NSE DG, Oscar Onyema

Goddy Egene and Eromosele Abiodun

Last week was another fruitful one for investors in the Nigerian equities market as the market continued its bullish run, following consistent bargain hunting by investors seeking gains, and rising appetite for blue chip stocks.

Apart from some individual stocks that garnered as much as 25 per cent, the Nigerian Stock Exchange (NSE) benchmark All-Share Index jumped by 3. 2 per cent to close at 27,287.85. 

The previous week, the ASI had appreciated by 1.66 per cent as the addition of nine new stocks to the pool of stocks in the market making basket on the Nigerian Stock Exchange (NSE), helped to sustain the positive momentum in the market.
Analysts had noted that the nine new selected are more flexible as they have a daily band limit of 10 per cent as against the observable 5 per cent for other listed stocks.

The inclusion of the nine stocks namely: Dangote Sugar Refinery Plc, Access Bank Plc, First Bank of Nigeria Plc, AIICO Insurance Plc, Academy Press Plc, Nestle Nigeria Plc, National Salt Company of Nigeria Plc, Union Bank Nigeria Plc, and Custody & Allied Insurance Plc increased the basket of stocks to a total of 25.

At the resumption of trading last week, stocks prices remained northward as investors basked in the euphoria of the recent upsurge.

It extended that run to the close of business last Thursday. However, the equities market took a negative turn at the end of Friday’s trading session, obviously due to profit taking.
Despite Friday’s depreciation, most market indicators closed last week firmer led by the twin market gauge of ASI and market capitalisation of equities.

Analysis of trading statistics released by the NSE showed that the Exchange's benchmark index appreciated by 3.2 per cent, raising  the Year-to-Date (YTD) return to 31.6 per cent.
Also, the market capitalisation of the listed equities increased by N275.586 billion to close at N8.695 trillion.

All but one of the NSE sectoral indices appreciated during the week. The NSE-30 Index, the NSE Consumer Goods Index, the NSE Banking Index, the NSE Insurance Index, and NSE-Lotus II advanced by 3.89 per cent, 1.94 per cent, 7.70 per cent , 1.59 per cent and 2.03 per cent respectively, while the NSE Oil and Gas Index depreciated by 0.34 per cent.
Meanwhile, investors sold a total of 2.184 billion shares worth N17.495 billion in 27,786 deals, in contrast to a total of 4.759 billion shares valued at N40.472 billion that exchanged hands the previous week in 20,364 deals.

The Financial Services sector of the equities market (measured by turnover volume) accounted for 1.736 billion shares valued at N12.268 billion traded in 16,453 deals.
The Consumer Goods Sector followed with 166.772 million shares valued at N3.570 billion traded in 5,443 deals.

The volume in the Financial Services sector was largely driven by activity in the shares of Access Bank Plc, Zenith Bank Plc and Fidelity Bank Plc which accounted for 569.875 million shares, representing 40.02 per cent, 32.82 per cent and 26.09 per cent of the turnover recorded by the subsector, sector and total turnover for the week, respectively.
Also traded during the week were 2,200 units of NewGold Exchange Traded Funds (ETFs) valued at N5.959 million exchanged hands in 8 deals in contrast to a total of 2,900 units valued at N7.863 million transacted last week in 7 deals.

Gainers and Losers

A total of 50 stocks appreciated, 25 stocks depreciated, and 123 stocks remained unchanged.
When compared with the preceding week, 48 equities gained, 28 equities declined while 123 equities remained constant.

The top price gainers included: Nestle Nigeria Plc (N10.00), Guinness Nigeria Plc (N4.40), Ashaka Cement Plc (N2.75), Cadbury Nigeria Plc (N2.44), Nigerian Breweries Plc (N2.15), Julius Berger Nigeria Plc (N2.00), First Bank of Nigeria Plc (N1.48), Cement Company of Northern Nigeria Plc (N1.35), Zenith Bank Plc (N1.25) and Lafarge WAPCO Plc (N1.24).

On the other hand, top price losers were: CAP Plc (N1.45), Northern Nigerian Flour Mills Plc (N1.07), International Breweries Plc (N0.81), PZ Cussons Nigeria Plc (N0.75), Roads Nigeria Plc (N0.53), Arbico Plc (N0.44), Union Bank Nigeria Plc (N0.40), Presco Plc (N0.30), Oando Plc (N0.24), and Mansard Insurance Plc (N0.19).

Diamond Bank’s N8bn Profit

However, the positive performance witnessed in the market was partly influenced by the positive signals sent by Diamond Bank Plc in its third quarter (Q3) result, which showed great improvement and bright prospect for the future.

Diamond Bank Plc became the first bank to release its financial figures for the third quarter (Q3) ended September 30, 2012, showing a profit after tax of N18.17 billion.

The bank had posted a loss of N6.1 billion in the corresponding period of 2011. But shareholders of the bank should be salivating as it has bounced back into profitability.

The unaudited result released on the floor of the Nigerian Stock Exchange (NSE) showed gross earnings of N110.108 billion in 2012, up from N74.646 billion in 2011.

Profit before tax is N23.216 billion, compared with a loss of N6.924 billion in 2011, while profit after tax is N18.17 billion, as against a loss of N6.1 billion in 2011.
Market operators said investors are optimistic that more banks would declare similarly improved results this week.

Retail Investors

Meanwhile, the apex regulator of the capital market, Securities and Exchange Commission (SEC) has restated its commitment to ensuring that more retail investors patronise  the market.

Speaking at the 16th Annual Stockbrokers’ Conference in Lagos last week, Director-General of SEC, Ms. Arunma Oteh, said the commission would in 2013 roll out stronger regulatory framework that would guide collective investment schemes (CIS), thus encouraging retail investors to embrace the investment window.

According to her, SEC would continue to educate retail investors on the need to embrace CIS in order to avoid loss of investment, just as she disclosed that the capital market generally would be repositioned to tap from the Federal Government transformation agenda of the agric sector.

She, therefore, urged participants in the market to be prepared to tap from the development in the market.

In his welcome address, President, Chartered Institute of Stockbrokers (CIS), Mr. Ariyo Olushekun, said the Institute is a key stakeholder in the Nigerian economy.
According to him, the activities of stockbrokers members and the fortune of their clients depend significantly on the economic health of the country.

“We have, therefore, always sought to help craft policy solutions for some of the most pressing economic challenges in the country. We are happy to note that our policy prescriptions at past conferences, contributed to the enactment of the Pension Reform Act of 2004 and the establishment of the Asset Management Corporation (AMCON) Act of 2010, amongst others,” he said.

The CIS boss expressed delight at the recent recovery of the market, saying it has opened an avenue for wealth creation for Nigerians.
“We must embrace this development and contribute to the virility of the market and the overall economy,” he said.