Bargain Hunting Lifts Stock Market 

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WEEKLY REPORT

By Goddy Egene and Nosa Alekhuogie

Bearish sentiments came to a halt at the stock market last week after four weeks of bear run as bargain hunters swooped on the market.  For four weeks, Nigerian equities market declined following   weak second quarter (Q2) corporate earnings and general economic headwinds. However, bargain hunters took advantage of the low prices and increased demand for some stocks, a development that led to the market recording gains in two days. Consequently, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) closed the week 1.47 per cent higher compared with a decline of 3.98 per cent the previous week.  The NSE ASI closed at 28,009.93, while the market capitalisation ended the week higher at N9.620trillion.

In a similar vein, all other indices finished higher during the week, with the exception of the NSE Consumer Goods Index, NSE Oil/Gas Index, NSE Lotus II and the NSE Industrial Goods Index that declined by 0.38 per cent, 5.16 per cent, 0.11 per cent and 2.24 per cent respectively, while the NSE ASeM Index closed flat.

The NSE Banking Index rose by 1.64 per cent  following rallies in Access Bank Plc, Guaranty Trust Bank Plc (+14.36 per cent) and  Zenith Bank Plc (+10.02 per cent).

Daily Performance Summary

Trading at the stock market had opened on Monday on a bearish note as  the NSE ASI  extended losses to the sixth trading session on account of sell pressures on bellwether stocks in the Oil & Gas and Industrial Goods sectors which offset bargain hunting in the small- to mid-cap segment. The ASI fell by 0.11 per cent to close at 27,629.90. Sell-off in Forte Oil Plc (-9.7 per cent), Seplat Petroleum Development Company Plc (-5.0 per cent) and Dangote Cement (-2.5 per cent) dragged market performance  on Monday. Investors lost a total of N10.1 billion on that day as market capitalisation fell to N9.5 trillion.

The Industrial Goods (-1.57 per cent) and Oil & Gas (-3.89 per cent) indices shed weight, following losses in Dangote Cement, Lafarge Cement Plc (-0.69 per cent), Forte Oil and Seplat   respectively.  On the positive side, the NSE   Banking Index (+1.72 per cent) and NSE Insurance Index  (+0.51 per cent)  closed  in green, driven by positive interest in Zenith Bank  (+1.82 per cent), GTBank (+1.28 per cent), FBN Holdings Plc (+1.77 per cent), Custodian Insurance Plc (+4.99 per cent), AXA Mansard Insurance  Plc  (+4.62 per cent) and AIICO Insurance Plc (+2.86 per cent) respectively.

Similarly, rallies in Nigerian Breweries Plc (+5.00 per cent) and Honeywell Flour Nigeria Plc (+4.86 per cent) drove the Consumer Goods (+2.12 per cent) index northwards. Market breadth was positive with 26 gainers versus 17 losers, while total volume traded climbed by 48.01 per cent to 378.51 million shares, valued at N2.27billion, and traded in 3,519 deals.

The market rallied on Tuesday as a 6-day bearish run came to an end amid  Monetary Policy Committee  expectations as well as rally in Tier-one  banks. The   NSE ASI rose 1.14 per cent to close at 27,945.02 points just as market capitalisation closed at N9.6 trillion.  The recovery in the market on Tuesday was largely buoyed by banking stocks – GTBank (+5.0 per cent), Zenith Bank  (+4.7 per cent) and Ecobank Transnational Incorporated (+8.4 per cent).  Also, the positive investors’ reaction to the   FBN Holdings Plc’s half year results led to the performance of the sector.

 The bullish sentiments were sustained for a second day  session, with the  benchmark index closing in green, rising by 0.93 per cent to   28,205.62. Similarly, market capitalisation added N70.52 billion to N9.69 trillion. A further analysis of the showed that  the NSE  Banking Index and NSE Industrial Goods indices went up by 1.98 per cent and 0.99 per cent respectively.  The two sectors were boosted by gains recorded by GTBank (+4.96 per cent), Zenith Bank (+2.50 per cent), Dangote Cement  (+2.89 per cent) and CAP Plc  (+4.17 per cent) respectively.

However, the bullish sentiments came to a halt  on Thursday as  investor appetite weakened following a stream of disappointing earnings by companies such as Seplat, Cement Company of Northern Nigeria Plc and Julius Berger Nigeria Plc; the benchmark index closed 0.56 per cent lower. The NSE ASI closed 0.56 per cent lower at 28,046.96 points, while market capitalisation fell by N54.49 billion to N9.63 trillion. All broad sector indices declined  on Thursday . A loss in Oando (-3.13 per cent) led to a decline in the Oil & Gas (-0.24 per cent) index, while the Banking (-1.43 per cent) and Insurance (-1.46 per cent) indices closed in red following losses in FBN Holdings Plc (-4.83 per cent), Zenith Bank  (-2.92 per cent), NEM  Insurance (-4.17 per cent) and AXA Mansard  (-4.68 per cent) respectively. There was no respite either for the Industrial Goods (-0.03 per cent) and Consumer Goods (-0.52 per cent) indices, due to decline in shares of Berger Paints (-4.98 per cent), Cutix (-4.97 per cent), Nigerian Breweries Plc (-0.92 per cent) and Honeywell Flour Mills Plc (-3.03 per cent) in that order.

The equity  market slide further on the last day of the week as the NSE ASI depreciated by 0.13 per cent to close at 28,009.93. The depreciation recorded in the share prices of Transcorp, Stanbic IBTC, Lafarge Africa, Nigerian Breweries and PZ Cussons were mainly responsible for the loss recorded in the market. Similarly, the market capitalisation depreciated by 0.13 per cent to close at N9.62 trillion.

Market turnover

In line with the bullish week-on-week performance,   volume and value also appreciated last week. Investors traded  1.867 billion shares worth N16.330 billion in 21,584 deals last week, up from  1.350 billion shares valued at N9.287 billion that exchanged hands  the previous weeks. The Financial Services Industry remained the most active  with 1.591 billion shares valued at N9.787 billion traded in 13,810 deals, thus contributing 85.18 per cent and 59.93 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 72.101 million shares worth N141.675 million in 857 deals. The third place was occupied by the Healthcare Industry with a turnover of 57.563 million shares worth N148.547 million in 400 deals.

Also traded during the week were a total of 57,510 units of Exchange Traded Products (ETPs) valued at N439,941.91 executed in 32 deals, compared with a total of 11,420 units valued at N136,400.05 transacted  the previous  week in 42 deals.

A total of 5,749 units of Federal Government Bonds valued at N5.513 million were traded in 7 deals compared to a total of 13,550 units of Federal Government Bonds valued at N14.061 million transacted a week before in six  deals.

Gainers and losers

Meanwhile, 35 equities appreciated in price during the week, higher than 15  equities of the previous week. Conversely, 31 equities depreciated in price, lower than 44 equities of the previous week, while 114 equities remained unchanged. MRS Oil  Plc led the price gainers with 21.4 per cent, trailed by GTBank Plc with 14.3 per cent. Dangote Flour Mills Plc and Custodian and Allied Plc appreciated by 10.5 per cent.

Other top price gainers included: Axa Mansard Insurance Plc (10.2 per cent); Zenith Bank Plc (10 per cent); Unity Bank Plc (9.6 per cent) DN Meyer Plc (9.6 per cent);Oando Plc (9.3 per cent) and Access Bank Plc (8.1 per cent).

Contrarily, Skye Bank Plc led the price losers with 17.6 per cent trailed by NEM Insurance Plc (12 per cent), just as Red Star Plc, and Forte Oil Plc shed 10.5 per cent and 9.9 per cent respectively.

Other top losers were: Seplat (9.7 per cent); PZ Cussons Plc (9.7 per cent); Union Bank of Nigeria Plc (7.1 per cent); UACN Property Development Company Plc (6.4 per cent); Lafarge Africa Plc (6.1 per cent) and Flour Mills of Nigeria Plc (5.8 per cent).