Equities Market Records Marginal Decline as Companies Announce Results  

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Goddy Egene

The stock market is likely to witness some level of recovery and relative stability as companies began to announce results for the half year ended June 30, 2019 last week.

Also, the names of ministers to drive the economic and other policies of the federal government in the next four years came out last week, thereby giving investors opportunity to make investment decision based on their assessment of the incoming economic management team.

Positive reaction to the above developments, led to a marginal decline of the market last week, compared to the previous weeks when it posted steep declines to hit a two-year low.

 Specifically, the Nigerian Stock Exchange (NSE) All-Share Index fell by 0.003 per cent to close at 27,918.59  last week as against 2.27 per cent fall the previous week. Also, the market capitalisation went down by same margin to close at N13.606 trillion.

An analysis of the market performance showed that  trading commenced on a negative note  as losses in MTN Nigerian Communications Plc  and Nigerian Breweries Plc  dragged  NSE ASI down by 0.40 per cent. However, the market went up 1.2 per cent on Tuesday when the news of ministerial list hits the market.

But the bears returned on Wednesday, leading to a decline of 0.8  per cent.  The negative trend persisted on Thursday and Friday  with the NSE ASI falling 0.5 per cent and 0.3 per cent in that order.

In terms of sectoral performance, the NSE Consumer Goods Index was the lone gainer with 0.7 per cent.  Contrarily, the NSE Insurance Index led the laggards with 0.9 per cent, trailed by   the NSE Banking Index with a decline of 0.7  per cent. The NSE Oil & Gas  Index went down by 0.2 per cent.

Following continuous decline in the prices of stocks, the Association of Securities Dealing Houses of Nigeria (ASHON)  recently urged investors not to engage on  panic sale of shares.

The Chairman of ASHON, Chief Patrick Ezeagu, who made the call on behalf of other operators,  said the  negative trend would soon be reversed.

He  had said that a trend analysis of corporate earnings in recent time indicates that many companies across sectors had posted higher earnings with good returns but this had not significantly reflected in the upward movement of their share prices. 

Ezeagu, explained that there was nothing unusual about this as the market generally reflects the trend in the economy, hence, investors buy into the future of these companies on the expectation of higher shareholder value.

Financial performance began to roll in last week with some turning significant growths, while some posted reduced bottom-lines. However, some market operators said on the average, the corporate earnings have raised investors’ hope for improved returns going forward.

Also, last week, the NSE moved to improved investors’ access to companies’ information so as to  take timely  investment decisions.

In that regard, the exchange has launched the  Investor Relations (IR) Data Pack, which is  dynamic webpage integrated with key market data, corporate news and disclosures, for corporate issuers. 

According to the exchange, the IR Data Pack is  designed to reduce burden on issuers, by providing them with an intuitive investor relations webpage which can easily be integrated to their existing corporate websites.

Commenting on the launch of IR Data Pack, Head, Trading Business, NSE, Mr. Jude Chiemeka,  said: “NSE  IR Data Pack is a necessary tool required by issuers to improve their engagement with investors. We came up with the IR programme  to provide value-added service to our issuers and make their daily market statistics available to investors in a real-time. It is a tool that will enhance their communication and outreach strategy to investors, analysts and other stakeholders”. 

Also speaking,  the  Chief Executive Officer, NSE, Mr. Oscar  Onyema, said: “We are delighted to provide a solution that enables adequate exposure to capital market information. Issuers can now drive a more robust market interaction on their corporate websites and potentially position themselves to attract more investors.”

Market turnover

The market recorded a total turnover of 1.069 billion shares valued at  N11.393 billion in 16,346 deals compared with  1.086 billion shares valued at N13.390 billion that exchanged hands  the previous week in 15,774 deals.  

However, the Financial Services industry remained the most active, recording 606.437 million shares valued at N5.381 billion traded in 7,529 deals. The sector, thus, contributing 56.7 per cent and 47.2 per cent  to the total equity turnover volume and value respectively. The ICT Industry followed with 225.576 million shares worth N1.776 billion in 751 deals, while the third place was  occupied Conglomerates Industry with a turnover of 66.375 million shares worth N85.924 million in 890 deals.    Trading in the top three equities: Courteville Business Solutions Plc, United Bank for Africa Plc and FCMB Group Plc accounted for 402.694 million shares worth N819.828 million in 1,526 deals, contributing 37.6 per cent and 7.2 per cent to the total equity turnover volume and value in that order.  

Top price gainers and losers

Meanwhile, the price movement chart  showed that  31 equities appreciated higher than 15 equities in the previous week, while  29 equities depreciated, lower than 52 equities in the previous week.

NPF Microfinance Bank Plc led the price gainers with 14.1 per cent, trailed by B.O.C Gases Plc with 11.6 per cent. Lafarge Africa Plc chalked up 11.2 per cent. The cement manufacturing firm, last week recorded a profit after tax of N9 billion for the half year ended June 30, 2019, up from a loss of N3.9 billion in the corresponding period of 2018.

Neimeth International Pharmaceuticals Plc garnered 10 per cent, while Nigerian Aviation Handling Company Plc gained 9.3 per cent. African Prudential Plc and UAC of Nigeria Plc added 8.8  per cent and 6.9 per cent respectively. Wema Bank Plc appreciated by 6.9 per cent.

Consolidated Hallmark Insurance Plc and LASACO Assurance Plc went up by 6.4 per cent and 6.1 per cent in that order.

On the negative side, Linkage Assurance Plc led the price losers with 20.3 per cent, trailed by International Breweries Plc with 18.3  per cent, just as Forte Oil Plc shed 10.6  per cent. Caverton Offshore Support Group Plc depreciated by 10.5 per cent, while NASCON Allied  Industries Plc lost 9.6 per cent. 

Global Spectrum Energy Services Plc and Unity Bank Plc shed 9.5 per cent and 9.3 per cent respectively.

Other to price losers include: Morison Industries Plc, Cornerstone Insurance Plc (9.0 apiece) and Livestock Feeds Plc (8.3 per cent).