Equities Close Higher on Bargain Hunting  

WEEKLY REPORT

The stock market reversed its negative performance of the previous week to record a growth of 0.22 per cent. The growth followed   gains recorded on the last three trading days of the week. The market had the previous week halted a three-week rally as investors moved in to take profit.

However,  the bulls returned last week Wednesday to lift the to the positive territory. Consequently, the  NSE All-Share Index advanced by 0.22 per cent to  close at 38,522.14, while market capitalisation settled higher at N13.709 trillion.

Similarly, all other indices finished higher during the week with the exception of the NSE ASeM, NSE Consumer Goods and NSE Lotus II Indices that depreciated by 1.82 per cent, 1.37 per cent, and 0.51 per cent respectively. Year-to-date the market has recorded a gain of 43.34 per cent.

Commenting on the performance, analysts at Meristem Securities Limited attribute the upbeat performance to price gains noted on stocks that had previously shed value at the beginning of the week.

“The selling pressures that pervaded the consumer goods space were outweighed by positive sentiments on stocks in other sectors, hence the positive close of the market. We do not rule out sell-offs in the coming week, as we expect profit-taking activities on stocks presently trading at relatively high prices,” they said.

Daily Market Performance

Still under the pressure of profit taking the market closed 1.24 per cent on Monday, pulling the index to close at 37,957.96. The depreciation recorded in the share prices of Dangote Cement, Cadbury, Flour Mills, Access Bank and Zenith Bank led to the decline.

The three most actively traded stocks were: Dangote Cement (550.08 million shares), GTBank (41.33 million shares) and Zenith Bank (35.29 million shares).

According to analysts at FSDH Research, “market activity across sectors was mostly bearish for the first trading day of the week. Prices tended southwards mostly owing to profit taking and price corrections. With the bearish mood in the market today, the equity market is moving close to an oversold position and may rebound during the week.”

The bearish sentiments continued on Tuesday as the index sliding further by 0.46 per cent to close at 37,783.76.

Again, the negative performance resulted from  decline in the share  prices of Zenith Bank, Dangote Cement, Dangote Sugar, GTBank and Nigerian Breweries  Plc among.

  In line with the negative trend, performance across sectors was negative as all indices trended southwards save for the Insurance index which gained 0.8 per cent.

The NSE  Banking Index topped the losers chart, depreciating 0.7 per cent due to losses in ETI (-4.0 per cent) and Zenith Bank (-0.9 per cent). The  NSE Industrial Goods Index trailed with a decline of  0.4 per cent owing to profit taking sustained in Dangote Cement (-0.7%) and Lafarge  Africa (-0.5 per cent). Similarly, the  NSE Consumer Goods  Index  and NSE  Oil & Gas Index shed 0.2 per cent apiece.

However,  the market  witnessed a rebound on Wednesday  after two days of bearish trading. The index  appreciated by 0.40 per cent to close at 37,933.86.

The positive performance was boosted by gains recorded in the share prices Zenith Bank Plc, United Bank for Africa Plc, Nestle, GTBank and Seplat. In all, 23 stocks appreciated while 22 depreciated. Champion Breweries Plc, Linkage Assurance Plc and Seplat led the price gainers with 5.0 per cent apiece. NAHCO Plc trailed with 4.8 per cent, just as Learn Africa Plc, Unilever Nigeria Plc and Honeywell Flour Mills Plc added 4.7 per cent, 4.5 per cent and 2.3 per cent respectively.

Conversely, Flour Mills of Nigeria Plc led and PZ Cussons Nigeria Plc led the price 4.9 per cent apiece.

The price loss by FMN is coming despite the company’s plan to raise fresh capital.  Flour Mills of Nigeria recently applied to the NSE to raise about N39.856 billion from the existing shareholders.  The funds would be raised through the issuance of 1,476,142,418 ordinary shares of 50 kobo each at N27 per share Rights Issue to existing shareholders on the basis of nine new shares for every 16 shares already held.

The company had been contemplating raising fresh capital to ease the debt burden and reduce high interests.  However, the company’s   stockbrokers, Stanbic IBTC Stockbrokers Limited, formally applied  to the NSE for the Rights Issue.

On the other hand, PZ Cussons suffered a price decline despite recording a profit for the half year ended November 30, 2017, compared with a loss in the corresponding of 2016.

The company recorded a turnover of N41.123 billion, up by 23 per cent compared with N33.302 billion in the corresponding period ended November 30, 2016.

PZ Cussons  reaped the benefits of the stable foreign exchange as its forex loss declined by 47.9 per cent to N2.572 billion from N4.938 billion in 2016. However, interest paid on borrowings remain high with net cost of finance jumping by 957 per cent to N58.458 million to N501.183 million in 2016.

Consequently, profit before tax stood at N868.683 million compared with a loss of N425.177 million, while PAT improved to N589 million as against a loss of N288.9 million in 2016.

 The market sustained the recovery recorded on Wednesday with the index appreciating 1.10 per cent to close higher at 38,350.64. The lift came from appreciation in the share prices of Dangote Cement, FBN Holdings, UBA, Access Bank and Transcorp.

In terms of sectoral performance, three of the five indices trended southwards. The NSE Industrial Goods Index appreciated the most, rising 2.2 per cent, trailed by the  NSE Banking Index  that gained  0.7 per cent. Conversely, the NSE  Consumer Goods Index  fell  0.8 per cent. The NSE Oil & Gas Index shed 0.5 per cent, just as the NSE Insurance Index  contracted  0.4 per cent.

The bulls sustained rally on Friday, lifting the index by 0.45 per cent to bring the week -on-week gain to 0.22 per cent.

 

Market Turnover

Meanwhile, value and volume of trading soared last week as investors exchanged 2.243 billion shares worth N139.789 billion in 18,466 deals, up from 1.852 billion shares valued at N51.523 billion that  were traded the previous week  in 23,863 deals.

The Financial Services Industry  led the activity chart with 984.584 million shares valued at N10.588 billion traded in 11,116 deals, thus contributing 43.9 per cent and 7.6 per cent  to the total equity turnover volume and value respectively.

The Industrial Goods Industry followed with 564.804 million shares worth N125.378 billion in 927 deals, while the  third place was occupied by Conglomerates Industry with a turnover of 804.447 million shares worth N561.921 million in 689 deals.

Trading in the top three equities namely – Transnational Corporation of Nigeria Plc, Dangote Cement Plc and Aiico Insurance Plc accounted for 1.335 billion shares worth N125.907 billion in 888 deals.

Also traded during the week were a total of 3,070 units of Exchange Traded Products (ETPs) valued at N455,245.00 executed in eight  deals, compared with a total of 1,120 units valued at N14,179.00 that was transacted  two  weeks in  four  deals. A total of 3,780 units of Federal Government Bonds valued at N3.931 million were traded last week in 17 deals.

Price Gainers and Losers

The price movement chart showed that 35  equities appreciated  higher than 16 of the previous week, while 25 equities depreciated  lower than 46 equities of the previous week.Linkage Assurance Plc led the price gainers with 18.9 per cent, trailed by Livestock Feeds Plc with 11.3 per cent. Seplat Petroleum Development Company Plc chalked up 10.4 per cent, while  Presco Plc and Fidelity Bank Plc garnered 8.8 per cent and 6.2 per cent in that order.

FCMB Group Plc added 5.4 per cent, just as Vitafoam Nigeria Plc, ND Jaiz Bank Plc appreciated by 5.0 per cent each. Berger Paints Nigeria Plc and Red Star Express Plc  gained 4.9 per cent apiece.

Conversely,  Dangote Sugar Refinery Plc led the price losers with 9.4 per cent, trailed by May & Baker Nigeria Plc with 8.3 per cent, while Flour Mills of Nigeria Plc shed 8.3 per cent. NPF Microfinance Bank Plc went down by 7.4 per cent, just as C & I Leasing Plc depreciated by 5.0 per cent.

Other top price losers included: PZ Cussons Nigeria Plc, NCR (Nigeria) Plc, NASCON Allied Industries Plc , Glaxosmithkline Consumers Plc(4.9 per cent) and Total Nigeria Plc (4.7 per cent).