Equities Market Rebounds, Gains 1.05% on Bargain Hunting

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WEEKLY REPORT

The Nigerian equities market rebounded last week as activities of bargain hunters in bellwether stocks lifted the Nigerian Stock Exchange (NSE) All-Share Index (NSE ASI  by 1.05 per cent to close at   41,244.89, while  market capitalsiation rose higher by 1.34 per cent to close at N14.940 trillion.

The market had the previous closed on a bearish note following profit taking. However, investors’ response to first quarter corporate results by some companies and position taking in some bellwether stocks bolstered the performance of the  market last week. The NSE ASI posted its highest weekly gain in 12 weeks.  Although the market recorded three days of decline and two days of positive trading, Friday trading witnessed 1.21 growth to offset three sessions of losses.  Consequently, the market ended the week with 1.05 per cent growth. However, the NSE Premium, NSE AseM, NSE Insurance, and NSE Industrial Goods indices depreciated by 0.92 per cent , 0.82 per cent, 1.57 per cent  and 4.89 per cent in that order. But the NSE Consumer Goods  Index posted the highest growth of 6.3 per cent, followed by the NSE Oil & Gas Index with 3.25 per cent.  The NSE Banking  Index appreciated by 0.67 per cent.

“We look for extension of gains on the bourse, amidst significant drop in fixed income yields, and relatively lower prices of risky assets,” analysts at Cordros Capital Limited said.

 

Daily Performance

The bearish sentiments in the equity market persisted on Monday when trading resumed as the index fell by 0.12 per cent to close at 40,763.93. The slide resulted from decline in the share prices of GT Bank, Dangote Cement, International Breweries, Flour Mills, and Dangote Sugar Refinery Plc among others. Despite the bearish performance, activity level strengthened as volume and value traded appreciated 27.7 and 148.3 to 309.4 million shares and N7.5 billion  respectively. The three most actively traded stocks were Law Union and Rock (220.74 million shares), Zenith Bank (76.67 million shares) and FBN Holdings (24.26 million shares).

Also, in spite of the bearish trading, the NSE Oil & Gas Index and NSE Consumer Goods Index trended northwards rising by 0.6 per cent and 0.3 per cent in that order.

However,   the NSE Industrial Goods Index depreciated the most, shedding 2.7 per cent  due to selloffs in Dangote Cement and Lafarge Africa Plc  The  NSE Banking  Index and NSE Insurance  Index Index shed 0.6 per cent and 0.4 per cent respectively.

The market rebounded on the second day of the week on bargain hunting in bellwether stocks. The index rose by 0.11 per cent   to settle at 40,802.78. Accordingly, investors gained N14 billion to bring the market capitalisation to N14.7 trillion. High demand for the shares of Nestle Nigeria Plc, Zenith Bank Plc, FBN Holdings, Oando, Lafarge Africa,  and Dangote Cement were influenced the rebound.

But volume and value traded dipped 20.3 per cent  and 57.1 per cent  to 246.6 million shares   and N3.2 billion respectively. The top traded stocks by volume were Transcorp (35.4 million shares), Zenith Bank (24.6 million shares) and Caverton (19.6 million shares) just as GTBank (N805.3 million), Zenith Bank (N682.3 million) and Stanbic IBTC  (N263.1 million) were the top traded stocks in terms of value.

In terms of sectoral performance, three of five  sectors tracked closed in the green. The  NSE Oil & Gas Index was the top gainer, up 0.8 per cent. This was followed by  the NSE Consumer Goods Index that  inched 0.7 per cent. In the same vein, the NSE  Banking Index rose  0.5  per cent as investors took positions in Zenith Bank, Access Bank  and UBA. Conversely, the NSE  Industrial Goods Index led laggards shedding 0.4 per cent  as a result of sell offs in Lafarge Africa Plc. The NSE  Insurance Index  went down by 0.4 per cent.

Just as stakeholders were thinking the positive performance recorded on Tuesday would be sustained on Wednesday, the bears returned, dragging the indeed down by 0.11 per cent to close at 40,755.73.

Similarly, investors lost N17.2 billion in capitalisation to close at N14.72 trillion. FBN Holdings, Oando, Lafarge Africa, Zenith Bank and Dangote Cement were mainly responsible for the decline.

 Despite the negative performance, activity level strengthened as volume and value traded rose 42.1 per cent  and 43 per cent  to 350.4 million shares   and N4.6 billion. respectively. The most actively traded sectors in volume terms were: FBN Holdings  (80.1 million shares), UBA (60.0 million shares) and Fidelity Bank  (40.6 million shares).

A further analysis of the day’s performance showed that out of the five sectors tracked,  three sectors closed positively. The NSE Oil & Gas Index appreciated the most, adding  2.3 per cent  as a result of buying interest in Seplat and Forte Oil Plc.  The NSE  Consumer Goods Index trailed, rising 1.7 per cent  a result of  bargain hunting in Nestle. In the same vein,  gains in GTBank and UBA  lifted the  NSE  Banking Index by 0.2 per cent. Conversely,   the NSE Industrial Goods  Index fell by 1.4 per cent while the NSE  Insurance Index closed 0.8 per cent lower.

The market witnessed the return of the bulls on Thursday as the index appreciated by 0.05 per cent to close at   40,777.67, while market capitalisation added N49.5 billion to close higher at N14.8 trillion. Similarly, activity level strengthened as volume and value traded increased 8.0 per cent  and 36 per cent  to 378.2 million shares   and N6.3 billion  respectively. The top traded stocks by volume were GTBank (63.5 million shares), Diamond Bank (59.7 million shares) and FBN Holdings Plc (42.8 million shares.

Market Turnover

Meanwhile, investors traded 1.825 billion shares worth N24.653 billion in 23,148 deals   in contrast to a total of 3.008 billion shares valued at N30.296 billion that exchanged hands in 24,036 deals the previous week. The Financial Services Industry  led the activity chart with 1.360 billion shares valued at N14.642 billion traded in 12,118 deals,  thus contributing 74.51 per cent  and 59.4 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 124.816 million shares worth N6.910 billion in 3,709 deals. The third place was occupied by Oil and Gas Industry with a turnover of 112.479 million shares worth N1.389 billion in 3,429 deals.

Trading in the top three equities, Law Union And Rock Insurance Plc, FBN Holdings Plc,

and Zenith  Bank Plc  accounted for 581.018 million shares worth N7.098 billion in 4,283 deals.

Also traded during the week were a total of 56,260 units of Exchange Traded Products (ETPs)

valued at N376,387.48 executed in six deals, compared with a total of 177,144 units valued at N2.809 million that was transacted the previous week  in six deals.

A total of 725 units of Federal Government Bonds valued at N660,984.55 were traded last  week in 10 deals, compared with a total of 13,735 units valued at N14.128 million transacted two  weeks in 16 deals.

 

Price Gainers and Losers

A look at the price movement chart showed that  33 equities appreciated in price during the week, lower than 36 in the previous week, while 41 equities depreciated in price higher than 33 equities of the previous week. Forte Oil Plc led the price gainers with 20.6 per cent, trailed by Nestle Nigeria Plc with 13.53 per cent. Learn Africa Plc and Veritas Kapital Assurance Plc appreciated by 12.5 per cent and 12 per cent in that order.

Other top price gainers included: Consolidated Hallmark Insurance Plc (10.3 per cent); International Breweries Plc (9.0 per cent); N.E.M Insurance Plc (8.7 per cent); Linkage Assurance Plc (7.5 per cent); WAPIC Insurance Plc (7.5 per cent); and Honeywell Flour Mills Plc (7.0 per cent).

Conversely, Unity Bank Plc led the price losers with 21.2 per cent.  Glaxosmithkline Consumer Nigeria Plc with 20.7 per cent. Jaiz Bank Plc shed 17.4 per cent, just as Mutual Benefits Assurance Plc declined by 17.2 per cent. Other top price losers are: Skye Bank Plc (14.7 per cent); NPF Microfinance Plc (13.3 per cent); Continental Reinsurance Plc (13.3 per cent); Wema Bank Plc (10.6 per cent); Fidson Healthcare Plc (9.6 per cent) and Lafarge Africa Plc (8.6 per cent).