Stock Market Sustains Positive Momentum as Corporate Earnings Trickle In

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By Goddy Egene

 The Nigerian equities market sustained its positive momentum for the second consecutive week as investors responded favourably to third quarter (Q3) corporate earnings released by some listed companies.

The Nigerian Stock Exchange (NSE) All-Share Index (ASI) appreciated 1.19 per cent to close at 32,841.69, while market capitalisation ended higher at N11.99 trillion.

The growth was better than the 0.23 per cent recorded the previous week. With the positive close last week, the month-to-date appreciation stood at 0.23 per cent, while year-to-date decline has moderated to 14.12 per cent.

Three of the five sessions were bullish with trading in Dangote Cement Plc mostly dictating the market direction. During the week, the NSE Insurance and NSE Banking indices closed positive, while the NSE Consumer Goods, NSE Industrial Goods, and NSE Oil & Gas indices ended with losses.

Commenting on the market performance, analysts at Cordros Capital Limited said: “Our outlook  for equities in the short to medium term remain conservative, amidst brewing political concerns, and the absence of a one-off positive trigger. However, stable macroeconomic fundamentals remain supportive of recovery in the long term.”

Daily performance

When trading resumed last Monday, sell pressure in bellwethers such as Nigerian Breweries Plc, Unilever Nigeria Plc, FBN Holdings Plc and Lafarge Africa Plc led to a bearish trading in the first day week. As a result, the NSE ASI fell 0.14 per cent to close at 32,413.00, while market capitalisation shed N15.9 billion to be at N11.8 trillion. According to analysts at Meristem Stockbrokers Limited, “the sentiment in the market was mixed today. Some of the gains in the consumer goods sector were offset by losses on heavily weighted stocks like Nigerian Breweries Plc, Guinness Nigeria Plc , amidst selling pressure on many banking tickers.”

In all, on Monday, a total of 17 stocks declined led by  Fidson Healthcare Plc led the price losers with 10 per cent. WAPIC Insurance Plc trailed with 9.0 per cent, just as UACN Property Development Company Plc followed with 8.0 per cent. Lafarge Africa Plc and Unilever Nigeria Plc shed 6.5 per cent and 5.2 per cent respectively.

On the positive side, AXA Mansard Insurance Plc, led the price gainers with 10 per cent, trailed by Forte Oil Plc with 9.8 per cent. NASCON Allied Industries Plc chalked up 7.5 per cent, while NPF Microfinance Bank Plc and Livestock Feeds Plc chalked up 5.8 per cent and 5.2 per cent in that order.

Meanwhile, activity level waned as volume and value traded fell 43.7 per cent and 57.1 per cent to 91.4 million shares units and N960.9 million respectively. The top traded stocks by volume were UBA (14.6 million shares), FCMB Group Plc (11.9 million shares) and Fidelity Bank Plc (6.9 million shares) while GTBank (N216.9 million), Guinness Nigeria (N143.8 million) and International Breweries Plc (N130.3 million) led by value.

However, performance across sectors was positive as three of five   indices closed in the green. The NSE Insurance Index and NSE Oil & Gas Index indices rose 1.4 per cent and 0.9 per cent respectively following buying interest in AXA Mansard, Forte Oil Plc and OANDO Plc. Similarly, price appreciation in GTBank and Zenith Bank   drove the NSE Banking Index 0.7 per cent higher. On the flip side, the NSE Industrial Index and NSE Consumer Goods Index indices declined, shedding 1.9 per cent and 0.7 per cent respectively.

The market rebounded on Tuesday as recovery in share prices of bellwether tickers lifted the NSE ASI by 0.95 per cent to close at 32,722.18.  Notably, gains by Dangote Cement Plc, Nigerian Breweries Plc, Unilever Nigeria Plc and Zenith Bank Plc propelled the positive close.

Also, the volume of trading soared by 624 per cent   as investors traded 662.021 million valued at N5.312 billion, up from 91.4 million shares worth N960.9 million the first day of the week.

According market operators, there were further selloffs on banking tickers as investors continued to book profit.

“These was however offset by the recovery by the heavily weighted stocks in the consumer goods sector and Dangote Cement, which gained 2.50 per cent,” they said.

However, UACN Property Development Plc led the price gainers with 9.9 per cent, trailed by Cutix Plc with 9.7 per cent. Unilever Nigeria Plc and FBN Holdings Plc garnered 5.5 per cent and 3.3 per cent apiece. Cadbury Nigeria Plc, Nigerian Breweries Plc and Dangote Cement Plc chalked up 3.1 per cent, 3.1 per cent and 2.5 per cent in that order.

Conversely, Beta Glass Plc led the bears, shedding 10 per cent, trailed by Julius Berger Nigeria Plc with 9.8 per cent. Niger Insurance Plc shed 9.0 per cent, just as Japaul Oil & Maritime Services Plc and Universal Insurance Plc went down by 8.7 per cent each.

An analysis of the activity chart showed that GTBank recorded the highest trading in volume terms with 41.8 million shares, followed by Fidelity Bank Plc (20.3 million shares0 and Zenith Bank Plc (17.3 million shares), while Seplat (N2.2 billion), GTBank (N1.5 billion) and Dangote Cement (N0.4 billion) led in value terms.

Meanwhile, three out of five sectors closed positively, led by the NSE Consumer Goods Index with 1.2 per cent. This followed buying interest in Nigerian Breweries Plc and Unilever Nigeria Plc.  Similarly, price appreciation in Dangote Cement Plc, Zenith Bank Plc, UBA and Union Bank of Nigeria Plc drove the NSE Industrial Goods Index and NSE Banking Index by 0.2 per cent and 0.1 per cent higher respectively.

 Conversely, the NSE Oil & Gas Index and NSE Insurance Index   declined 1.3 per cent and 0.5 per cent respectively.

Again, the market shed weight on Wednesday as investors booked profit in Dangote Cement Plc, Zenith Bank Plc and Nigerian Breweries Plc among others. Consequently, the NSE ASI declined 0.87 per cent to close at 32, 437.35, while market capitalisation settled at N11.8 trillion. Activity level moved in tandem with the broader index, as volume and value traded fell 63.3 per cent and 31.1 per cent to 240.8 million shares   and N3.7 billion respectively.

However, buy interest in Dangote Cement Plc led to a recovery in the market on Thursday as it gained 0.70 per cent to close at 32,664.63. Ex-Dangote Cement, the market would have closed in the bear’s territory on that day. The bulls maintained their control of the market on Friday to close the week with a gain of 1.19 per cent.

Market Turnover

Meanwhile, market turnover improved significantly as investors traded 1.380 billion shares worth N15.149 billion in 13,478 deals, up from 915.856 million shares valued at N9.835 billion that exchanged hands the previous week in 14,033 deals.

The Financial Services Industry led the activity chart with 1.237 billion shares valued at N9.725 billion traded in 7,404 deals, thus contributing 89.62 per cent and 64.19 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 62.505 million shares worth N1.689 billion in 2,560 deals. The third place was Oil and Gas Industry with a turnover of 26.341 million shares worth 2.447 billion in 1,213 deals.

Trading in the top three equities namely – Sunu Assurances Nigeria Plc, Zenith Bank Plc and Guaranty Trust Bank Plc accounted for 772.902 million shares worth N7.841 billion in 2,050 deals, contributing 55.99 per cent and 51.76 per cent to the total equity turnover volume and value respectively.

Price Gainers and Losers

Meanwhile, 20 equities appreciated in price last week, lower than 29 in the previous week, while 42 equities depreciated in price, higher than 40 of the previous week. Prestige Assurance Plc led the price gainers with 12 per cent, trailed by AXA Mansard Plc with 10 per cent. The Initiates Plc followed with 8.9 per cent, while Continental Reinsurance Plc appreciated by 6.6 per cent. African Prudential Plc and Dangote Cement Plc chalked up 5.0 per cent each.

Other top price gainers included: Access Bank Plc, Champion Breweries Plc (3.7 per cent apiece). Cadbury   Nigeria Plc and Zenith Bank Plc (3.1 per cent each).

Conversely, Cutix Plc led the price losers with 42.8 per cent, trailed by Niger Insurance Plc with 15.1 per cent. Universal Insurance Plc and Japaul Oil & Gas Plc shed 13.0 per cent and 12.5 per cent respectively.

Other top price losers were:  Sovereign Trust Insurance Plc (12.5 per cent); Pharma Deko Plc (11.5 per cent); Beta Glass Plc, Fidson Healthcare Plc(10 per  cent each); Julius Berger Nigeria Plc (9.8 per cent0 and C & I Leasing Plc (9.6 per cent).