Nigerian Equities Shed 2.5% as Investors Book in Profits

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By Goddy Egene

The Nigerian stock market ended last week with a decline of  2.5 per cent  as investors locked in profits recorded the previous weeks.  The market had made an unexpected recovery, recording gains in two consecutive weeks. However, realising the high level of gains so recorded, some investors moved to take profit last week.  This development led a decline of 2.5 per cent in the Nigerian Stock Exchange (NSE) All-Share Index to close at 30,636.36, while market capitalisation shed N294.7 billion to be at N11.424 trillion.

Similarly, all other indices finished lower with the exception of the NSE Oil/Gas Index that rose by 0.05 per cent. The industrial Goods index declined the most, going down by  3.7 per cent. The NSE Consumer Goods Index trailed with 3.4 per cent, while the NSE Banking Index dipped by 2.5 per cent. The NSE Insurance Index shed 2.2 per cent.

But while the Nigerian market declined last week, advanced markets rallied following the Federal Open Market Committee’s (FOMC’s) decision to hold the Fed Funds rate in the target range of 2.25 per cent  2.50 per cent, while also guiding to a slower pace of policy normalisation. The FOMC noted that it would be patient and that decisions to further hike rates would be data dependent, although this is contrary to indicators which show higher productivity, rebounding investment and surging growth.

Also, markets were supported by fresh optimism given the resumption of United States(US). – China trade talks, as both cited substantial progress in two days of high-level talks.

As a result, the performance in developed markets was largely bullish. In the US markets, the S&P 500 and the NASDAQ closed the week higher, up 1.5 per cent and 1.6 per cent respectively, while UK FTSE rose 2.3 per cent. In the same vein,   France’s CAC 40,  Hong Kong’s Hang Seng (1.3% W-o-W) and Japan’s Nikkei 225  (0.1% W-o-W) advanced by 1.5 per cent, 1.3 per cent and 0.1 per cent in that order.

Across the BRICS countries markets, performances were generally positive as four of the five  indexes trended northwards. Russia’s RTS index recorded the largest gain of  1.7 per cent  followed by India’s BSE Sens, China’s Shanghai Composite, and South Africa’s FTSE/JSE All Share indexes which added  1.5 per cent,  0.6 per cent and 0.2 per cent in that order. Conversely, Brazil’s Ibovespa fell by 0.3 per cent.

In Africa, performance was mixed as three of the six markets tracked   recorded gains.

 Egypt’s EGX30 recorded the largest gain, up 4.6 per cent, followed by Kenya’s NSE-20 that appreciated by 1.7 per cent.  Morocco’s Casablanca MASI garnered 0.4 per cent. On the flip side, the largest loss was recorded by Nigeria’s All-Share Index, Ghana’s GSE Composite and the Mauritius SEMDEX index trailed, falling by 0.4 per cent and 0.2 per cent respectively.

 In Asia and the Middle East, performances were largely bearish as all five  markets recorded losses. Turkey’s BIST 100 index declined the most by 2.2 per cent W-o-W, trailed by Saudi Arabia’s Tadawul ASI, which shed 1.5 per cent.  Thailand’s SET index went down by 1.3 per cent, just as  the  UAE’s ADX General Index and Qatar’s DSM 20 index declined by 0.5 per cent and 0.6 per cent respectively.

Market Turnover

A total turnover of 1.452 billion shares worth N14.788 billion in 19,318 deals were traded   by investors in contrast to a total of 1.807 billion shares valued at N17.232 billion that exchanged hands the previous week in 18,332 deals.

The Financial Services Industry led the activity chart with 1.204 billion shares valued at N10.500 billion traded in 12,671 deals, thus contributing 82.95 per cent and 71 per cent  to the total  equity turnover volume and value respectively.

The Conglomerates Industry followed with 93.206 million shares worth N138.014 million in 916 deals. The third place was Consumer Goods Industry with a turnover of 71.404 million shares worth N3.170 billion in 2,698 deals.

Trading in the top three equities namely, United Bank for Africa Plc, Zenith Bank Plc and Consolidated Hallmark Insurance Plc accounted for 447.620 million shares worth N4.453 billion in 3,193 deals, contributing 30.83 per cent and 30.11 per cent to the total equity turnover volume and value respectively.

Also, traded during the week were a total of 668 units of Exchange Traded Products (ETPs) valued at N58,897.50 executed in 21 deals compared with a total of 34,341 units valued at N440,166.37 that was transacted two weeks ago in seven deals.

A total of 4,336 units of Federal Government Bonds valued at N4.308 million were traded this week in 26 deals compared with a total of 3,498 units valued at N3.131 million transacted the previous week in 20 deals.

Price Gainers and Losers

Meanwhile, 16 equities appreciated in price during the week, lower than 40 in the previous week, while 50 equities depreciated in price, higher than 25 of the previous week.

ABC Transport Plc led the price gainers with 24.1 per cent, trailed by Mutual Benefits Assurance Plc with 10 per cent.  Beta Glass Plc appreciated by 9.1 per cent, just as Sterling Bank Plc and UACN Property Development Company Plc chalked up 8.2 per cent.

Vitafoam Nigeria Plc closed the week 6.6 per cent higher. The company recently unveiled   eight new products in order expand its revenue base, enhance customers’ healthy living and boost shareholder value. 

According to the Group Managing Director/Chief Executive Officer, Vitafoam Nigeria Plc, Mr. Taiwo Adeniyi, the new products were launched in line with the company’s culture of innovativeness.

Adeniyi noted that product differentiation had become one of the hallmarks of Vitafoam group which makes it difficult for anyone to clone the company’s unique products.

UAC of Nigeria Plc also closed among the price gainers in the review week, garnering  6.3 per cent. Other top price gainers included: Champion Breweries Plc (5.8 per cent); Total Nigeria Plc (4.1 per cent) and University Press Plc

Conversely, Consolidated Hallmark Insurance Plc led the price losers with 17.1 per cent, trailed by Niger Insurance Plc with 15.3 per cent. Dangote Flour Mills Plc and Ikeja Hotel Plc went down by 10.7 per cent respectively.

Academy Press Plc and AIICO Insurance Plc shed 10 per cent and 9.8 per cent in that order.

Newrest ASL Nigeria Plc and Berger Paints Nigeria Plc depreciated by 9.7 per cent and 9.6 per cent respectively, just as First Aluminium Nigeria Plc shed 8.5 per cent.