By Goddy EgeneÂ
Investors in the nationâ€™s equities market will not forget last week in a hurry as it was a week that their investments suffered the heaviest value erosion in recent times. Although the market has remained bearish for three consecutive weeks,Â Â Â investors lost N908.2 billion last week as the market capitalisation fell from N14.2 trillion to N13.3 trillion.
Similarly, the Nigerian Stock Exchange (NSE) All-Share Index declined by 6.38 per cent to close lower at 36,816.29. During the week, the index fell below the 40,000 points market for the first time since JanuaryÂ and a six month low, a development that pushed the market into the negative territory year-to-date(YTD).Â Â Â However, theÂ performance wasÂ largely in line with the trend across emerging market equity indices as foreign investors continue to exit these markets.
The Nigerian market is expected to remainÂ bearish for sometime as more investors are projectedÂ Â to exit dueÂ Â the uncertainties surrounding the upcoming elections.
“The Nigerian economy responds to politics like many economies and I think anyone who knows how the affairs of the world is run will expect this as some of the people cashing out or taking profit are preparing to fund the election as they need to raise money,â€ Minister of Power, Works and Housing, Mr. BabatundeÂ Â Fashola said last Friday at the NSE â€“ London Stock Exchange (LSE) Dual Listing Conference in Lagos.
But in the opinion of analysts at CordrosÂ Â Capital Limited, â€œwhile acknowledging potential bargain hunting in the short term, in what follows relatively lower stock prices, we guide investors to trade cautiously and focus primarily on fundamentally sound stocks.â€
The market opened for the week with further decline as the index dropped by 0.75 per centÂ Â Â to close at 39,028.51. The depreciation in the share prices of Lafarge Africa, FBN Holdings, Transcorp, UBA andÂ Zenith Bank influenced the decline. Also, activity level softened as volume and value traded declined 24.9 per cent and 44.8 per cent to 222.3 million sharesÂ Â and N1.6 billion respectively. The top traded stocks by volume were AIICO Insurance Plc (40.8 million shares), Access Bank (27.4 million shares) and FBN Holdings Plc (26.5 million shares) while the top traded stocks by value were Access Bank (N292.1 million), FBN HoldingsÂ Â (N245.6 million) and Zenith Bank Plc (N238.3 million).
In line with market bearish performance all five indices trackedÂ closed lower. TheÂ NSE Industrial Goods Index ledÂ the laggards withÂ Â 2.1 per cent followed by theÂ Â NSE Banking Index with 2.0 per cent.Â Â Similarly, the NSE Insurance IndexÂ Â Â shed 1.1 per cent, while the NSEÂ Consumer Goods Index went down by 0.1 per cent. The NSE the Oil & Gas Index fell 0.02 per cent.
The market sank deeper on WednesdayÂ with the capitalisationÂ falling to a new low of N13.984 trillionÂ Â as bellwether stocksÂ Â Â continued to tank. Bellwethers such as Dangpote Cement Plc, Nestle Nigeria Plc, Zenith Bank Plc, Nigerian Breweries dragged the market further down.
A total of 25 stocks depreciated, dominated by highly capitalisedÂ counters, while 23 stocks advanced led mostly by low-priced counters.Â Ikeja Hotel Plc led the price losers as investors locked inÂ Â gains from its recent rally following the lifting of suspension on trading of theÂ Â Â stock by the NSEÂ Â last week. The high demand that welcomed the lifting of the suspension after 18 months boostedÂ the stock by over 45 per cent. However, profit taking has set in, giving the stock a haircut of 7.0 per cent to close at N2.51 yesterday.
A.G Leventis Nigeria Plc trailed as the second highest price loser, shedding 6.7 per cent, while Glaxosmithkline Consumers Nigeria Plc, Lafarge Africa Plc and International Breweries PlcÂ Â dipped by 4.9 per cent apiece. Sterling Bank Plc, Japaul Oil and Gas Plc went down by 4.5 per cent each, just as Nigerian Breweries Plc lost 4.3 per cent among others.
On the positive side, Consolidated Hallmark Insurance Plc led the bulls with 6.2 per cent, trailed by FCMB Group Plc with a gain of 5.0 per cent. Flour Mills of Nigeria Plc chalked up 4.9 per cent, while Fidson Healthcare Plc closed 4.8 per cent higher.
Other top price gainers included: Dangote Flour Mills Plc (4.6 per cent); Learn Africa Plc (4.5 per cent), Skye Bank Plc (4.4 per cent);Â Â Wema Bank Plc (4.2 per cent) and WAPIC Insurance Plc (4.1 per cent). However, activity level strengthened as volume and value traded rose by 53.9 per cent and 188.5 per cent to 342.0 million sharesÂ Â Â and N4.7 billion.
The market finally slipped into the negative territory on ThursdayÂ Â after 11 days of sustained dominance by the bears. The selloffs, mostly in bellwether stocks,Â Â pulled the indexÂ Â 1.29 per centÂ Â lower to close at 38,104.54, while market capitalisation endedÂ Â at N13.803 trillion. The marketÂ Â Â consequently, entered into negative territory with a year-to-date (YTD) decline of 0.31 per cent.
Although, the market gained 8.5 per cent in first quarter (Q1), the bears took control since the beginning of the second quarter as investors reviewed their positions in many oversold stocks.
As a result, the months of April and May posted negative performance, with May recordingÂ Â the steepest fall of 7.6 per cent, thereby pushing the market into negative zone yesterday.
According to analysts at Meristem Securities Limited, the month of May has been on a bearish run, with the YTD return slipping into the negative region at the end of the month.
â€œProfit taking activities on bellwether counters in the consumer goods, banking and industrial goods spaces drove the market down today. This week, the market is on a path to a negative close, given the losses recorded so far on all trading days of the week,â€ they said.
Also commenting, analysts at Cordros Capital LimitedÂ Â (CCL) said continued selloffs call for cautious trading among investors in the short term.
â€œHowever, falling prices make room for bargain hunting in value stocks, as still-strengthened macroeconomic fundamentals remain supportive of gains in the medium to long term,â€ they said.
Although it was a four-day trading week,Â Â Â the volume and value of transactions in the week under review increased due to a boost from Stanbic IBTC Holdings Plc.Â Â The Federal Government of Nigeria declaredÂ Â last TuesdayÂ Â 2018, a public holiday to mark the Democracy Day celebration.
However,Â Â investors tradedÂ Â 2.699 billion shares worth N84.775 billion in 19,715 deals last weekÂ Â up fromÂ Â 1.372 billion shares valued at N16.022 billion that exchanged hands last week in 21,099 deals.
The Financial Services IndustryÂ Â led the activity chart with 2.451 billion shares valued at N78.417 billion traded in 11,403 deals; thus contributing 90.84Â Â Â per cent and 92.50 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 76.845 million shares worth N126.358 million in 835 deals. The third place was occupied by Consumer Goods Industry with a turnover of 64.437 million shares worth N4.427 billion in 3,491 deals.
Trading in the top three equities namely â€“ Stanbic IBTC Holdings Plc, Access Bank Plc and Zenith BankÂ Â PlcÂ Â accounted for 1.626 billion shares worth N70.285 billion in 2,882 deals.
Price Gainers and Losers
A look at the price movement table showed that 48 equities depreciated in price, lower than 61 equities of the previous week while 25 equities appreciated in priceÂ Â higher than 14Â Â in the previous week.Â Â International Breweries Plc led the price losers with 22.3 per cent, trailed by Lafarge Africa Plc with 16 per cent. Forte Oil Plc shed 13.6 per cent, just as Nigerian Breweries Plc and Nestle Nigeria Plc went down by 10.7 per cent and 10.6 per cent apiece.
Other top price losers included: A.G Leventis Nigeria Plc (10.1 per cent); Caverton Offshore Support Group Plc (9.7 per cent); Union Bank of Nigeria Plc (9.0 per cent); Veritas Kapital Assurance Plc (8.8 per cent) and Union Diagnostic & Clinical Services Plc (8.7 per cent).
On the other hand, Eterna Plc led the price gainers with 20.1 per cent, followed by: Cement Company of Northern Nigeria Plc (16.4 per cent); Mutual Benefits Assurance Plc (8.5 per cent); Jaiz Bank Plc (6.3 per cent); Dangote Sugar Refinery Plc (5.7 per cent); Flour Mills of Nigeria Plc (5.4 per cent); Unilever Nigeria Plc (5.0 per cent); First Aluminium Nigeria Plc (4.7 per cent); Fidelity Bank Plc (4.7 per cent) and FBN Holdings Plc (4.6 per cent).Ã…