Equities Investors Count Losses as Market Remains Under Pressure

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WEEKLY REPORT

By Goddy Egene and Nosa Alekhuogie

Negative sentiments persisted at the stock market last week amid influx of unimpressive corporate earnings for the nine months ended September 30, 2016.  The market had shed N103 billion the previous week when the results started pouring in, showing decline in profitability and some cases losses. The bearish trend persisted last week, leading to another decline in market indicators. Just like the previous week, the Nigerian Stock Exchange (NSE) All-Share Index fell by 1.16 per cent to close lower at 26,981.60, while market capitalisation shed N86.4 billion to close at N9. 3trillion. Investors continued to liquidate their positions across board for majority of the week, recording the biggest loss (-0.66%) on Thursday, and gained only on Tuesday (+0.21 per cent).

Apart from the ASI, other sectoral indices finished lower with the exception of the NSE Insurance, NSE Lotus II and NSE Industrial Goods Indices that appreciated by 1.29 per cent, 2.11 per cent and 2.98 per cent respectively while the NSE ASeM Index closed flat. The NSE Oil and Gas recorded the highest decline of 3.99 per cent on the account of losses suffered by Total Nigeria Plc and Forte Oil Plc. The NSE Banking Index shed 3.22 per cent as Guaranty Trust Bank Plc and Zenith Bank Plc went down.

Also, the NSE Consumer Goods Index fell by 0.27 per cent following decline by Cadbury Nigeria Plc, Seven-Up Bottling Company Plc and International Breweries Plc lost 4.7 per cent, 2.7 per cent and 2.1 per cent in that order.

Daily Market Performance   Summary

Trading had opened for the week on a bearish note on Monday as the NSE ASI declined by   0.27 per cent to close at 27,220.09 , triggered by losses in the share prices of Zenith Bank, Lafarge Africa, GT Bank, Oando and Flour Mills of Nigeria.

 Similarly, the market capitalisation recorded a depreciation of 0.27 per cent to close at N9.35 trillion. The total value of stocks traded on the first day of the week stood at  N1.88 billion, while  volume of stocks  was 219.89 million shares exchanged in  3,955 deals. The three most actively traded stocks were: WAPIC Insurance Plc (26.90 million shares), Sterling Bank (26.31 million shares) and UBA (21.67 million shares.

 Performance across sectors was mixed as three sectors advanced while two declined. The NSE Insurance Index appreciated the most (+1.1 per cent) while the NSE Oil & Gas Index added 0.5 per cent.

Conversely,   the NSE Industrial Goods Index emerged the top declining sector, losing 1.9 per cent followed by the NSE Banking Index with a  0.9 per cent slide.

Equities rebounded on Tuesday on bargain hunting by investors to shrug off the bearish start to the week. The ASI went up by 0.12 per cent to close at   27,252.48 and thus paring  year-to-date loss to  4.9 per cent. The positive performance was partly bolstered by  bargain hunting in Tier-1 banks – GTBank (+1.3 per cent) and Zenith Bank  (+0.8 per cent)  as well as strong buy sentiment in Okomu Oil Palm Plc due to its nine months impressive results.

However, the market turned bearish again on Wednesday with the NSE ASI shedding   0.11 per cent to close at 27,223.08 on account of sell pressure on large cap stocks. Price depreciation in ETI (-4.9 per cent), Nigerian Breweries (-0.7 per cent), GTBank (-0.8 per cent) and Total (-3.6 per cent).

 Activity level was mixed as volume traded improved 8.5 per cent to 202.7 million units  just as  value traded  fell  4.0 per cent  to N1.3 billion.

An analysis of the sectoral performance showed  that only the NSE  Industrial Goods Index was the lone gainer,  rising by 1.7 per cent. The positive movement was influenced by gains in Lafarge Africa (+4.8 per cent).

But the Oil & Gas Index declined by 1.0 per cent, while the NSE  Banking Index followed, losing 0.6 per cent  on the back of sell offs in ETI (-4.9 per cent) and GTBank (-0.8 per cent). The NSE Consumer Goods Index also closed 0.1 per cent lower.

 The Nigerian equities market maintained a negative close on Thursday driven by highly capitalised Dangote Cement Plc and Nigerian Breweries Plc. The NSE ASI declined by 0.66 per cent to close at 27,044.36. But for the losses by Dangote Cement, the market would have closed in the positive territory. Specifically, excluding Dangote Cement, the ASI would have ended 0.17 per cent higher.

However, the decline of 1.47 per cent decline in Dangote Cement drove the market to close lower. Also, Nigerian Breweries Plc fell by 1.48 per cent. Similarly, market capitalisation shed N61.4 billion to be at N9.3 trillion. Other highly capitalised stocks that depreciated included: Ecobank Transnational Incorporated, Guaranty Trust Bank Plc and Nestle Nigeria Plc.

Trading activity level was mixed as volume t fell 44.5 per cent to 112.5 million shares while value traded rose 87.4 per cent to N2.4 billion. The most actively traded sectors were: Financial services (60.21 million share), Healthcare (24.27 million shares) and, Consumer Goods (12.03 million shares), while three most actively traded stocks were: May and Baker (23.42 million shares), Sterling Bank (8.79 million shares) and Transcorp (8.31 million shares).

The market continued its losing streak for the third consecutive on Friday to end the week negatively. The NSE ASI fell by 0.23 per cent to close at 27,044.36. The depreciation recorded in the share prices of Seplat, Nigerian Breweries, Access Bank, Total Nigeria and GTBank were responsible for the loss.

 

Market turnover

Meanwhile, equities turnover for the week was 873.838 million shares worth N8.024 billion in 15,944 deals compared with 678.710 million shares valued at N6.875 billion that exchanged hands in 11,808 deals the previous week.

The Financial Services Industry remained the most active with 654.180 million shares valued at N2.837 billion traded in 9,835 deals; thus contributing 74.86 per cent and 35.36 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 74.722 million shares worth N4.141 billion in 2,367 deals. The third place was occupied by the Conglomerates Industry with a turnover of 61.617 million shares worth N93.366 million in 666 deals.

Trading in the top three equities – Sterling Bank Plc, FCMB Group Plc and Transnational Corporation of Nigeria Plc accounted for 250.205 million shares worth N237.138 million in 3,654 deals.

 In terms of Exchange Traded Products (ETFs) investors traded a total of 56,688 units of  ETPs valued at N817,310.72 executed in 31 deals, compared with a total of 5.079 million units valued at N49.828 million transacted  the previous week  in 57 deals.

Similarly, a total of 13,020 units of Federal Government Bonds valued at N12.953 million were traded in 14 deals as against a total of 4,100 units of Federal Government Bonds valued at N4.287 million transacted in three deals   the preceding week.

Gainers and losers

The price movement chart showed   that 24 equities appreciated in price during the week, higher than the 21 equities of the previous week. Thirty-seven equities depreciated in price, lower than 41 equities of the previous week, while 120 equities remained unchanged. Learn Africa Plc led the price gainers with 23.4 per cent followed by Airline Services and Logistics Company Plc, gaining 15.4 per cent. Okomu Oil Palm Plc appreciated by 14.6 per cent, just as MRS Oil Nigeria Plc, Dangote Flour Mills Plc and Lafarge garnered 13.7 per cent, 13.7 per cent and 11.6 per cent respectively among others.

Conversely, Oando Plc led the price losers’ chart with 16.7 per cent, trailed by University Press Plc, which shed 15.1 per cent. UACN Property Development Company Plc declined by 13.8 per cent among others.