Stock Market Gains Further on Continuing Bargain Hunting

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By Goddy Egene

The equities market extended its gains for the second consecutive week as investors continued their bargain hunting. Having appreciated by 3.9 per cent the previous week, the market recorded another appreciated last week with the Nigerian Stock Exchange (NSE) All-Share Index (ASI) rose by 1.35 per cent to close at 31,426.63, while market capitalisation appreciated by same margin to end the week at  N11.719 trillion respectively.

The growth recorded last week reduced the year-to-date decline of the market to 0.01 per cent, indicating that the market would bounce back to positive territory if the bulls maintain their dominance this week.

 

Also, all other indices finished higher with the exception of the NSE ASeM, NSE Consumer Goods, NSE Oil/Gas, NSE Lotus II and NSE Industrial Goods Indices that depreciated by 0.17 per cent, 0.41 per cent, 1.32 per cent, 0.60 per cent and 2.02 per cent respectively.  However, the NSE Banking Index recorded the highest growth of 7.15 per cent last week,

Although the market ended the week with a gain, analysts at Cordros Capital Limited called for cautious trading.

 “In spite of this week’s rally, our view continues to favour cautious trading pattern in the equities market amidst brewing political jitters ahead 2019 elections, and the absence of a positive market trigger. However, we expect the positive macroeconomic fundamentals to drive recovery in the long-term,” they said.

Daily Performance

The market had opened the week on bearish note as investors took profit after seven days of gains. As a result, the market depreciated on the first day of trading last week. However, a rebound was recorded on Tuesday as the bulls returned to the market. 

The bulls lifted the NSE ASI to close higher at 30,736.88, while market capitalisation added N1.6 billion to close at N11.462 trillion.

Linkage Assurance Plc led the price gainers with 9.8 per cent, trailed by Redstar Express Plc with 9.0 per cent. Nigerian Aviation Handling Company Plc chalked up 8.3 per cent, just as Royal Exchange Plc and Oando Plc garnered 7.4 per cent and 6.8 per cent in that order.

Zenith Bank Plc was among the price gainers as investors positioned for announcement of dividend for the year ended December 31, 2018. The bank last week  said its board of directors had approved the audited financial results.

Conversely, 10 stocks dipped in value led by MCNichols Plc with 9.3 per cent, followed by Sovereign Trust Insurance Plc with 8.3 per cent. Cement Company of Northern Nigeria Plc shed 7.0 per cent, while WAPIC Insurance Plc went down by 4.7 per cent among others.

Meanwhile, activity level fell as volume and value traded declined by 51.0 per cent and 56.0 per cent  to 245 million shares and N2.4 billion. In terms of volume, the most active stocks  were Diamond Bank (71.6 million shares), Access Bank (27.0 million shares) and GTBank (27.0 million shares while the top traded stocks by value were GTBank(N848.0 million), Zenith Bank (N236.0 million) and Seplat (N193.8 million).

 On a sectoral basis, performance was  mixed with two sectors  appreciating while three declined.  The NSE  Oil & Gas Index advanced the most, up 1.7 per cent. The  NSE  Banking Index followed with a rise of  0.8 per cent. On the flip side, the NSE  Industrial Goods Index shed the most, down 2.5 per cent, while  the NSE  Consumer Goods Index  and  NSE Insurance Index  shed ices 0.3 per cent  and 0.4 per cent respectively.

The market nudged 0.46 per cent higher to close at 30,878.56 on as gains by banking stocks sustained the positive performance. Similarly, market capitalisation inched up by N52.8 billion to close at 11.51 trillion. The bulls were in total control of the market as 21 stocks appreciated while 10 declined.   Although First Aluminium Nigeria Plc led the price gainers, banking stocks dominated.  First Aluminium chalked up 9.8 per cent, trailed by Fidelity Bank Plc with 9.5 per cent, while Union Diagnostic and Clinical Services Plc gained 7.6 per cent.

Mutual Benefits Assurance Plc, Sterling Bank Plc and FCMB Group Plc garnered  5.0 per cent, 4.9 per cent and 4.3 per cent in that order. Jaiz Bank Plc, LASACO Assurance Plc, United Capital Plc and Guaranty Trust Bank Plc added 3.7 per cent,3.3 per cent, 2.9 per cent and 2.8 per cent respectively among others.

On the contrary, Resort Savings and Loans Plc led the price losers with 8.3 per cent, trailed by Sovereign  Trust Insurance Plc with 4.5 per cent. UAC of Nigeria Plc and NEM Insurance Plc shed 4.4 per cent apiece.

Commenting on the market performance, analysts at SCM Capital said:”Going forward, our near term outlook for the local bourse remains conservative owing to political concerns ahead of the 2019 electoral cycle and the absence of a positive driver. However, stable macro-economic fundamentals remain supportive of recovery in the long-term.

The  market sustained its bullish performance on Thursday  as  rally by bellwethers boosted the NSE ASI  by 0.36 per cent to close at 30,989.60, while market capitalisation added N43.2 billion to be at N11.6 trillion.

 Learn Africa Plc led the price gainers with 9.9 per cent, followed by Ikeja Hotel Plc with 9.8 per cent. Veritas Kapital Assurance Plc chalked up 9.0 per cent, while AXA Mansard Insurance Plc and  Royal Exchange Plc garnered 7.5 per cent and 6.9 per cent respectively.

Caverton Offshore Support Group Plc was also among the price gainers, chalking up 6.0 per cent, while NPF Microfinance Bank Plc closed 5.3 per cent higher.

Conversely, 20 stocks depreciated led by Medview Airline Plc with 9.7 per cent.  Resort Savings and Loans Plc trailed with 9.0 per cent, while Union Bank of Nigeria Plc and Linkage Assurance Plc went down by 8.8 per cent apiece.

Fidson Healthcare Plc and Mutual Benefits Assurance Plc shed 5.0 per cent and 4.7 per cent in that order among others.

Market Turnover

Investors increased the demand for stocks as they total of 1.807 billion shares worth N17.232 billion in 18,332 deals, up from 1.270 billion shares valued at N13.463 billion that exchanged hands two weeks ago in 16,476 deals. 

 However, the Financial Services Industry led the activity chart with 1.625 billion shares valued at N14.696 billion traded in 11,778 deals, thus contributing 89.93 per cent and 85.28 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 83.560 million shares worth N138.309 million in 951 deals, while the   third place was occupied by the Consumer Goods Industry with a turnover of 36.251 million shares worth N1.002 billion in 2,224 deals. Trading in the top three equities namely, Diamond Bank Plc, Access Bank Plc and Guaranty Trust Bank Plc  accounted for 871.524 million shares worth N8.488 billion in 3,305 deals.

Also traded during the week were a total of 34,341 units of Exchange Traded Products (ETPs) valued at N440,166.37 executed in  seven deals compared with a total of 55 units valued at N5,610.00 that was transacted  the previous  week in two  deals. Similarly, a total of 3,498 units of Federal Government Bonds valued at N3.131 million were traded in 20 deals compared with a total of 3,573 units valued at N3.764 million transacted two weeks in 24 deals

 

Price Gainers and Losers

Meanwhile, 40 equities appreciated in price during the week, higher than 38 in the previous week, while 25 equities depreciated in price, lower than 29 of the previous week.

Fidelity Bank Plc led the price gainers with 24.3 per cent, trailed by Caverton with 22.6 per cent. FCMB Group Plc chalked up 22.1 per cent, just as Access Bank Plc, Royal Exchange Plc and Red Star Express Plc garnered 16.0 per cent, 14.8  per cent and 13.6 per cent in that order.

Other top price gainers included: Wema Bank Plc, First Aluminium Nigeria Plc (12.9 per cent apiece); AIICO Insurance Plc (12.7 per cent) and Linkage Assurance Plc (12.5 per cent).

On the contrary, Resort Savings & Loans Plc led the price losers, shedding 23.0 per cent, trailed by Sovereign Trust Insurance Plc with 19.2 per cent. Medview Airline Plc depreciated by 9.7 per cent, just as MCNichols Plc and Union Bank of Nigeria Plc shed 9.3 per cent and 8.8 per cent.

Other top price losers were: ETranzact International Plc (8.7 per cent); Consolidated Hallmark Insurance Plc (7.8 per cent); Seplat Petroleum Development Plc (6.2 per cent);Fidson Healthcare Plc (5.0 per cent); and Mutual Benefits Assurance Plc (4.7 per cent).