All-Share Index Declines 2.7% on Profit-taking

By Goddy Egene

The bears returned to the equities market last week to halt a two-week positive performance, thereby driving the market back into the negative territory for the second time this year.

The market had about three weeks ago suffered a year-to-date (YTD) decline for the first time this year after a sustained profiting taking in heavy weight counters. However, a round of bargain hunting that followed pulled the market back into the positive territory, a performance that lasted for two weeks.

But in the week that President Muhamadu Buhari signed the  2018  Appropriation Bill into law, the Nigerian Stock Exchange (NSE) All-Share Index declined 2.74 per cent to close lower at 37,862.53.

Similarly, market capitalisation went down by same margin to close at N13.716 trillion. By the close of trading last Friday, the NSE ASI had recorded  a year-to-date decline of 1.00 per cent.

According to market operators, investors ignored the impact of the budget and intensified the sell pressure on bellwether stocks.

“The mood in the market was, however, bearish given the sell-offs across many counters in the market. The market performance was dragged particularly by losses recorded on the heavily weighted tickers in the industrial goods and oil and gas sectors, as the passage of the expansionary budget failed to impact investor sentiment positively,” analysts at Meristem Securities Limited said.

The market was highly bearish as  all  indices finished lower with the exception of the NSE Insurance Index that appreciated by 3.55 per cent, while the NSE ASeM Index closed flat.

Daily Performance

Losses in the financial services sector made the market to open the week on bearish note as the NSE ASI fell by 0.7 per cent to close at 38,669.43. After gaining for two weeks, on account of profit-taking, investors swooped on the market, hence the negative close.

In the banking sector, stocks such as Zenith Bank Plc, Guaranty Trust Bank Plc and United Bank for Africa Plc declined on the first day of the week.

Ironically, the banking stocks also closed the most traded led by UBA (123.0 million), Zenith Bank Plc (35.8 million shares) and Access Bank  (34.8 million shares). In value terms, UBA led with N1.3 billion, followed by GTBank (N927.1 million) and Zenith Bank (N919.9 million).

Sectorally, on the first trading session of the week, the NSE Banking Index  recorded the highest decline of 2.3 per cent, trailed by the NSE Insurance Index with 0.6 per cent. The NSE  Oil & Gas Index and  NSE  Industrial Goods  Index shed 0.4 per cent apiece.

The only gainer for the day was  the NSE  Consumer Goods Index  that garnered 0.1 per cent following bargain hunting in International Breweries Plc and Nigerian Breweries Plc.

Although the  banking sector rebounded, the market still closed lower on Wednesday, as it shed 0.2 per cent to bring the NSE ASI to 38,605.07. Similarly, market capitalisation shed N16.2 billion to close at N13.9 trillion.

Profit taking in bellwether counters such as Seplat Petroleum Development Company Plc and  Nigerian Breweries Plc propelled the decline.  In  the same vein,  activity level weakened as volume and value traded fell 31.4 per cent  and 37.4 per cent  to 267.8 million shares  and N3.8 billion  respectively. The most active stocks by volume were:Zenith Bank Plc  (44.8 million), FBN Holdings Plc (38.7 million) and Access Bank (25.8 million)while  Zenith Bank Plc (N1.1 billion), GTBank (N494.3 million) and Nestle Nigeria (N414.8 million) were the top traded stocks by value.

Across sectors, performance was mixed as two of five  indices  closed in the green. The  NSE Insurance  Index led with 1.4 per cent, trailed by the NSE Banking Index that advanced by 0.2 per cent.

On the positive  side,  on Wednesday, the NSE  Oil & Gas Index was the worst performer, as it shed 2.6 per cent down 2.6 per cent, just as   the  NSE Consumer Index  and NSE  Industrial Goods Index fell by 0.3 per cent and 0.2 per cent in that order.

The market extended losses on Thursday with the index declining by 1.17 per cent to close at 38,152.60, thereby bringing the year-to-date the negative territory after staying positive for two weeks. Profit taking in bellwethers – Dangote Cement Plc, Seplat Petroleum Development Company Plc and GTBank  impacted the  performance.

However, activity level increased as volume and value traded advanced 1.4 per cent and 7.2 per cent to 271.4 million shares  and N4.1 billion  respectively. The top traded stocks by volume were FBN Holdings Plc  (37.3 million shares), Fidelity Bank Plc (29.5 million shares) and GTBank(28.4 million shares ) while GTBank (N1.2 billion), Dangote Cement Plc (N492.8 million) and Nigerian Breweries Plc (N466.5 million) were the top traded stocks by value.

A further analysis of the performance showed that three   of five  indices trended southwards. The NSE Oil & Gas Index led the decliners  with 2.4 per cent, trailed by   the  NSE Banking  Index and  NSE Industrial Goods Index   with 0.5 per cent each.

On the bulls’ side, the NSE Insurance  Index appreciated by 1.5 per cent followed by the  NSE Consumer Goods  Index garnered 0.5 per cent.

Market Turnover

Again, it was another four-day trading session last week as the federal government had declared Friday June 15,  and Monday June 18,  2018, as public holidays to commemorate the Eid-al-Fitr celebrations.

Hence, volume and value of trading fell to   1.097 billion shares worth N15.471 billion traded in 16,288 deals, compared with 1.738 billion shares valued at N18.462 billion that exchanged hands in 14,790 deals the preceding week.

 However, the Financial Services Industry (measured by volume) led the activity chart with 816.547 million shares valued at N9.425 billion traded in 9,263 deals, thus contributing 74.4 per cent and 60.9 per cent to the total equity turnover volume and value respectively.

The Consumer Goods Industry followed with 76.361 million shares worth N2.992 billion in 2,545 deals. The third place was occupied by Oil and Gas Industry with a turnover of 51.600 million shares worth N594.590 million in 1,744 deals.

Trading in the top three equities namely – United Bank for Africa Plc, Zenith  Bank Plc and FBN Holdings Plc  accounted for 325.580 million shares worth N4.854 billion in 3,381 deals.

 Also traded during the week were a total of 61 units of Exchange Traded Products (ETPs) valued at N899.80 executed in seven deals, compared with a total of 62,392 units valued at N1.004 million that was transacted the previous week  in 13 deals.

A total of 370 units of federal government valued at N371,261.96 were traded last  week in three  deals, compared with a total of 9,850 units valued at N9.999 million transacted in 10 deals   two weeks ago.

Price Gainers and Losers

A look at the price movement chart showed that 44 equities depreciated  in price, higher than 28 equities of the previous week, while  25 equities appreciated in price during the week, lower than 40 in the previous week.

Honeywell Flour Mills Plc led the price losers, falling 16.1 per cent trailed by LASACO Assurance Plc with  decline of 10.5 per cent. Cement Company of Northern Nigeria Plc  shed  10.0 per cent, just as Seplat, Skye Bank Plc and Livestock  Feeds Plc depreciated by 9.2 per cent apiece.

Other top price losers included: Forte Oil Plc (7.8 per cent); Unilever Nigeria Plc (7.7 per cent); Conoil Plc (6.2 per cent); Veritas Kapital Assurance Plc (6.1 per cent).

On the positive side, Japaul Oil & Maritime Services Plc led with 23.6 per cent, trailed by C & I Leasing Plc with 14.4 per cent. N.E. M Insurance Plc and Mutual Benefits Assurance Plc chalked up 14.2 per cent and 12.9 per cent respectively.

Other top price advancers included: Sovereign Trust Insurance Plc (10.7 per cent); Ikeja Hotels Plc (9.8 per cent); Eterna Plc (7.1 per cent); International Breweries Plc (6.5 per cent); AXA Mansard Insurance Plc( 5.3 per cent) and  Law Union nd Rock Insurance Plc(4.8 per cent).