Stock Market Remains Bearish as Investors await Ministerial List, Corporate Results

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Goddy Egene

 The stock market extended its losing streak to the second week of July as investors’ sentiments remained weak. The market which opened the month of July with a loss the previous week, declined further last week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) depreciated by 2.41 per cent to close at 28,566.79, while market capitalisation rose to closed at N13.922 trillion, due to the listing of Airtel Africa Plc.

However, the listing of Airtel Africa Plc at the start of the week, demand for stocks was low as most investors adopted wait-and-see attitude. Market operators said while some investors are waiting for the ministers President Muhammadu Buhari will appoint to run the economy, others are waiting for the financial results of listed companies for the half year ended June 30, 2019. Year-to-date, the market has declined by 9.1 per cent.

A look at the market performance showed that it started on a positive note on Monday gaining 0.70 per cent and 0.10 per cent on Tuesday following buying interest in the newly listed Airtel Africa Plc lifted the market. However, the market reversed gains on Wednesday and Thursday, shedding 0.20 per cent and 1.9 per cent   respectively. Also, the market closed 0.51 per cent lower on Friday.

In terms of sectoral performance, only one of the five sectors tracked appreciated. The NSE Consumer Goods Index led the price losers, shedding 5.0 per cent. The NSE Industrial Goods Index followed with 4.3 per cent fall, while the NSE Oil & Gas Index went down by 3.1 per cent. The NSE Insurance Index lost 2.4 per cent. The only gainer was the NSE Banking Index that appreciated 0.8 per cent.

The major event in the market last week was the listing of Airtel Africa Plc. A total of 3,758,151,504 ordinary shares of Airtel Africa Plc  were listed at  N363 per ordinary share on the main board of  the exchange. 

Commenting on the listing, Chief Executive Officer, NSE, Mr. Oscar Onyema commended Airtel Africa Plc for taking the bold step to list on the exchange. 

“Listing on the exchange reaffirms Airtel Africa’s long-term commitment to expanding opportunities and providing everyday services to Africans and Nigerians in particular. It also indicates the firm’s belief that our platform, which has a total market capitalization of N25.20 trillion across various asset classes, remains a veritable avenue for raising capital and enabling sustainable national growth.  This listing serves to deepen the telecoms and technology sector for investors and provides an opportunity for a wider group of Nigerians to be part of the African telecoms growth story,” he said.

 According to him, the listing is a promising development in Africa with Airtel Africa being the second company to have its ordinary shares listed on both the LSE and NSE.  

“This gives credence to the successful partnership between the two exchanges. I encourage similar situated companies to explore the different opportunities for raising capital on the Exchange’s platform,” Onyema.  

 In his comments, the Chief Executive Officer of Airtel Africa, Raghunath Mandava, said:“Airtel Africa is delighted to be listed on the main board of the exchange. This is an exciting time for Airtel Africa in the 14 countries it operates in and an important milestone in our development as a leading provider of telecommunications and mobile money services in Africa.”

Also speaking,  the Chief Executive Officer and Managing Director of Airtel Nigeria, Segun Ogunsanya, said: “Nigeria is a great place for business and Airtel Africa remains committed to building a leadership position here.  Investors have been interested to hear our story, and importantly they have been interested enough to invest in our business and are now ready to share the future with us.”

 Market turnover

Meanwhile, investors traded 988.491 million shares worth N13.839 billion in 16,414 deals last week by investors at the stock market compared with a total of 1.025 billion shares valued at N9.911 billion that exchanged hands last week in 19,375 deals.   The Financial Services industry led the activity chart with 769.350 million shares valued at N7.238 billion traded in 8,530 deals, thus contributing 77.83 per cent and 52.30 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 55.223 million shares worth N92.483 million in 719 deals. The third place was ICT Industry with a turnover of 42.080 million shares worth N4.144 billion in 839 deals.    Trading in the top three equities namely, Zenith Bank Plc, FBN Holdings Plc and Wapic Insurance Plc   accounted for 348.839 million shares worth N3.520 billion in 2,703 deals, contributing 35.29 per cent and 25.44 per cent to the total equity turnover volume and value respectively.

Also, a total of 1,115 units valued at N165,837 were traded last  week in  three  deals compared with a total of 12,375 units valued at N6.223 million that was transacted  the previous  week in  eight  deals.

Equally, a total of 756 units of Federal Government Bonds valued at N730,454.35 were traded last  week in seven deals compared with a total of 1.007 million units valued at N1.024 billion transacted  the previous  week in 14 deals.

Price gainers and losers

On the price movement chart, 18 equities appreciated in price during the week, lower than 21  in the previous week, while 39 equities depreciated in price, lower 44 equities in the previous week.

Sovereign Trust Insurance Plc led the price gainers with 9.5 per cent, trailed by Union Bank of Nigeria Plc, while Cadbury Nigeria Plc chalked up 8.6 per cent. Flour Mills of Nigeria Plc, just as Cutix Plc  appreciated by 7.1 per cent. Learn Africa Plc and NEM Insurance Plc garnered 6.1 per cent and 5.5 per cent in that order.  Redstar Express Plc, Unity Bank Plc and NPF Microfinance Bank Plc rose by 5.1 per cent, 4.8 per cent and 4.6 per cent in that order.

Conversely, Forte Oil Plc led the price losers with 23 per cent trailed by Glaxosmithkline Consumer Nigeria Plc  with a loss of 18.6 per cent. Nigerian Aviation Handling Company Plc shed 16.8 per cent,  just as  Conoil Plc went down by 15.9 per cent.  The petroleum products marketing firm went down despite reporting a jump of 54 per cent in profit after tax (PAT) for the first quarter ended March ,31, 2019.

The company grew its revenue by 13.8 per cent from N31.3 billion, N35.6 billion. Cost of sale rose from N28.3 billion to N32.7 billion, making gross profit to decline marginally from N3.1 billion to N3 billion. However, distribution expenses fell from N650 million to N449 million, just as administrative expensive reduced from N1.669 billion to N1.556 billion. Finance cost fell from N525.9 million to N506.52 million. As a result, profit before tax increased from N310.73 million in 2018 to N478.2 million, while PAT rose from N211.29 million to N325 million in 2019.

 PZ Cussons Nigeria Plc shed 10.1 per cent while AXA Mansard Insurance Plc declined by 10 per cent.  Other to price gainers included: Linkage Assurance Plc (9.8 per cent); Nestle Nigeria Plc (8.9 per cent); UACN Property Development Company Plc (8.5 per cent) Sugar Refinery Plc (7.8 per cent).