Trading session at NSE
By Goddy Egene and Eromosele Abiodun
The bulls continued remained dominant in the stock market as the market closed the week on a bullish note, with investors in Julius Berger Nigeria Plc and Forte Oil Plc reaping gains of 28 per cent and 27 per cent respectively.
The Nigerian bourse emerged from its sluggish start on Monday to close the week firmer as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) chalked up 2.62 per cent to 32,441.86. It also started the month of February with a 1.75 per cent gain.
Renewed investor confidence buoyed by expectations of strong full year results from quoted companies had helped the market sustain its positive momentum the previous week with a gain of 2.12 per cent.
However, last week’s performance was better, as the ASI did not only inch higher but the volume of shares traded also spiked.
Trading had resumed last Monday on a negative note as the benchmark index depreciated by 0.34 per cent following cautious trading and profit taking by some investors. Retail investors had anticipated fear of a sudden downward spiral in equities prices following several days of consistent gains.
However, after a negative start last Monday, the market rebounded on Tuesday as equities prices rose, following investors’ renewed interest that lifted market activities.
On Wednesday, interest in stocks in the fast moving consumer goods’ sector sustained the market momentum with the exchange's benchmark index appreciating by 0.77 per cent.
At the close of business last Thursday, activities on the local bourse remained upbeat despite waning interest. Market performance was buoyed by bullish activity on Nigerian Breweries Plc as the stock made a 72 basis point contribution to the ASI.
Consequently, the Nigerian bourse ended January with a growth of 13.4 per cent. Also, by the close of trading on Friday, the market recorded a positive start to February rising by 1.75 per cent.
The positive momentum was sustained following advances posted in the share prices of Dangote Cement Plc, FBN Holdings Plc, Access Bank Plc, Stanbic IBTC Holdings Plc and Lafarge Cement WAPCO Nigeria Plc.
As a result, the ASI inched up 828.37 points or 2.62 per cent to close on Friday at 32,411.86, bringing the year-to-date (YTD) rise of the index to 15.43 per cent. Also, market capitalisation of the exchange appreciated by 2.65 per cent to close at N10.370 trillion.
Similarly, all NSE sectorial indices appreciated: the NSE 30, the NSE Consumer Goods, the NSE Banking, the NSE Insurance, the NSE Oil/Gas and NSE Lotus II appreciated by 3.25 per cent, 5.94 per cent, 1.81 per cent, 6.38 per cent, 1.40 per cent and 3.33 per cent respectively.
A review of trading figures released by the NSE showed that investors sold a total of 2.813 billion ordinary shares worth N22.188 billion made in 33,123 deals last week in contrast to a total of 2.612 billion shares valued at N19.152 billion that exchanged hands the previous week in 27,186 deals. The performance indicated a rise of 16 per cent in value compared with the previous week’s performance.
The Financial Services sector was the most active during the week, contributing 79.64 per cent to the total equity turnover volume with 2.240 billion shares valued at N14.761 billion exchanged hands by investors in 19,656 deals.
The Banking subsector of the Financial Services sector was the most active during the week (measured by turnover volume); with 1.583 billion shares worth N12.581 billion traded in 13,629 deals. The volume of shares sold in the banking subsector was largely driven by activities in the shares of Ecobank Transnational Incorporated Plc, Unity Bank Plc and UBA Plc. Trading in the shares of the three banks accounted for 844.849 million shares, representing 53.37 per cent, 37.71 per cent and 30.03 per cent of the turnover recorded by the subsector, sector and total turnover for the week, respectively.
Also traded during the week were 234 units of NewGold Exchange Traded Funds (ETFs) valued at N595, 491 exchanged hands in 5 deals in contrast to a total of 196 units valued at N504,481 transacted last week in 4 deals.
In addition, 610 units of FGN bonds valued at N76,432 were traded during the week in 14 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 55 equities gained while 27 equities recorded price declines and 115 equities remained constant. When compared with the preceding week, 49 equities gained while 31 equities recorded price declines and 117 equities remained constant. Nestle Nigeria Plc led the price gainers with N66.99 followed by Julius Berger Nigeria Plc with 14.48.
Others in the top 10 advancers included: Nigerian Breweries Plc (N11.40), Flour Mills Nigeria Plc (N7.42), Guinness Nigeria Plc (N4.13), PZ Cussons Nigeria Plc (N4.13), Forte Oil Plc (N3.75), Lafarge WAPCO Plc (N2.99), Stanbic IBTC Holdings Plc (N1.30) and MRS Oil Nigeria Plc (N1.18).
On the flip side, UAC of Nigeria Plc led the laggards with N4.90, trailed by CAP Plc with a decline of N2.95.
Other top price losers were: International Breweries Plc (N1.18), Oando Plc (N1.00), Berger Paints Plc (N0.83); Nigerian Aviation Handling Company Plc (N0.63); John Holt Plc (N0.44), Unilever Nigeria Plc (N0.41 ) and Airline Services and Logistics Plc (N0.35).
Analysts were of the view that the recent rally in the market indicates that investors’ confidence has really improved.
“We recognise the various NSE reforms and other broad macroeconomic indicators as the likely drivers of the market’s favourable movement. While the positive outlook continues to stimulate investors’ active participation in the market, speculative investors are however cautious of a break in the rally.
“Nonetheless, we are of the strong opinion that the market will remain stable to witness gradual growth barring any major unforeseen events.
“It is not impossible that investors and portfolio managers who have somewhat met their investment targets may likely engage securities traders for a bit of sell down to realise profits. We however expect the effects of such activities to be mild on the market, hence, sustaining its stable form,” analysts at BGL Limited said.
Meanwhile, the management of the NSE last week added three more equities to the market-making basket, bringing the number of market making stocks to 43. The three additional stocks are: Flour Mill Plc, Unilever Nigeria Plc, Royal Exchange Plc and Wema Bank Plc.
The exchange explained that the inclusion of the stocks from consumer goods and financial Services sectors would become effective today, adding that it was in line with the planned phased introducing of stocks to the programme, from the baskets allocated to the 10 Market Makers on the Nigerian bourse.