WEEKLY REPORT
By Goddy Egene and Nosa Alekhuogie
The stock market bounced back with the Nigerian Stock Exchange (NSE) All-Share Index rising by 0.28 per cent to close at 26,325.93 last week after a bleak performance recorded in the first week of the year. Although during the week was very volatile as only two sessions recorded positive performance out of the five days, gains recorded in the banking sector boosted the overall performance. Banking stocks remained the major driver. Hence the NSE ASI closed last week 0.28 per cent higher as against a decline of 0.88 per cent of the previous week.
However, analysts at Afrinvest Research said they expect the rally in banking stocks to moderate in subsequent trading sessions, as such overall return in the week ahead may be negative.
In terms of sectoral performance, the NSE Banking Index ended the week in the green territory. But the NSE-Main Board, NSE Insurance, NSE Consumer Goods, NSE Oil/Gas and NSE Lotus II indices depreciated by 0.39 per cent, 0.34 per cent, 1.82 per cent, 3.15 per cent and 1.87 per cent respectively.
Daily Market performance
The market resumed on the first day of the week on a very promising note as the NSE ASI appreciated by 1.25 per cent on gains by highly capitalised stocks led by Dangote Cement Plc.
Specifically, Dangote Cement Plc appreciated by 1.2 per cent, GTBank also gained 4.9 per cent. However, United Capital Plc led the price gainers with 9.6 per cent for the day to close at N3.31 per share, trailed by FCMB Group Plc with 9.4 per cent. Fidelity Bank Plc appreciated by 8.4 per cent, just as Sterling Bank Plc, African Prudential Registrars Plc, and Continental Reinsurance Plc garnered 7.1 per cent, 5.6 per cent and 5.0 per cent respectively.
Similarly, United Bank for Africa Plc, Zenith Bank Plc and Omoluabi Savings and Loans Plc added 4.9 per cent, 4.8 per cent and 4.7 per cent in that order.
In all, 20 stocks appreciated in value while 17 declined at the end of trading activities. Seven-Up Bottling Company Plc led the price losers with 5.0 per cent to close at N122.55. Ashaka Cement Plc went down by 4.9 per cent. The shares of Ashaka Cement have suffered a bear run recently. Already the company has opted for voluntary delisting from the NSE.
The shareholders of Ashaka Cement Plc last month approved the proposed voluntarily delisting at an Extraordinary General Meeting (EGM) in Abuja. Following the EGM, shareholders of the company will have a 90-day window as specified by NSE rules on voluntary delisting to decide on the exit plan on offer to shareholders.
Instead of consolidating on the gains of the first day of the week, the bears returned the stock market depressing the market by 0.88 per cent at 26,346.24.
The stocks that had lifted the market the previous day also assisted droved the market downwards. Market analysts at Cordros Capital Limited said they expected the sell off to persist on the second day of the wee. Cutix Plc led the price losers with 9.5 per cent to close at N1.71 per share. Caverton followed with 9.3 per cent, while Seven-Up Bottling Company Plc Fidson Healthcare Plc,May & Baker Nigeria Plc and GTBank Plc shed 9.1 per cent, 4.5 per cent, 4.2 per cent and 4.2 per cent respectively.
However, market analysts had said GTBank would soon rebound as the directors prepared to meet and recommend dividend for the 2016 financial year.
Directors of GTBank would meet on January 25 to consider the financial accounts and recommend a final dividend. Expectations are high that the bank will pay a higher dividend for 2016, following the improved profit after tax recorded for the nine months ended September 30, 2016.
The market, again, rebounded on Wednesday following gains by agriculture stocks, Okomu Oil Palm Plc and Presco Plc.
Both stocks had outperformed the market last year, returning 32.5 per cent and 21.5 per cent in that order. In fact, the agric sector led others on the Nigerian bourse last year.
Commenting on the development, analysts at Meristem Securities Limited had said the agriculture sector had outperformed others for the second year consecutively.
“The agric sector which contributes about 29 per cent to the country’s gross domestic product (GDP) was amongst the few to record positive output growth (+4.54 per cent) as at third quarter (Q3):2016. We attribute this to heightened government focus, coupled with the favourable policies which were implemented in the course of the year. Also, as evident from the earnings releases of the companies, the devaluation of the naira which is stifling activities of palm oil importers, resulted in a top-line boost for Okomu and Presco. We posit that investors’ appetite towards the sector will remain healthy in the coming year as the federal government continues its quest for revenue diversification,” they had said.
In its continued volatile nature, the market reversed Wednesday’s gain, as the NSE ASI depreciated by 0.21 per cent to close at 26,330.39. The depreciation recorded in the share prices of PZ Cussons, ETI, Forte Oil, Guinness and Nestle were mainly responsible for the loss recorded.
The total value of stocks traded was N1.49 billion, up by 12.02 per cent from N1.33 billion recorded the previous day. The total volume of stocks traded was 179.43 million shares in 2,928 deals.
Commenting on the performance of the market last week, analysts said: “Activities in the equities market took a seesaw pattern as they saw the NSE ASI contract and advance intermittently in the course of the week. We attribute this to the uncertainty regarding the economy and financial market in the year ahead. We expect a moderation of this skepticism and renewed appetite towards equities, as investor position ahead of full year 2016 corporate action.”
Market turnover
Meanwhile, investors traded 1.117 billion shares worth N9.041 billion in 16,482 deals last week as against 4.319 billion shares valued at N7.376 billion that exchanged hands the previous week in 9,330 deals.
As usual, the Financial Services sector led the activity chart with 903.696 million shares valued at N3.336 billion traded in 9,240 deals, thus contributing 80.88 per cent and 36.90 per cent to the total equity turnover volume and value respectively. The Conglomerates sector followed with 67.147 million shares worth N109.014 million in 609 deals. The third place was occupied by Consumer Goods sector with a turnover of 59.710 million shares worth N4.002 billion in 2,686 deals.
Trading in the top three equities namely – Fidelity Bank Plc, Omoluabi Savings and Loans Plc and Diamond Bank Plc accounted for 299.270 million shares worth N277.933 million in 1,029 deals, contributing 26.79 per cent and 3.07 per cent to the total equity turnover volume and value respectively.
Price gainers and losers
The price movement chart showed that 31 equities appreciated in price last week higher than 18 equities of the previous week. A total of 34 equities depreciated compared with 31 of the previous week. Diamond Bank Plc led the price gainers with 23.3 per cent trailed by Okomu Oil Palm Plc with 10.2 per cent, while Sterling Bank Plc and Continental Reinsurance Plc appreciated by 10.0 per cent respectively. United Capital Plc gnarred 9.6 per cent, while May & Baker Nigeria Plc and Fidelity Bank Plc chalked up 8.5 per cent and 8.4 per cent respectively. FCMB Group, UBA and Access Bank Plc closed the week 7.6 per cent, 6.6 per cent and 6.5 per cent in that order.
On the contrarily, Cutix Plc led the price losers with 17.9 per cent, trailed by Seven-Up Bottling Company Plc with 13.6 per cent. Caverton shed 12.7 per cent, just as Fidson Healthcare Plc, NASCON Allied Industries Plc declined by 12.7 per cent, 11.1 per cent and 10.5 per cent respectively.
N.E.M Insurance Plc, Julius Berger Nigeria Plc and UACN Property Development Company Plc , Guinness Nigeria Plc and Forte Oil Plc fell by 10.5 per cent, 9.7 per cent, 9.6 per cent and 8.7 per cent in that order.
