Equities Market Bearish as Investors Adopt Cautious Trading

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By Goddy Egene and Nosa Alekhuogie

The Nigerian equities market was characterised by cautious trading as investors await third quarter corporate performance of companies. Following the cautious trading,  lower volume and value of trade were recorded while the Nigerian Stock Exchange (NSE) All-Share Index  (ASI) fell by 0.95 per cent to close at 27,596.82 compared with a marginal growth recorded the previous week. Market capitalisation closed lower at N9.479 trillion.  The market recorded declines in four out of five  trading days of the week, to bring the year-to-date decline to 3.65 per cent.

Apart from the ASI, all other indices finished lower during the week with the exception of the NSE Industrial Goods Index that appreciated by 0.52 per cent.

The NSE Industrial Goods Index appreciated by 0.52 per cent. But the NSE Oil & Gas Index recorded the highest decline of 2.98 per cent following  losses by Forte Oil Plc (12.2 per cent), Oando Plc (2.1 per cent) and Eterna Oil Plc (1.0 per cent).

Consumer Goods Index followed with a decline of 1.94 per cent as a result of loss suffered by Cadbury Nigeria (16.2 per cent); Guinness Nigeria (3.6 per cent) and Nigerian Breweries Plc (2.5 per cent). Similarly the NSE Insurance Index and NSE Banking Index fell by 0.64 per cent and 0.50 per cent in that order.

Daily Market Performance  Summary

Last Monday, the market opened on a bearish note as huge sell offs in bellwethers across sectors – Nigerian Breweries (-3.1 per cent), Forte Oil Plc (-5.0 per cent) and Zenith (-2.0 per cent) – dragged the benchmark index 0.81 per cent lower to close at 27,634.99.

Similarly, market capitalisation shed N77.6 billion to close at N9.5 trillion. Activity level in the market was mixed as volume traded improved 15.8 per cent while value traded declined 49.2 per cent to close at 255.8 million  units and N778.4 million respectively.

Performance across sectors was bearish as all indices closed in red  except for  the NSE Insurance index,  that rose by  0.1 per cent. The  NSE Oil & Gas Index declined the most followed by the NSE Consumer Goods Index.

The bearish trend was sustained on Tuesday with the NSE ASI declining by 0.29 per cent to close at 27,555.31

The Nigerian Stock Exchange All Share Index (NSE ASI) depreciated by 0.29 per cent to close at 27,555.31, compared with the depreciation of 0.81 per cent recorded the previous day. The depreciation recorded in the share prices of Diamond Bank, Cadbury, UAC of Nigerian, Seplat and GTBank were responsible for the loss recorded in the NSE ASI.

This  negative performance was broadly driven by sell pressure on Seplat (-5.0 per cent), ETI (-2.6 per cent), Guinness (-3.9 per cent) and Nestle (-0.7 per cent). Consequently, market capitalization dipped N27.4 billion to settle at N9.5 trillion.

Similar to the previous trading session, performance across sectors was bearish as all indices closed in the red save for the Industrial Goods index which rose 0.3 per cent on account of bargain hunting in Lafarge Africa Plc(+0.8 per cent).

The market recorded its third consecutive decline on Wednesday as the NSE ASI fell by 0.28 per cent to close at 27,478.04. Similarly, the market capitalisation depreciated by 0.28 per cent to close at N9.44 trillion. The depreciation recorded in the share prices of Forte Oil, Dangote Sugar, Cadbury, Oando and Zenith Bank were responsible for the  negative performance.

Just as the previous two trading sessions, sectoral performance showed negative in all except the NSE Industrial Goods Index which rose 0.3 per cent driven by bargain hunting in  Lafarge Africa. The  NSE Oil & Gas Index  fell by 3.0 per cent, while  the NSE Insurance Index  went down by 0.2 per cent. Similarly, the NSE  Consumer Goods and Banking indices dipped 0.2 per cent and 0.1 per cent in that order.

Thursday was the only day the market recorded a positive performance last week as  appreciation recorded in the share prices of GTBank, Seplat, UBA, Oando and Access Bank lifted the NSE ASI to close 0.44 per cent higher. However, the rebound witnessed in the market on Thursday could not be sustained on the Friday, which was the last trading day for the week. The market remained flat as the NSE ASI closed at 27.596.82.

The total value of stocks traded on Friday fell by 83 per cent to N656 billion, from N4.01 trillion the previous day, while the total volume of stocks traded was 70.93 million in 1,973 deals.

Market turnover

Market turnover for the week stood at  674.721 million shares worth N7.657 billion in 12,290 deals compared with  a total of 1.163 billion shares valued at N9.251 billion that exchanged hands  the previous week in 14,992 deals. The Financial Services Industry   led the activity chart with 495.992 million shares valued at N2.767 billion traded in 6,522 deals; thus contributing 73.51 per cent and 36.14 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 80.885 million shares worth N95.212 million in 536 deals. The third place was occupied by the Construction/Real Estate Industry with a turnover of 32.484 million shares worth N18.498 million in 70 deals. Trading in the top three equities namely – Law Union & Rock Insurance Plc, Ecobank Transnational Incorporated (ETI)and Transnational Corporation of Nigeria Plc   accounted for 263.199 million shares worth N1.033 billion in 637 deals, contributing 39.01 per cent and 13.49 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 10,779 units of Exchange Traded Products (ETPs) valued at N63,890.18 executed in 22 deals, compared with a total of 119,743 units valued at N600,589.51 transacted  the previous  week in 25 deals.

Similarly, a total of 1,700 units of Federal Government Bonds valued at N1.518 million were traded in 1 deal compared to a total of 1,510 units of Federal Government Bonds valued at N1.558 million transacted two weeks ago in one deal.

Gainers and losers

Meanwhile, the price movement chart showed 16 gainers, which is lower than 22 equities of the previous week. Conversely, 38 equities depreciated in price, lower than 42 equities of the previous week, while 126 equities remained unchanged. Caverton led the price gainers, rising by 13.1 per cent. The stock had similarly led the gainers the previous week.

N.E.M Insurance Plc followed with a gain of 5.0 per cent, just as Neimeth International Pharmaceuticals Plc and Wema Bank Plc rose by 4.8 per cent apiece. Beta Glass Plc and GTBank Plc appreciated by 3.3 apiece. Other top price gainers included: Skye Bank Plc(3.2 per cent); Stanbic IBTC Holdings Plc (3.0 per cent); Mobil Oil Nigeria Plc (2.1 per cent ) and Learn Africa Plc (1.6 per cent).

Conversely, Cadbury Nigeria Plc, which led the price losers, shedding 16.2 per cent trailed by GSK Nigeria Plc with 14.1 per cent. A.G Leventis Plc fell by 12.9 per cent, while Forte Oil Plc and NAHCO declined by 12.2 per cent and 11.5 per cent in that order.

Ashaka Cement Plc and E-Tranzact went down by 9.7 per cent and 9.5 per cent respectively. Other top price losers included: ETI(9.1 per cent) and Livestock Feeds Plc (7.2 per cent).