Stock Market Falls Further, Sheds N141bn on Continuing Bear Run

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Goddy Egene

Contrary to expectations that the stock market may be bullish, it declined further as mixed reactions followed announcement of results for the half year ended June 30, 2019.

It was expected that the market would rebound and close last week following the marginal decline recorded the previous week. It was also hoped that the release of results by companies would halt the persistent decline in the market.

However, the bears remained in control as the Nigerian Stock Exchange (NSE) All-share Index (ASI) depreciated by 1.03 per cent to close at 27,630.46, while market capitalisation shed N141.3 billion to be at N13.464 trillion. 

Market analysts said market failed to rebound last week as investors were not excited by the results released of companies, most of which they were considered to be weak.

The market had started on a positive note  on Monday as  gains in Dangote Sugar Refinery Plc and Nestle Nigeria Plc  pushed the index   up by 0.37 per cent.

However, the bears took control of the market on Tuesday  on negative note, shedding 0.5 per cent. The same negative trend was maintained on Wednesday as the index went down by 0.4 per cent.  Thursday was another positive performance with the index 0.1 per cent. But weak sentiments set on Friday pushing the index down by 0.43 per cent.

In terms of sectoral performance, the NSE Consumer Goods Index led the laggards with 5.1 per cent, trailed by NSE Banking Index  and NSE Insurance Index with 1.6 per cent each, while the NSE Oil & Gas Index shed 1.1 per cent.

Last week, the NSE delisted First Aluminium Nigeria Plc from the exchange.  The company had explained that id opted for voluntary delisting because the shareholders were not benefiting from the continued listing as they were not  getting exit opportunities.

 “The share price was stuck at 50 kobo for about six years between June 2011 and June 2017, and thereafter experienced further diminution, both in share price and trading volumes.  Over the last 18 months’ daily average volume ranged between 2,815 to roughly 2,918 units during the period July 2017 to December 2018. Shareholders are not benefiting from the continued listing as they are not getting exit opportunities and their investments have been locked up, thereby finding it difficult to dispose of their shareholding. Neither the company nor its shareholders have benefitted as the company’s shares continue to trade at a significant discount to the intrinsic value,” the company said. 

According to the company, the rationalisation of operational expenses to support the company’s business and to meet the needs of various stakeholders as the attendant cost required to comply with its listing requirements including filing fees, penalties or sanctions, were  not commensurate with the benefits to the company. 

It added  the increasing competitive environment and the struggle to defend market share have resulted in market pressure to reduce price and this might significantly impact operating margin. 

First Aluminium therefore said the   delisting would  enable it to carry out an imminent corporate restructuring exercise to take advantage of emerging opportunities and may consider re-listing the company in the future if the market conditions are favourable.

 “The voluntary delisting will not occasion loss of business opportunities as there are similar unlisted aluminium companies who are commanding significant share of the aluminium market. Also, minority shareholders will not lose their shares because of the voluntary delisting and such shareholders may retain their membership in the unlisted company. 

Apart from the Nigerian market that performed negatively,   Kenya’s NSE 20 lost 2.5 per cent while Ghana’s GSE Composite went down by 1.7 per cent.

On the other hand, Mauritius’ SEMDEX  led the gainers with  0.7 per cent, trailed by  Morrocco’s Casablanca MASI  with 0.3 per cent, while  Egypt’s EGX 30  indice went up by 0.1 per cent.

Analysts at Cordros Capital Limited said their outlook for equities in the short to medium term remains conservative, amidst the absence of any catalyst to drive positive market returns.

Market Turnover

Meanwhile, a total turnover of  759.266 million shares worth N 14.038 billion in 16,209 deals were traded last  week by investors in contrast to a total of 1.069 billion shares valued at N11.393 billion that exchanged hands  the preceding  week in 16,346 deals.  

But the Financial Services industry remained the most active  chart with 495.646 million shares valued at N5.150 billion traded in 7,832 deals, thus contributing 65.28 per cent and 36.68 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 68.261 million shares worth N136.849 million in 896 deals. The third place was ICT Industry with a turnover of 53.931 million shares worth N4.726 billion in 849 deals.   

 Trading in the top three equities namely, Zenith Bank Plc, Guaranty Trust Bank Plc and United Bank For Africa Plc accounted for 237.878 million shares worth N4.218 billion in 3,555 deals, contributing 31.33 per cent and 30.05 per cent to the total equity turnover volume and value respectively.

Also, a total of 87,142 units valued at N1.180 million were traded last week in 18 deals compared with a total of 753 units valued at N102,213.02 transacted  the previous week in  eight  deals.  

A total of 433,774 units of Federal Government Bonds valued at N445.318 million were traded last week in 16 deals compared with a total of 22,242 units valued at N22.559 million transacted two   weeks in 15 deals.

Top price gainers and losers

The price movement chart showed that 32 equities appreciated in price during the week, higher than 31 equities in the previous week, while 27 equities depreciated in price, lower than 29 equities in the previous week.

Unity Bank Plc led the price gainers with 27.6 per cent, trailed by C & I Leasing Plc with 21 per cent, just as Vitafoam Nigeria Plc went up by 15.3 per cent. 

Julius Berger Nigeria Plc chalked up 13.8 per cent, while Trans-Nationwide Express Plc garnered 10 per cent. Fidson Healthcare Plc  gained 9.7 per cent, while Union Diagnostic & Clinical Services Plc 9.0 per cent. Ikeja Hotel Plc, MCnichols Plc, Berger Paints Nigeria Plc appreciated  8.9 per cent, 8.8 per cent and 8.7 per cent respectively.

Conversely, Eterna Plc led the price losers with 19.4 per cent, trailed by Nigerian Breweries Plc with 16.6 per cent. NCR (Nigeria) Plc shed 11.6 per cent, just as University Press Plc and Total Nigeria Plc lost 11.1 per cent and 9.9 per cent  in that order.

Continental Reinsurance Plc shed 9.9 per cent, while Custodian Investment Plc and A.G Leventis Nigeria Plc  went down by 9.9 per cent and 9.8 per cent respectively.

Other top price losers included: Conoil Plc (8.1 per cent) and Transnational Corporation of Nigeria Plc (6.9 per cent).