Stock Market Sustains Bull Run on FG’s Forex Management Plan

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WEEKLY REPORT

By Goddy Egene and Eromosele Abiodun

The Nigerian equities market surged further last week on the back of investors’ anticipation that further flexibility may be introduced into the current foreign exchange management regime by the federal government in the coming weeks. The government on Wednesday announced a new price band of N135-145 per litre for non-NNPC imports, with total cost-to-pump at around N138 per litre. The government introduced a new exchange rate for the petroleum imports, saying marketers are to source for forex at autonomous market at N285/$, compared to the official rate of N197-199/$.

Investors in oil stocks reacted positively to the new fuel pump price as they swooped on shares, leading to a jump of 5.1 per cent in the Nigerian Stock Exchange (NSE) Oil/Gas Index.

Combined with activities of barging hunters in the banking and oil/gas stocks, the market NSE All-Share Index appreciated by 2.88 per cent last week to close at 26,441.03, while market capitalisation rose 2.92 per cent to be at N9.099 trillion.

Similarly, all other Indices finished higher during the week, with the exception of the NSE Industrial Goods Index that declined by 1.15 per cent. The NSE Banking Index surged by 8.7 per cent, while the NSE Consumer Goods Index and NSE Insurance Index went up by 4.1 per cent and 1.33 per cent respectively.

The market had appreciated by 2.55 per cent, despite closing in the red in two of the four days trading the previous week.

The performance was boosted by the announcement that the MSCI would retain Nigeria in its benchmark frontier market index after giving indications that the country may be excluded.

 

Daily Performance Summary

The market had last week opened on a positive note, climbing 0.49 per cent to 25,828.30 points, although it rose as high as 25,898.82 points during intra-day trading. This outcome was driven by investor appetite for banking stocks such as Zenith Bank Plc and Guaranty Trust Bank Plc and consumer counters such as  Nigerian Breweries Plc and Unilever Nigeria Plc which offset Nestle Nigeria Plc. Major sectors in the NSE ASI closed mixed with the banking and consumer goods rising per cent 2.08 per cent and 0.6 per cent respectively, while the oil and gas and Industrial sectors fell 0.37 per cent and 0.06 per cent respectively. The market breadth index, a measure of investor sentiment, remained positive on the day on the back of 28 stocks that gained against 20 losers. Market activity improved on the day as total volume and total value jumped 74 per cent and 45 per cent respectively to 316 million units of shares worth N1.7 billion. Access Bank Plc (1.90 per cent) represented 51 per cent of total volume and 40 per cent of total value.

The profit taking activities depressed the equity market on Tuesday. Consequently, the NSE index depreciated by 0.70 per cent to close at 25,646.56. The depreciation recorded in the share prices of Dangote Cement Plc, FBN Holdings Plc, Lafarge Africa Plc, Forte Oil Plc and United Bank for Africa Plc were mainly responsible for the loss recorded in the Index. Similarly, the market capitalisation depreciated by 0.70 per cent to close at N8.82 trillion compared with the appreciation of 0.49 per cent recorded the previous day to close at N8.88 trillion.

Activities of  profit takers  waned on Wednesday as the NSE ASI depreciated marginally by 0.06 per cent to close at 25,630.62, compared with the depreciation of 0.70 per cent on Tuesday. The depreciation recorded in the share prices of Dangote Cement Pl c, Dangote Sugar Plc, Flour Mills Nigeria Plc, Lafarge Africa Plc and ETI Plc accounted for decline recorded in the index. Similarly, the market capitalisation depreciated by 0.02 per cent to close at N8.820 trillion compared with the depreciation of 0.70 per cent recorded the prior day to close at N8.822 trillion.

The equities market rebounded on Thursday on renewed bargain hunting activity. This resulted in  an increase  of  the  twin  market  performance measures,  NSE  ASI  and  market capitalisation,  by  91.5  basis points  each.   Shares of major petroleum products marketers such as Forte Oil Plc, Total Oil Nigeria Plc, and Mobil Oil Nigeria Plc, appreciated by N10.50, N9.19 and N5.57 to close at N220.50, N159.60 and N160.66 per share respectively. However, fast moving consumer  goods  maker,  Unilever Nigeria,  retreated  by  N1.22  to close at  N36.00  while  shares  of  major  cement  manufacturer, Lafarge Africa Plc  lost N1.00 to close at N68.00.

Last Friday, the market surged 2.23 per cent or 575.97 points to 26,441.03. The session was largely driven by gains in Dangote Cement Plc, and Nestle Nigeria Plc. There were also gains in Lafarge Africa Plc. Zenith Bank Plc, ETI Plc, Access Bank Plc and FBN Holdings Plc equally recorded significant gains. These performances offset the sell offs in Nigerian Breweries Plc. All major sectors closed positive led by the Banking sector which rose 3.80 per cent while the Oil and Gas sector followed closely, climbing 3.46 per cent. The Industrial sector increased by 2.55 per cent while the Consumer Goods was up 1.01 per cent. There was a considerable improvement in market activity as total volume and value spiked 117 per cent and 140 per cent to 568 million units of shares worth N3.58 billion.

 

Market Turnover

During the week under review,  volume and value of trading surged  101 per cent and 125 per cent as investors exchanged 1.826 billion shares worth N14.468 billion in 20,058 deals, up from  910.659 million shares valued at N6.409 billion that exchanged hands the previous week in 15,023 deals the previous week.

The Financial Services Industry led the activity chart with 1.471 billion shares valued at N10.686 billion traded in 11,038 deals, thus contributing 80.58 per cent and 73.86 per cent to the total equity turnover volume and value respectively.

The Conglomerates Industry followed with 187.026 million shares worth N313.287 million in 1,545 deals. The third place was occupied by the Consumer Goods Industry with a turnover of 74.728 million shares worth N2.054 billion in 3,633 deals.

 ETI Plc, Access Bank Plc and FBN Holdings Plc  accounted for 682.553 million shares worth N6.787 billion in 2,916 deals, contributing 37.38 per cent and 46.91 per cent to the total equity turnover volume and value respectively.

Also  a total of 382,448 units of Exchange Traded Products (ETPs) valued at N10.288 million executed in 43 deals during the week, compared with a total of 6,837 units valued at N16.316 million transacted the prior week in 25 deals.

A total of 8,033 units of Federal Government Bonds valued at N8.923 million were traded in 6 deals compared to a total of 23,903 units of Federal Government valued at N28.385 million transacted the previous week in 7 deals.

Gainers and Losers

Meanwhile, a total of 54 equities that appreciated in price during the week, higher than 40 equities of the previous week. Seventeen equities depreciated in price, lower than 25 equities of the previous week, while 118 equities remained unchanged lower than 124 equities of the previous week.

The top 10 gainers were:  Tiger Branded Consumer Plc (N2.00), Diamond Bank Plc (62 kobo), FCMB Plc (30 kobo), Neimeth Plc (22 kobo), TRANSCORP Plc (24 kobo), Skye Bank Plc (21 kobo), Livestock Feeds Plc (20 kobo), May & Baker Plc (17 kobo), United Capital Plc (30 kobo) and Unity Bank Plc (11 kobo).

Conversely, top 10 losers were: MRS Oil Nigeria Plc (N4.46), University Press Plc (81 kobo), Caverton Plc (14 kobo), Academy Press Plc (4 kobo), Portland Paints Plc (11 kobo), John Holt Plc (4 kobo), Berger Paints Plc (42 kobo), Golden Guinea Plc (84 kobo), Custodian and Allied Plc (10 kobo) and Presco(68 kobo).