NSE Index Sheds 2.1% on Profit Taking 

WEEKLY REPORT 

The Nigerian equities market succumbed to the bears last week following profit taking after three weeks of positive performance. The Nigerian Stock Exchange (NSE) All-Share Index (ASI), which rose  3.46 per cent the previous week, fell by  2.09 per cent to 38,436.08. But the market capitalisation appreciated by 0.04 per cent to close at N13.678 trillion.

 All other indices finished lower during the week with the exception of the NSE Consumer Goods, NSE Oil/Gas and NSE Lotus II Indices that appreciated by 0.68 per cent, 4.54 per cent , and 0.71 per cent  respectively while the NSE ASeM closed flat.

Analysts at Cordros Capital Limited said: “Notwithstanding this week’s profit taking, which we appraise as healthy, considering previous rally, we reiterate our position that the market remains fundamentally strong – supported by strengthening macroeconomic conditions, in addition to expected year-end portfolio rebalancing.”

Daily Market Performance

Trading at the stock market opened the week on a negative note on Monday following profit taking. The NSE ASI declined 0.88 per cent to close at 38,913.99,

The fall was caused by depreciation recorded in the share prices  of International Breweries Plc, Access Bank Plc, Dangote Cement Plc, UBA Plc and Zenith Bank Plc among others.

According to analysts at FSDH Research, performance across sectors was mostly bearish, attributable to profit taking activities.

“There was a decline in market activity as investors’ sentiments waned further. Profit taking is likely to be sustained till midweek. However, as year-end approaches, we expect market activity and investors’ sentiments to be positive driven by portfolio rebalancing by fund managers,” they said.

Similar to the broader index, sector performance was largely underwhelming as  three  of  five  indices closed southwards. The NSE  Banking index led laggards, down 2.0 per cent  on the back of losses in Zenith Bank(-3.3 per cent), UBA (- 5.0 per cent) and GTBank (-0.8 per cent).

The  NSE Industrial Goods Index trailed, depreciating 1.4 per cent, primarily on the back of profit taking in Dangote Cement (-1.7 per cent) and  Lafarge  (-1.2 per cent). Similarly, selling pressures on NEM (-3.9 per cent) and Linkage Assurance  (-4.4 per cent) dragged the NSE  Insurance Index 1.1 per cent lower.

On the positive side,  the  NSE Oil & Gas  Index  appreciated by 1.1 per cent while the NSE  Consumer Goods Index chalked up 0.7 per cent.

On Tuesday high trading in the shares of Dangote Cement Plc  lifted the overall value of transactions at the equities market by 445.4 per cent to N26.809 billion invested in  462.670 million shares, from N4.915 billion staked on 350.595 million shares the previous day. Dangote Cement accounted for 86 per cent of the transaction value as it recorded N25 billion invested in 95.478 million shares.

In all, the market rebounded rising by a marginal 0.03 per cent after declining the first trading day on profit taking. The index  closed higher at 38,924.63, while market capitalisation ended at N13.56 trillion.The appreciation recorded in the share prices of Nigerian Breweries, GTBank, Dangote Cement, FBN Holdings Plc  and Nestle  Nigeria was mainly responsible for the gain recorded in the index.

However, Union Bank of Nigeria Plc led the 21 price gainers with 10 per cent, trailed by Diamond Bank Plc with 7.1 per cent. Berger Paints Nigeria Plc chalked up 4.9 per cent, just as Caverton and NASCON Allied Industries Plc garnered 4.5 per cent and 4.0 per cent in that order.

Unlike the previous day when Nigerian Breweries Plc fell despite the news of appointment of a new group managing director/ceo, the stock appreciated yesterday to close higher at N143.32. The brewing giant  has appointed  Mr.  Jordi Borrut Bel. as the  new MD/CEO  effective  on January 22, 2018.  He   will succeed Mr. Johan Doyer, who has served as MD/CEO on an interim basis since June 16, 2017.

Conversely, FCMB Group Plc led the 23 price losers, shedding  4.69 per cent. Fidelity Bank Plc and NAHCO   trailed with 4.64 per cent apiece, while  Linkage Assurance Plc and Sterling Bank Plc fell 4.62 per cent and 4.5 per cent  respectively.

Meanwhile, performance across sectors was largely bearish as four of five  indices closed in the red. The NSE  Oil & Gas Index was the biggest loser shedding 0.4 per cent due to losses in Double One (-3.7 per cent). Following closely were the NSE Industrial Goods Index  and NSE  Insurance  Index  which fell 0.3 per cent apiece against the backdrop of price depreciations in Lafarge Africa (-0.9 per cent) and AXA Mansard  (-0.5 per cent) respectively.

Similarly, sell offs in ETI (-4.0 per cent) and Access Bank (-1.4 per cent)  dragged the NSE  Banking Index 0.1 per cent lower.

On the positive side,   the NSE Consumer Goods Index was the lone gainer, adding 0.3 per cent due to gains in Dangote Sugar Refinery and Nigerian Breweries Plc.

 On Thursday, the market declined 1.00 per cent  on profit taking compared with a marginal growth of 0.03 per cent the index recorded  the previous day.

The depreciation recorded in the share prices of  Nigerian Breweries, GTBank, Zenith Bank, FBN Holdings Plc and Lafarge Africa was mainly responsible for the loss recorded in the index. The three most actively traded stocks were: Sterling Bank (43.61 million shares), Diamond Bank (36.96 million shares) and FBN Holdings (33.02 million shares).

The  market sustained its bearish trend on Thursday as highly capitalised stocks depressed  the market.  The index fell by 1.56 per cent to 37,933.70, compared with a decline of 1.00 per cent on Wednesday.

However, the market capitalisation  appreciated by 0.57 per cent  to close at N13.50 trillion. The difference in the rate of change between the index and market capitalisation was because of the listing of 5,301,612,656 ordinary shares of International Breweries Plc on  the NSE.  The additional shares listed arose from the scheme of merger involving International Breweries Plc, Intafact Beverages Limited and Pabod Breweries Limited.

 Market Turnover

Meanwhile,  total turnover of 1.852 billion shares worth N51.523 billion in 23,863 deals were traded last week by investors  in contrast to a total of 3.316 billion shares valued at N36.451 billion that exchanged hands  the previous  in 29,771 deals.

The Financial Services Industry remained the most active, recording  1.377 billion shares valued at N17.137 billion traded in 14,334 deals, thus contributing 74.4 per cent  and 33.3 per cent  to the total equity turnover volume and value respectively.

 The Consumer Goods Industry followed with 175.880 million shares worth N8.044 billion in 4,882 deals. The third place was occupied by Conglomerates

Industry with a turnover of 134.882 million shares worth N821.653 million in 1,108 deals.

Trading in the top three equities namely – Zenith  Bank Plc, FBN Holdings Plc and

Diamond Bank Plc accounted for 632.027 million shares worth N8.494 billion in 5,616 deals.

Price Gainers and Losers

The price movement chart displayed  46 price losers, higher the 20 equities of the previous week, while  16 equities appreciated in price during the week, compared with 47 of the previous week. Linkage Assurance Plc led the price losers with 14.7 per cent, trailed by Learn Africa Plc with 14 per cent, while Flour Mills of Nigeria Plc and Sterling Bank Plc went down by 11.9 per cent and 11.5 per cent respectively.

NAHCO Plc and Lafarge Africa Plc, Fidelity Bank Plc and Access Bank Plc closed lower by 10.8 per cent, 10.4 per cent, 10 per cent and 9.9 per cent  respectively. Livestock Feeds Plc and UBA Plc shed 9.1 per cent and 8.3 per cent in that order.

On the positive side, Berger Paints Nigeria Plc led the price gainers with 10.1 per cent, trailed by  Dangote Sugar Refinery Plc with 8.3 per cent. NASCON Allied Industries Plc and Seplat  Petroleum Development Company Plc chalked up 8.1 per cent and 7.7 per cent  respectively.

Other top price gainers included: Double One Plc (6.3 per cent); Union Bank of Nigeria Plc (5.0 per cent); Neimeth International Pharmaceuticals Plc (4.3 per cent); NPF Microfinance Bank Plc (3.8 per cent); Nestle Nigeria Plc and Julius Berger Nigeria Plc (3.7 per cent).