Equities Market Records Largest Weekly Gain on Impressive Q1 Results

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WEEKLY REPORT

By Goddy Egene and Nosa Alekhuogie

Relief came the way of the Nigerian stock market last week as better-than-expected first quarter (Q1) results by companies attracted bullish sentiments and led to positive close.
The market had shed 0.9 per cent the previous on profit taking by investors. However, the bulls returned in full force last week following bargain hunting in reaction to impressive unaudited Q1 results to March 31, 2017.

Consequently, the Nigerian Stock Exchange (NSE) All-Share Index (NSE ASI) appreciated by 2.26 per cent to close at 25,758.51, while market capitalsiation rose by same margin to close higher at N8.913 trillion. Also, other Indices finished higher during the week with the exception the NSE Insurance, NSE Consumer Goods and the NSE Lotus II Indices that depreciated by 0.17 per cent, 0.05 per cent and 0.97 per cent while the NSE ASeM Index closed flat. Last week’s performance is the largest week-on-week gain this year.
“On the news front, it was relatively quiet in the macro space; however, the market was buoyed by: positive news surrounding FX policy, particularly with the commencement of trading at the Investors & exporters’ market, and relatively impressive Q1-17 results released by highly capitalised companies across both financial services and manufacturing sectors, analysts at Cordros Capital Limited said.
The NSE ASI closed on a positive note in four of the five trading sessions, recording its largest gain on Monday (2.21 per cent). In terms of sectoral performance, the NSE Banking Index led with 6.1 per cent. It was followed by the NSE Industrial Goods Index with 4.8 per cent. The NSE Oil & Gas Index appreciated by 2.48 per cent. Conversely, the NSE Consumer Goods Index shed 0.05 per cent, while the NSE Insurance Index closed 0.17 per cent lower.

Daily Market performance

Trading at the market was bullish on the first day as investors took position in market bellwethers such as Dangote Cement Plc, Nigerian Breweries Plc and Guaranty Trust Bank Plc which rose by 3.8 per cent, 2.8 per cent and 3.6 per cent respectively. The NSE ASI appreciated by 2.2 per cent to 25,747.05, while market capitalisation added N193 billion to close at N8.9 trillion.
The NSE Industrial Goods Index surged 6.3 per cent as a result of a rally in Lafarge Africa (+10.2 per cent) and Dangote Cement (+3.8 per cent). The NSE Banking Index grew by 3.0 per cent on the back of gains recorded by GTBank (+3.6 per cent) and Zenith Bank (+2.0 per cent), Diamond Bank (+5.6 per cent) and Stanbic IBTC (+5.0 per cent). Similarly, the NSE Oil & Gas Index appreciated 0.1 per cent. Conversely, the NSE Insurance Index slid 0.2 per cent following price depreciation in AIICO Insurance (-3.6 per cent) while the NSE Consumer Goods Index declined due to loss of 4.9 per cent suffered by Nestle.
The equity market maintained its uptrend on Tuesday with the NSE ASI appreciated by 0.28 per cent to close at 25,818.87 bolstered by gains in Lafarge Africa, UBA, Access Bank, GTBank and Stanbic IBTC Holdings. Investors traded 127.43 million shares valued at N909.33 million. The most actively traded sectors were: Financial Services (85.54 million), Conglomerates (21.29 million) and Consumer Goods (7.53 million), while the three most actively traded stocks were: FCMB (16.41 million), NEM (15.72 million) and Transcorp (12.54 million).
In terms of sectoral performance, all sector indices closed in the green, except the NSE Consumer Goods Index which fell by 0.2 per cent following price decline in Nigerian Breweries (-0.4 per cent).
The NSE Oil & Gas Index led sector gainers, rising by 1.1 per cent on the back of price appreciation in Mobil (+4.9 per cent) and Oando (+1.3 per cent). Also, the NSE Industrial Goods Index rose by 0.7 per cent, driven by interest in Lafarge Africa (+1.6 per cent). In the same vein, the NSE Banking and NSE Insurance indices added 0.3 per cent and 0.2 per cent on account of gains in Stanbic IBTC Bank (+3.8 per cent), GTBank (+0.8 per cent) and NEM Insurance (+5.0 per cent).
After two days of positive performance, the market closed in the red on Wednesday with the NSE ASI, shedding 0.77 per cent to close at 25,620.94. The decline followed the depreciation recorded in the share prices of Diamond Bank, Transcorp, Dangote Cement, UAC of Nigeria and Presco Plc.
However, investors exchanged 255.72 million shares valued at N1.67 billion, up by 83.49 per cent from N909.33mn recorded the previous day.
Despite closing on a bearish note, performance across sectors was broadly positive as all sector indices closed in the green, except the NSE Industrial Goods index which closed 1.6 per cent caused by losses recorded by Dangote Cement (-3.6 per cent).
The NSE Oil & Gas Index led the sectors with 1.2 per cent following gains in Oando (+6.1 per cent) and Seplat (+1.2 per cent). The NSE Banking Index followed, with a growth of 0.6 per cent on account of sustained interest in Stanbic (+5.0 per cent) and GTBank (+0.6 per cent).
Similarly, the NSE Insurance and NSE Consumer Goods indices trended 0.4 per cent and 0.2 per cent northward following price appreciation in NEM Insurance (+4.8 per cent) and Nigerian Breweries (+0.1 per cent) respectively.
The equity market recovered from the loss it recorded on Wednesday as more banks announced their Q1 results to close 0.52 per cent higher. The NSE ASI appreciated by 0.52 per cent to close at 25,753.00. The appreciation recorded in the share prices of Stanbic IBTC Holdings, Access Bank, GTBank, UBA and Nestle were mainly responsible for the gain recorded in the index. Access Bank and UBA released their Q1 results on Thursday.

Market turnover
Meanwhile, investors traded 1.333 billion shares worth N9.671 billion in 16,300 up from 896.748 million shares valued at N5.918 billion that exchanged hands in 11,185 deals the previous week.
The Financial Services Industry remained the most traded, accounting for 960.307 million shares valued at N6.098 billion traded in 9,675 deals, thus contributing 72.03 per cent and 63.06 per cent to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 154.404 million shares worth N330.132 million in 896 deals. The third place was occupied by Oil and Gas Industry with a turnover of 60.285 million shares worth N896.174million in1,379 deals.
Also traded during the review week were a total of 533 units of Exchange Traded Products (ETPs) valued at N32,204.30 executed in 15 deal compared with a total of 100 units valued at N6,799.00 transacted two weeks ago in one deal
A total of 4,705 units of Federal Government Bonds valued at N3.934million were traded last week in four deals, compared with a total of 1,311 units valued at
N1.346 million transacted the preceding week in seven deals.

Price Gainers and Losers
A look at the price movement chart showed that 38 equities appreciated in price last week, higher than the 24 equities of the previous week, while 25 equities depreciated compared with 31 equities of the previous week. Stanbic IBTC Bank Plc led the price gainers, appreciating by 28.2 per cent, trailed by Ashaka Cement Plc with 15.6 per cent. Livestock Feeds Plc chalked up 13.8 per cent, just as NPF Microfinance Plc garnered 12.8 per cent. United Bank for Africa Plc and Fidson Healthcare Plc gained 10.7 per cent and 10 per cent respectively. Other top price gainers were: Cutix (9.8 per cent); NASCON Allied Industries Plc (9.69 per cent) and C & I Leasing Plc (9.68 per cent).
On the flipside, Diamond Bank Plc led the price losers with 12.2 per cent, trailed by Unilever Nigeria Plc with 10.3 per cent. Transcorp Plc and Continental Reinsurance Plc shed 9.2 per cent and 9.0 per cent in that order. Berger Paints Nigeria Plc and FBN Holdings Plc went down by 7.8 per cent and 7.0 per cent respectively.
Other top price losers were: Julius Berger Nigeria Plc (4.9 per cent); Champion Breweries Plc (4.8 per cent) and Learn Africa Plc (4.6 per cent).