2012, we believe a key differentiator for Nestle is that it provides 20-day credit to its distributors. Nestle dispatches to the warehouses of its distributors, but has a system of keeping track of stock levels, and replenishes when the stock falls below a certain level,” the RenCap analysts said.
This information prepared the minds of investors for the results of Nestle, which hit the market on Wednesday leading to further growth of 1.12 per cent in the benchmark Nigerian Stock Exchange (NSE) All-Share Index (ASI).
As expected Nestle’s results showed 28 per cent rise in profit after tax at N21.13 billion. Shareholders are to receive a dividend of N18.50 per share, showing an improvement of 47 per cent above the N12.55 paid in the previous year.
Just as expectation were high that the shares of Nestle Nigeria would ride on the wave of the results and hit the N1,000 mark, they took a dive on Thursday, leading to a second decline of the ASI for the week.
The ASI declined by 0.60 per cent on Thursday to close at 33,506.60 as some holders of Nestle Nigeria shares divested to take profit. Market operators had said although the firm reported an impressive corporate 2012 performance, some investors who had bought the shares a year ago, have seen the capital gain on the shares and decided to sell and exit instead of waiting for the dividends that would be paid on May 10.
While Nestle maintained a steady fall for the second day on Friday, an unprecedented rally by Dangote Cement saw the bulls charge back to regain control of the market.
Consequently, the ASI closed the week with a gain of 1.91 per cent at 33,895.08. Also, the market capitalisation appreciated by 1.91 per cent to close at N10.846 trillion.
All the sectoral indexes except one appreciated last week.
The NSE 30, NSE Consumer Goods and NSE Banking, NSE Oil/Gas and NSE Lotus II appreciated by 1.41 per cent;0.78 per cent; 0.12 per cent; 2.16 per cent; and 3.48 per cent respectively while the NSE Insurance depreciated by 6.54 per cent .
Meanwhile, investors traded 2.482 billion shares worth N22.815 billion in 32,471 deals last week compared with 4.249 billion shares valued at N23.177 billion that exchanged hands the previous week in 39,391 deals.
A daily analysis of the activity for last week showed that Monday accounted for the highest volume of shares traded with 535.325 million shares valued at N4.155 billion exchanged in 6,742 deals.
Tuesday followed with a turnover of 528.212 million shares worth N3.654 billion in 6,827 deals. Investors traded 517.049 million shares valued at N5.272 billion in 6,177 deals on Thursday while Friday accounted for 467.360 million shares worth N5.381 billion in 5,447 deals. Investors traded 434.156 million shares worth N4.530 billion in 7,278 deals on Wednesday.
A further analysis of the market performance showed that the financial services sector was the most active during the week, contributing 69.14 per cent, 59.98 per cent, 58.39 per cent to the total equity turnover volume, value and number of trades respectively in 1.716 billion shares valued at N13.684 billion exchanged hands by investors in 18,961 deals.
The consumer goods sector followed with a turnover volume of 199.667 million shares worth N6.120 billion in 5,677 deals. While the conglomerates sector came third with a turnover volume of 186.997 million shares worth N479.219 billion in 1,441 deals.
Trading in the top three equities namely Unity Bank Plc, Transnational Corporation of Nigeria Plc, Guaranty Trust Bank Plc (measured by turnover volume) accounted for 552.779 million shares worth N4.070 billion in 4,417 deals.
Also traded during the week were 193 units of NewGold Exchange Traded Funds (ETFs) valued at N471,970 exchanged hands in 4 deals in contrast to a total of 339 units valued at N854,813 transacted last week in 6 deals.
In addition, 16,050 units of FGN bonds valued at N19.339 million were traded during the week in 66 deals in contrast to 6,460 units valued at N7.970 million transacted last week in 21 deals. However, there were no transactions in the State/Local Government Bonds and Corporate Bonds/Debentures sectors.
Gainers and Losers
A review of the equity price movements indicated that 38 equities gained while 55 equities recorded price declines and 104 equities remained constant. The preceding week, 51 equities had gained, 42 equities recorded price decline, while 104 equities remained stagnated.
Nestle Nigeria Plc led the price gainers with N54.77, trailed by Dangote Cement Plc with N15.00. Other price gainers among the top 10 included: Total Nigeria Plc (N14.52); Mobil Oil Nigeria Plc (N4.03); Nigerian Breweries Plc (N1.23); BOC Gases Plc (N1.02); Flour Mills of Nigeria Plc (N1.01); NCR Nigeria Plc (N0.83); Union Bank of Nigeria Plc N0.61; and DN Meyer Plc (N0.57).
On contrary, Guinness Nigeria Plc led the laggards with N13.70, trailed by Julius Berger Nigeria Plc with N12.00. Other top price losers included: Okomu Oil Pam Plc (N9.27);SmithKline Consumer Nigeria Plc (N7.13); Presco Plc (N5.08);Lafarge Cement WAPCO Nigeria Plc (N2.90); Stanbic IBTC Holdings Plc N1.79); International Breweries Plc (N1.75); Berger Paints Plc (N1.68) and Ashaka Cement Plc N1.62.