Market Remains Bearish on Continuing Profit-taking

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WEEKLY REPORT

The Nigerian equities market remained bearish last week as profit taking continued. After five weeks of positive performance, the market had the previous week, the market succumbed to the pressure of profit taking, leading to the Nigerian Stock Exchange (NSE) All-Share Index to close   3.35 per cent  lower, despite the release of improved results for the half year results by Access Bank Plc, United Bank for Africa Plc and Ecobank Transnational Incorporated, profit taking continued last week.

Consequently, the NSE ASI went down by   0.74 per cent to close at 36,646.46, while market capitalisation shed N94.5 billion to close lower at N12.6 trillion. The year-to-date growth moderated to 36.36 per cent.  The profit taking was more pronounced in oil, insurance and industrial goods  stocks. As a result, the NSE Insurance Index led with a fall of 5.3 per cent. The NSE Oil & Gas Index fell by 3.7 per cent, while   the NSE Industrial Goods Index went down by 2.8 per cent. On the positive side, the NSE the Consumer Goods Index appreciated by 2.3 per cent followed by the NSE Banking Index closed 0.31 per cent higher.

 Daily Market Performance

When trading resumed on Monday, the sell pressure was on bellwether stocks. Consequently, market shed N115.9 billion to close on bearish note.

Although there were more price gainers (27) as against 16 price losers, losses recorded by bellwether stocks such as Dangote Cement Plc, Zenith Bank Plc, Nestle Nigeria Plc, FBN Holdings Plc among others caused the decline in market value.

According to analysts at Meristem Securities Limited, in spite of the price appreciation recorded on a number of tickers, the Nigerian bourse began the week on the negative note largely on the back of the profit taking witnessed on Dangote Cement. They said they expect a continuation of the current mixed sentiments in the coming trading days.

 Vitafoam Nigeria Plc led the price losers with 5.0 per cent, trailed by AXA Mansard Insurance Plc with 4.8 per cent. SCOA Nigeria Plc went down by 4.7 per cent. Paintcom shed 4.6 per cent, just as Skye Bank Plc and Dangote Cement Plc dipped by 4.4 per cent and 4.1 per cent in that order.

On the positive side, Flour Mills of Nigeria Plc led with 8.7 per cent, trailed by Transcorp Plc with 5.9 per cent. Honeywell Flour Mills Plc  and Dangote Flour Mills Plc appreciated by 5.0 per cent each, just as LearnAfrica Plc and Nigerian Aviation Handing Company Plc chalked up 4.9 per cent and 4.8 per cent in that order.

Market performance across sectors showed that two sectors closed negatively, while two ended in the bulls’ territory.  The NSE Banking Index advanced the most, up rising by 0.8 per cent due to price appreciation in GTBank and Ecobank Transnational Incorporated. Similarly, the Consumer Goods Index expanded 0.7 per cent.  On the flip side, the NSE Industrial Goods Index led with 2.3 per cent while   the NSE Insurance Index slid The Oil & Gas index closed the day flat.

 The bulls returned on Tuesday with the NSE ASI appreciating by 1.03 per cent to close at 36,962.48, while market capitalisation ended higher at N12.74 trillion. Although price gainers and losers were 22 apiece, gains by Dangote Cement Plc, Nestle Nigeria Plc, Forte Oil Plc and Total among others made the bulls to have the upper hand.

But Total Nigeria Plc and Caverton Offshore Services Group (COSG) Plc led the price gainers with 5.0 per cent each. Some investors have renewed their demand for COSG apparently in reaction to the company’s new contract with Chevron Nigeria Limited (CNL).

Caverton Helicopters, a subsidiary of COSG, has been awarded a 5-year logistics support contract by CNL, operator of the Nigerian National Petroleum Corporation (NNPC/CNL Joint Venture, for provision of aviation services with a 2- year renewable option.

 The Group Chairman of the Caverton, Mr. Remi Makanjuola had  Caverton Helicopters was  poised to continue to work on consolidating its vision to be the leading provider of premium aviation services in sub-Saharan Africa to the oil and gas industry.

 “We are thankful to our clients, the aviation regulators, our shareholders, our staff and many others who have played a role in our development and success as a company,” he said.

Meanwhile, C & I Leasing occupied the third place on the gainers’ chart with 4.8 per cent, followed by UACN Property Development Company Plc with 4.7 per cent. Skye Bank Plc garnered 4.6 per cent, just as Vitafoam Nigeria Plc with 4.5 per cent.

Conversely, Conoil Plc  led the price losers with 9.7 per cent, trailed by Mobil Oil Nigeria Plc and Neimeth International Pharmaceuticals Plc with 5.0 per cent each. UAC of Nigeria Plc and May & Baker Nigeria Plc and Union Bank of Nigeria Plc shed 4.8 per cent apiece.

In terms of sectoral performance, the NSE Industrial Goods Index led sector gainers with 2.1 per cent. The NSE Consumer Goods Index followed with a gain of 0.3 per cent. On the flip side, the NSE Banking Index led with 1.0 per cent, while the NSE Oil & Gas Index went down by 0.3 per cent.

The market extended gains  on Wednesday helped by banking stocks. The  NSE ASI appreciated by 0.26 per cent to close at 37,059.21 following gains by Nigerian Breweries, GTBank, Zenith Bank Plc and Access Bank Plc.

Access Bank attracted more demand as investors reacted to its half year results, where it declared an interim dividend of 25 kobo per share.

Market turnover on Wednesday rose by 50.5 per cent as investors committed N5.53 billion to 264.28 million shares in 3,849 deals, compared with N3.67 billion invested the previous day.

The three most actively traded sectors were: Financial Services (227.35 million shares), Industrial Goods (14.29 million shares), and Consumer Goods (6.70 million shares), while the most   actively traded stocks were: Zenith Bank (57.24 million shares), UBA (40.59 million shares) and GTBank (28.49 million shares).

However, after two days of being in control, the bulls were displaced by the bears making the market to close 1.20 per cent lower at 37,059.21.

The depreciation recorded in the share prices of Dangote Cement, Access Bank, Zenith Bank, Guinness, and Stanbic IBTC Holding was mainly responsible for the gain recorded in the Index

Market Turnover

A look at the market turnover showed that investors traded 1.538 billion shares worth N24.218 billion in 19,187 deals, compared with 1.394 billion shares valued at N25.037 billion that exchanged hands  the previous week in 23,133 deals.

However, the Financial Services Industry remained most active recording   1.209 billion shares valued at N14.210 billion traded in 10,692 deals, thus contributing 78.65 per cent and 58.68 per cent to the total equity turnover volume and value respectively. The Agriculture Industry followed with 109.646 million shares worth N154.438 million in 321 deals. The third place was occupied by Consumer Goods Industry with a turnover of 83.608 million shares worth N6.247 billion in 3,726 deals.

Trading in the top three equities- Unity Kapital Assurance Plc, Guaranty Trust Bank Plc and AIICO Insurance Plc- accounted for 579.065 million shares worth N7.900 billion in 1,856 deals.

Price Gainers and Losers

 

Meanwhile, 32 equities appreciated last week higher than 19 equities of the previous week, while 40 equities depreciated lower than 51  of the previous week.

Caverton Offshore Support Group led with 16 per cent, followed by Dangote Flour Mills Plc with 10.3 per cent. UACN Property Development Company Plc chalked up 9.0 per cent, while C & I Leasing Plc  and International Breweries Plc added 8.7 per cent.  Dangote Sugar Refinery Plc and  Livestock Feeds Plc garnered 6.5 per cent and  5.2 per cent respectively, just as Jaiz Bank Plc and N.E.M Insurance Plc appreciated by 5.2 apiece.  Flour Mills of Nigeria Plc closed the week  5.0 per cent higher.

Conversely, Double One Plc led the price losers with 14.4 per cent, followed by Conoil Plc with 14.2 per cent. Unilever Nigeria Plc shed 9.2 per cent, while AXA Mansard Insurance Plc  went down by 7.3 per cent. Other top price losers included: Linkage Assurance Plc (6.4 per cent);Skye Bank Plc (5.9 per cent); Zenith Bank Plc (5.8 per cent); Custodian and Allied Plc (5.2 per cent);MRS Oil Nigeria Plc (5.0 per cent) and Seven-Up Bottling Company Plc (4.9 per cent).