Equities Market Sustains Positive Momentum on Bargain Hunting


By Goddy Egene and Nosa Alekhuogie

The Nigerian equities market last week sustained the positive momentum to close higher for the second consecutive week. After six weeks of negative trend, the market rebounded the previous week, rising by 1.61 per cent on renewed demand for oil/gas and banking stocks.

The market maintained an upward swing for the second week as most investors took   positions in  undervalued and fairly priced stocks, after the selloffs experienced in November. Consequently, the Nigerian Stock Exchange (NSE) All-Share Index (NSE) ASI closed 0.30 per cent higher at 25,817.69, while market capitalisation ended at N8.883 trillion.

Apart from Tuesday that market was controlled by the bears, leading to a decline of 0.28 per cent, the market was green during the remaining four days. The market gained marginally on Monday (0.01 per cent), but finished stronger with gains of 0.25 per cent and 0.31 per cent on Thursday and Friday respectively. Also, majority of the sector indices finished higher than their opening   level, except the NSE Consumer Index which fell by 0.78 per cent and NSE  Industrial Goods Index, which shed 3.33 per cent.

 The NSE Oil & Gas Index led the gainers with 7.74 per cent. The NSE   Banking Index followed with a gain of 0.51 per cent, while   the NSE Insurance Index rose by 0.44 per cent.


Daily Market Performance   Summary

 The market opened on a positive note, though marginally as the NSE ASI rose by  0.01 per cent  to close at 25,743.03 .The appreciation recorded in the share prices of Forte Oil, Total Nigeria, Oando, Transcorp and Zenith Bank were responsible for that day.  The total value of stocks traded on the first day was N3.14 billion, up by 133.14 per cent  from N1.35 billion recorded the previous Friday, while the total volume of stocks traded was 175.05 million in 3,048 deals.  The marginal growth in the index indicated that profit taking was imminent.

Performance across sectors was mixed as two indices appreciated while three declined. The NSE Oil & Gas Index led the  sector gainers, improving 3.6 per cent on account of gains in Total(+10.1 per cent) and Forte  (+10.2 per cent) while the  NSE Consumer Goods Index went up by 0.05 per cent due to positive sentiment toward Nigerian Breweries (+1.4 per cent).

Conversely, the NSE Industrial Goods Index depreciated by 1.5 per cent to lead the losers following sell-offs in Lafarge Africa Plc (-4.2 per cent). The NSE Insurance and Banking indices followed with decline of 1.2 per cent and 0.5 per cent in that order.

After four days of positive performance, profit taking set in on Tuesday, pulling the NSE ASI down by 0.28 per cent to close at 25,671.23. Similarly, market capitalisation went down by same margin to be at N N8.83 trillion.  Losses in Guinness Nigeria (-5.0 per cent), Dangote Cement (-1.5 per cent) and Nestle Nigeria (-1.2 per cent) influenced the negative performance.

However, the oil stocks defied the bears, closing higher. Consequently, the NSE Oil & Gas Index appreciated by 2.8 per cent due to sustained interest in Total (+10.2 per cent) and Forte Oil (+10.2 per cent). Similarly, the NSE Banking Index closed positively, rising by 0.1 per cent.

On the contrary, persistent sell offs in Guinness (-5.0 per cent) and Nestle (-1.2 per cent) dragged the NSE Consumer Goods Index 0.8 per cent southwards. Also, the NSE Industrial Goods Index fell 0.6 per cent on the back of price depreciation in Dangote Cement (-1.5 per cent). The total value of stocks traded stood at N2.49 billion, invested in 189.41 million shares.

The bulls returned on Wednesday to reverse the negative trend of the previous day. Specifically, the NSE ASI went up by 0.01 per cent to close at 25, 673.80 points, while the market capitalisation added N2.6 billion to close at N8.8 trillion. Price appreciation in Forte Oil (+10.2 per cent), Guinness (+3.1 per cent) and Nestle (+0.6 per cent) lifted the market into the green zone. Activity level was mixed as volume traded rose 35.0 per cent to 255.7 million  units while value traded slid 16.6 per cent to N2.1 billion respectively.

Sectorally, the NSE Oil & Gas sustained the lead with a gain of 0.6 per cent on gains by Forte Oil Plc. The NSE Insurance Index rose by 0.5 per cent, just as the NSE Banking Index rose marginally by 0.01 per cent.

Conversely, the NSE Consumer Goods Index fell 0.4 per cent on account of sell pressure on Nigerian Breweries (-1.0 per cent) while the NSE Industrial Goods Index closed flat.

The market remained in the green territory on Thursday as investors took position in bellwether stocks trading at attractive prices. As a result, NSE ASI grew 0.25 per cent to 25,739.18. In the same vein, market capitalsiation added N22.5 billion to close at N8.69 trillion, following gains recorded by Mobil, Forte Oil, Oando, GTBank and FBN Holdings. Investors traded 165.99 million shares valued at  N1.27 billion, down by 38.8 from N2.08 billion the previous day.

The most actively traded sectors were: Financial Services (119.8 million shares), Consumer Goods (22.81 million shares) and Conglomerates (12.6 million shares), while the three most actively traded stocks were: Diamond Bank (80.27 million shares), International Breweries (16.46 million shares) and Transcorp (11.4 million shares).

The equity market maintained its positive momentum  on Friday as the NSE ASI rising  by 0.31 per cent to close at 25,817.69 points due to appreciation in the in the share prices of Forte Oil, ETI, UBA, Nigerian Breweries and GTBank.



Market turnover

Meanwhile, market turnover stood at 894.759 million shares worth N10.629 billion traded in 13,418 deals compared with 2.479 billion shares valued at N9.988 billion that exchanged hands in 12,059 deals the previous week.

The Financial Services Industry led the activity chart with 695.612 million shares valued at N2.542 billion traded in 6,978 deals. With this performance, the sector contributed 77.74 per cent and 23.92 per cent  to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 71.988 million shares worth N5.956 billion in 2,362 deals. The third place was occupied by the Conglomerates Industry with a turnover of 56.868 million shares worth N112.727 million in 717 deals.

During the review week, investors traded  2,850 units of Exchange Traded Products (ETPs) valued at N355,162.85 executed in 21 deals, compared with a total of 2,340 units valued at N39,848.85 transacted last week in 15 deals the previous week. However, like the previous week, there was no bond traded last week.


Gainers and losers

The price movement chart showed that 27 equities appreciated in price last week same number of the stocks that appreciated the previous week. However, 36 equities depreciated as against 32 stocks  that declined  the previous week, while 112 equities remained unchanged lower than  the 116  equities recorded in the preceding week.

Forte Oil led the price gainers with 62.8 per cent, trailed by Portland Paints and Products Nigeria Plc with 26.5 per cent. Transcorp Plc chalked up 19 per cent, while  FBN Holdings Plc garnered 10.7 per cent. Total Nigeria Plc, Fidelity Bank Plc and Livestock Feeds Plc went up by 10.1 per cent, 8.8 per cent and 8.3 per cent in that order. Other top price gainers are: Honeywell Flour Mills Plc (8.1 per cent); African Prudential Registrars Plc( 7.4 per cent);  and N.E.M Insurance Plc (5.4 per cent).

On the contrary, Guinness Nigeria Plc led the price losers with 12.4 per cent, trailed by Neimeth International Pharmaceuticals Plc, Avon Crowncaps Plc and Lafarge Africa Plc with 9.1 per cent respectively. UACN Property Development Company Plc went down  by 8.7 per cent, while Vitafoam Nigeria Plc and Diamond Bank Plc  declined by 8.7 per cent and 7.6 per cent respectively. Wema Bank Plc, Stanbic IBTC Holdings Plc and Unilever Nigeria Plc shed 7.0 per cent, 6.6 per cent and 6.2 per cent in that order.