Equities Market Remains Bearish on Continuing Sell Pressure

0

WEEKLY REPORT 

Sell pressure at the stock market persisted last week despite the release of more improved financial results and declaration of dividends by some companies for 2017 financial year.  The market has remained bearish in the past weeks as investors sold to take profit in bellwether stocks.

However, the negative performance was expected to cease once the full year corporate earnings began to come in. Despite the release of improved results with significant returns being recommended, the sell pressure persisted. Having declined by 2.9 per cent the previous week, the   market depressed further last week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell by 1.11 per cent to close at 41,472.10, while market capitalisation ended lower at N14.982 trillion.

 Similarly, all other indices finished lower during the week with the exception of the NSE CG, NSE Banking and NSE Pension Indices that appreciated by 1.07 per cent, 3.31 per cent and 1.67 per cent respectively.

 Daily Performance          

Trading resumed for the week with a decline as the bears remained in control for the fourth consecutive session. As a result, the NSE ASI fell 0.21 per cent to close lower at 41,845.92. Similarly, market capitalisation closed lower at N14.96 trillion.

The depreciation recorded in the share prices of Nigerian Breweries, Ecobank Transnational Incorporated, Flour Mills, Transcorp, and Stanbic IBTC Holdings among others were mainly responsible for the decline.

However, the bears were strongly in control  as 36 stocks depreciated compared with 14 others that appreciated. Cadbury Nigeria Plc led the price losers with 9.6 per cent, trailed by Niger Insurance Plc with 9.5 per cent. Unity Bank Plc shed 8.8 per cent, while FTN Cocoa Processing and LASACO Assurance Plc fell by 7.1 per cent and 5.5 per cent respectively. WAPIC Insurance Plc and Linkage Assurance Plc closed 4.9 per cent and  4.8 per cent lower  in that order.

Other top price losers included: Wema Bank Plc, Dangote Flour Mills Plc, Skye Bank Plc, Ecobank Transnational Incorporated (4.8 per cent apiece); Continental Reinsurance Plc (4.6 per cent); University Press Plc, Tantalizer Plc(4.5 per cent); Japaul Oil & Maritime Services Plc (4.4 per cent).

On the positive side,  C & I Leasing Plc led the price gainers with 9.9 per cent, trailed by United Capital Plc with 5.6 per cent, while N.E.M Insurance Plc (4.8 per cent). Cutix Plc appreciated by 4.4 per cent, just as PZ Cussons Nigeria Plc and African Prudential Plc chalked up 2.3 per cent and 1.5 per cent respectively

Market analysts at Cordros Capital said: “In our view, it is likely investors take advantage of soft prices to hunt bargains in the equities market, leading to a positive outlook in the short term. Also, strengthening macroeconomic fundamentals remain supportive of gains in the medium to long term.”

The market depreciated further on Tuesday as more investors locked in profits, thereby depressing the market by 0.35 per cent to 41,686.36. Market capitalisation decreased by N68.6 billion to be at  N14.8 trillion.

The depreciation recorded in the share prices of GTBank, Lafarge Africa, Flour Mills, Nigerian Breweries, and Seplat contributed to the negative close.

The bearish trend reduced the year-to-date (YTD) growth to 8.5 per cent as at Wednesday. The bearish performance   was largely driven by sell pressures in Nestle, Stanbic IBTC Holdings,   and  Lafarge.   While  the index fell,  market activity improved as volume and value traded inched 22.7 per cent and 44.4 per cent  higher to 488.7 million shares  and N5.6 billion respectively.

African Alliance Insurance Plc  (82.8 million shares), Japaul Oil (75.6 million shares) and Fidelity Bank  (63.9 million shares ) were the top traded stocks by volume while Dangote Cement (N1.1 billion), GTBank (N886.6 million) and Nigerian Breweries (N867.7 million) led the top traded stocks by value.

In terms of sectoral performance, three indices  closed negatively, one ended in the bulls’ territory, while one remained flat. The NSE  Industrial Goods Index led losers with  2.5 per cent, trailed by the NSE  Insurance Index  with 1.9 per cent. The  NSE Consumer Goods Index shed   0.7 per cent.  The  NSE Banking Index was the sole gainer, chalking up  0.1 per cent, while the NSE  Oil & Gas Index stagnated.

The market    recovered after three days of decline on Thursday, rising by  0.33 per cent. According to market analysts,    the market upbeat performance  was due to  the improved investor confidence in the market, driven by earnings releases.

“Today’s gain was largely across the bellwether counters in the market as the NSE-30, which accounts for the most liquid and capitalised counters in the market recorded a gain of 0.45 per cent,” they said.

Sectoral  performance showed that  the five closed in bulls’ territory. The  NSE Insurance Index led with 1.6 per cent, followed by  the NSE  Oil & Gas Index  with a 0.6 per cent appreciation.  The NSE Banking  Index and NSE Industrial Goods Index  rose by 0.5 per cent apiece, while the NSE  Consumer Goods Index added 0.4 per cent.

 

Market Turnover

Meanwhile, a total turnover of 2.328 billion shares worth N28.927 billion in 25,530 deals was recorded  last week  investors on the floor of the exchange in contrast to a total of 2.444 billion shares valued at N36.665 billion that exchanged hands last week in 26,712 deals the previous week.

The Financial Services Industry  led the activity chart with 1.784 billion shares valued at N20.385 billion traded in 16,823 deals, thus contributing 76.6 per cent and 70.5 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 171.111million shares worth N5.404 billion in 4,055 deals. The third place was occupied by Oil and Gas

Industry with a turnover of 124.065million shares worth N296.727 million in 1,607 deals. Trading in the top three equities namely-Zenith Bank Plc, Access Bank Plc and Fidelity Bank Plc accounted for 664.391 million shares worth N10.659 billion in 6,429 deals, contributing 28.54 per cent and 36.8 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 4,165 units of Exchange Traded Products (ETPs) valued at N78,276.06 executed in 15 deals, compared with a total of 1.889 million units valued at N10.512 million that was transacted  the previous week in four deals.

Similarly, a total of 5,152 units of Federal Government Bonds valued at N4.562 million were traded this week in 24 deals, compared with a total of 40,566 units valued at N44.313 million transacted two week ago in 29 deals.

 

Price Gainers and Losers

The price movement chart showed that 33 equities appreciated in price during the week, higher than 25 of the previous week, while 49 equities depreciated in price, lower than 60 equities of the previous week.

Glaxosmithkline Consumer Nigeria Plc led the price gainers with 21.4 per cent, trailed by Fidelity Bank Plc with 17.7 per cent. Diamond Bank Plc garnered  11.9 per cent, just as Zenith Bank Plc and  Transnational Corporation of Nigeria chalked up  9.4 per cent and 8.2 per cent in that order.

Other top price gainers included: Eterna Plc (7.5 per cent); United Capital Plc ( 6.5 per cent); NASCON Allied Industries Plc 5.2 per cent); Northern Nigeria  Flour Mills Plc (5.0 per cent) and C & I Leasing Plc (4.9 per cent).

Conversely, FTN Cocoa Processors Plc and  Unity Kapital Assurance Plc led with 21.43 per cent respectively.  Niger Insurance Plc trailed with  16.6 per cent, just as Multiverse Mining & Exploration Plc went down by 16.0 per cent.

Cadbury Nigeria Plc shed 14.9 per cent , while African Alliance Insurance Plc went down by 14.8 per cent.

Other top price gainers were: UNIC Diversified Holdings Plc (14.2 per cent); MCNichols Plc (14 per cent); Mutual Benefits Assurance Plc (13.6 per cent); Tantalisers Plc (13.6 per cent).