Stock Market Recovers N700bn on Bargain Hunting in Bellwethers

By Goddy Egene

The nation’s equities market recovered significantly last week as investors took advantage of low priced stocks to increase their stakes.

The Nigerian Stock Exchange (NSE) All-Share Index had in the previous week declined by 6.38 per cent to close at 36,816.29, while market capitalisation shed N908.2 billion to close at N13.3 trillion, following sustained massive sell off by some investors.

The four-week bear run had led to high apprehension among some investors and stakeholders, with expectation that the panic button may be pressed.

But relief came last week as the market rebounded, recovering N700 billion in terms of its market capitalisation, which closed at N14.008 trillion.

Similarly, the NSE ASI gained 5.03 per cent to close at 38,669.23. All other indices finished higher with the exception of the NSE Insurance and NSE Oil/Gas Indices that depreciated by 0.61 per cent and 1.34 per cent respectively, while the NSE ASeM Index closed flat.

According to analysts at Meristem Securities Limited, the market gained positive momentum following bargain hunting activities on the heavy weight counters in the market.

“The low prices of the counters in the consumer goods and banking sectors was attractive enough to spur buying pressure in the market,” they added.

Also commenting, analysts at Cordros Capital Limited said: “Relatively lower prices of value stocks, coupled with still-positive macroeconomic fundamentals, will further sustain gains in the equities market.”

 

Daily Performance

The market last Monday recorded its first gain   after losing for 12 day to rise by 0.36 per cent to close at 36,947.10. Although the market recorded 21 gainers and losers apiece, heavy weighted counters such as Guaranty Trust Bank Plc, Zenith Bank Plc  and Nigerian Breweries Plc, FBN Holdings Plc  made the bulls to have an upper hand.

Market analysts at Cordros Capital Limited had envisaged the rebound, saying: “While 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.”

Also, on the first day of the week,  Japaul Oil and Maritime Services Plc  led the 21 stocks with 9.0 per cent.  Custodian and Allied Plc and Eterna Plc that gained 4.9 per cent each. GTBank Plc garnered 4.5 per cent, just as AIICO Insurance Plc, FBN Holdings Plc and FCMB Holdings Plc appreciated by 3.5 per cent, 3.4 per cent and 3.2 per cent in that order.

LASACO Assurance Plc and Nigerian Breweries Plc equally advanced, adding 2.9 per cent apiece.

Conversely, on that day, Oando Plc led the bears, sliding by 8.9 per cent, followed by Cadbury Nigeria Plc with 8.0 per cent. Presco Plc shed 5.0 per cent, while PZ Cussons Nigeria Plc and Sterling Bank Plc went down by 4.8 per cent and 4.6 per cent respectively. Jaiz Bank Plc and Law Union and Rock Insurance Plc got hair cuts of 4.4 per cent each.

But activity level weakened as volume and value traded dipped 39.2 per cent and 2.3 per cent to 314.5 million shares and N7.0 billion respectively compared with the preceding Friday’s figures.

Commenting on the market performance on that day, analysts at Meristem Securities Limited had said: “Positive sentiment prevailed in the equities market following buying pressure on counters which have lost significantly in previous weeks, particularly heavily weighted stocks in the banking sector like GTBank  and Zenith Bank.

“This was enough to offset the impact of continued sell-offs in the consumer goods space.”

However, the positive sentiments were sustained on the second day on continuing bargain hunting in heavy weight counters made the equities market to extend its gain.

 The index jumped   2.5 per cent to close at 37,854.92, while market capitalisation added N328.8 billion to close higher at N13.7 trillion.

Similarly, on the second day, Meristem Securities Limited had explained that the mood in the market was upbeat  as investor appetite showed encouraging signs of improvement.

“Bargain hunting on bellwether stocks such as Dangote Cement, Nigerian Breweries, GTBank drove the positive performance of the market.

“We expect this trend to persist in the days ahead as investors continue to take advantage of the relatively low prices across the sectors,” they had said.

An analysis of the performance for that day had shown that Oando Plc led the price gainers with 9.8 per cent followed by International Breweries Plc that garnered 7.6 per cent. Dangote Sugar Refinery Plc chalked up 6.3 per cent just as  Honeywell  Flour Mills Plc, Okomu Oil Palm Plc and Nigerian Breweries Plc gained 5.0 apiece.

Similarly, Lafarge Africa Plc, Diamond Bank Plc and Fidelity Bank Plc appreciated by 4.9 per cent each, while FCMB Group Plc went up by 4.8 per cent.

Conversely, Consolidated Hallmark Insurance Plc led the price losers with 6.6 per cent, trailed by Royal Exchange Plc with 5.8 per cent.  UAC of Nigeria Plc shed 4.5 per cent, while First Aluminium Nigeria Plc, Total Nigeria Plc and Sovereign Trust Insurance Plc went down by 4.5 per cent, 4.3 per cent and 3.7 per cent in that order.

But activity level was mixed as volume traded rose 8.0 per cent  to 339.7 million shares  while value traded fell  15.2 per cent to N6.0 billion. The top traded stocks by volume were Access Bank  (133.1 million shares), GTBank (39.3 million shares) and UBA  (23.2 million shares) while GTBank (N1.6 billion), Access Bank (N1.4 billion) and Dangote Cement (N911.2 million) were the top traded stocks by value.

Sector performance was mostly bullish as four  of the five  indices  higher. The  NSE Industrial Goods  Index and NSE  Banking Index led with 3.2 per cent apiece.

The NSE Consumer Goods Index followed with  2.7 per cent while the NSE Insurance Index gained  0.2 per cent. On the negative side,   the NSE  Oil & Gas Index emerged the lone loser shedding 0.6 per cent.

The equities market extended its gains on the third day with the index rising 1.5 per cent  to close at 38,435.29.  The  positive performance was largely due to buying interest in Nigerian Breweries Plc, Dangote Cement and Zenith Bank.

Similarly, market capitalisation added N210.2 billion to close at N13.9 trillion. Also, activity level strengthened as the volume and value traded trended 15.7 per cent  and 11.9 per cent higher to 393.1 million shares   and N6.7 billion  respectively. The top traded stocks by volume were Zenith Bank  (110.6 million shares), Fidelity Bank (63.9 million shares) and UBA (22.5 million shares) while Zenith Bank (N3.1 billion), Dangote Cement Plc (N677.5 million) and Seplt Petroleum Development Company Plc  (N549.8 million) led the top traded stocks by value.

The market recorded the fourth consecutive gain last Thursday  appreciating  further by 1.58 per cent to close at 39,042.11, while market capitalisation added N219.8 billion  to close at N14.14 trillion.

Sector performance on that day was also mixed as three  of five   closed bullish .  The NSE  Industrial Goods Index led  the gainers chart for the third consecutive session, up 3.7 per cent. The NSE  Consumer Goods  Index and  NSE Banking Index  trailed, increasing 1.0 per cent and 0.1 per cent  respectively.

 Conversely,  the NSE  Insurance and NSE  Oil & Gas Index shed    0.7 per cent and 0.5 per cent in that order.

 

Market Turnover

Meanwhile, investors traded   1.749 billion shares worth N31.183 billion in 24,604 deals down from 2.699 billion shares valued at N84.775 billion that exchanged hands in 19,715 deals the previous week.

The Financial Services Industry dominated the  activity chart with 1.423 billion shares valued at N19.717 billion traded in 13,950 deals, thus contributing 81.37 per cent and 63.23 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 153.105 million shares worth N6.805 billion in 4,512 deals. The third place was occupied by Conglomerates Industry with a turnover of 60.473 million shares worth N186.600 billion in 905 deals.

Trading in the top three equities namely – Guaranty Trust Bank Plc, Access Bank Plc and Zenith Bank  Plc  accounted for 588.605 million shares worth N16.568 billion in 4,120 deals, contributing 33.65 per cent and 53.14  per cent to the total equity turnover volume and value respectively.

 

Price Gainers and Losers

The price movement chart showed that  49 stocks   appreciated last week  higher than  the 25 of the  previous week, while 29 equities depreciated in price, lower than  48  equities of the previous week.  Japaul Oil led the price gainers with 40.9 per cent, trailed by Prestige Assurance Plc with 39.5 per cent. NASCON Allied Industries Plc c chalked up 17.8 per cent, just as C & I Leasing Plc appreciated by 17.5 per cent.

Dangote Flour Mills Plc and Lafarge Africa Plc and Dangote Sugar Refinery Plc garnered 17.1 per cent, 17 per cent and  14.6  per cent in that order. Other top price gainers include: Fidelity Bank Plc (14.5 per cent); Transnational Corporattion of Nigeria Plc(14.4 per cent) and Nigerian Breweries Plc (13.5 per cent).

Conversely, NPF Microfinance Bank Plc led the price with 14.5 per cent, trailed by Consolidated Hallmark Insurance Plc with 12.9 per cent. First Aluminium Nigeria Plc shed 9.0 per cent, just as LASACO Assurance Plc,  Presco Plc 7.8 per cent and 6.2 per cent respectively.

Other top price losers were: May & Baker Nigeria Plc(5.6 per cent); Mutual Benefits Assurance Plc (5.2 per cent); PZ Cussons Nigeria Plc (5.0 per cent); Guineas Insurance Plc  and Skye Bank Plc(5.0 per cent apiece).