Equities Market Extends Losses on Continuing Bearish Trading 

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Goddy Egene

The Nigerian equities market fell by 0.09 per cent last week as investors’ sentiments remained weak despite low valuations. However, the decline last week was better than the 0.29 per cent fall recorded the previous week. 

Specifically, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) ended at 27,675.04, while   market capitalisation stood at N13.472 trillion.   Just like the NSE ASI,  the NSE Industrial Goods Index and NSE Banking Index also depreciated by 1.8 per cent and 1.6 per cent respectively.

However, the NSE Oil & Gas Index went up by 11.6 per cent, while the NSE Consumer Goods Index and Industrial Goods Index  gained 5.0 per cent and 3.0 per cent in that order.

Analysts at Cordros Capital said they still expected  the market to remain pressured given global risk-off sentiments and weak domestic participation. 

“Nonetheless, we note that valuations remain attractive while price deterioration has resulted in expected dividend yields on some stocks rising significantly to levels on par with yields on Treasury bills. Hence, we advise that long-term investors consider appropriately timed investments,” they said.

One good news that came from the market last week was that operators and regulators were introducing new and innovative processes and products that would attract more investors and deepen the market. 

The acting Director General of the Securities and Exchange Commission (SEC), Ms. Mary Uduk  stated this, even as she noted that  capital markets across the world have products and mechanisms to stimulate economic growth and development. 

According to her, while there many of such products  in Nigeria, there were  aspects that were still untapped, thereby limiting the realisation of our potential.

Uduk, said for this reason that some of the processes of SEC that were previously manual and inefficient were now being automated to make the market more attractive to investors.

She said: “For instance, with the dematerialisation process completed, investors no longer need to not worry about the loss or damage to their physical share certificates as they are now electronically stored. Further, the current e-Dividend system enables shareholders’ dividend to be paid directly into their bank account without the stress of dealing with physical dividend warrants. 

“Also, the Direct Cash Settlement protects investors from funds mismanagement by ensuring that the proceeds of their shares sales are credited directly into their own account as against that of the stockbroker. 

“We are equally working on ensuring that companies’ annual reports are distributed electronically thereby ensuring timeliness of information to shareholders and cost reduction to public companies.” 

According to her, SEC is working towards a situation where the capital market would be used to solve challenges of mispricing and non-standardisation of commodity products, as well as low foreign exchange earnings bedevilling the country’s agricultural sector.

Also, the International Organisation of Securities Commissions (IOSCO) is preparing to launch its third annual World Investor Week (WIW) from  to   October 6. 

WIW is a week-long, global campaign, which aims to promote investor education and investor protection, highlighting the various initiatives of securities regulators in these two critical areas. IOSCO members will provide, in their jurisdictions, a wide variety of activities such as launching publications or services, promoting contests and organising workshops, conferences and other events. 

The Chair of the IOSCO Board and the Chief Executive Officer of the Hong Kong Securities and Futures Commission, Ashley Alder,  said: “I welcome this third edition of the World Investor Week which evidences IOSCO’s continuous efforts and commitment to investor education and protection, encouraging new initiatives among IOSCO members and preparing them for dealing with the challenges of increasingly interconnected and digitalized capital markets.”

On her part, Uduk said SEC was determined to ensure capital market investors were adequately protected in all transactions and that was the reason why the commission had stepped up enlightenment campaigns on some of its initiatives. 

She said: “As you are aware, we have a number of initiatives that we have put in place to boost investors’ confidence. We have the e-dividend Mandate Management System, the Direct Cash Settlement as well as regularisation of multiple subscriptions in place. 

“Considerable progress has been made in the implementation of the consolidation of multiple shareholder accounts and electronic Dividend Mandate Management System (e-DMMS) as so far about 3.4bn shares have been consolidated. 

“Both measures were introduced as part of checking the growth and possibly eliminating the unclaimed dividend menace in our capital market”. 

She added that investors were also protected through the National Investors Protection Fund (NIPF) and the Risk Based Supervision that enabled the commission to supervise operators to do the right thing.

“We have a complaints management framework that enables investors to know where to complain to and how long it takes for such complaints to be resolved. 

“We are committed to protecting investors in the work we do. We will keep working on our rules and the possibility of amending them when the need arises, we want more transparency in the market so that investors will feel comfortable and the market can be better,” she said. 

Market turnover

Meanwhile, investors traded 1.097 billion shares worth N16.693 billion in 14,717 deals last week compared with 1.272 billion shares valued at N18.750 billion that exchanged hands in 19,482 deals the previous week. 

However, the Financial Services industry remained the most active, recording 751.568 million shares valued at N6.414 billion traded in 8,086 deals, With that performance, the sector contributed 68.53 per cent and 38.43 per cent  to the total equity turnover volume and value respectively. The Consumer Goods industry followed with 141.469 million shares worth N8.531 billion in 2,427 deals, while the third place was occupied by the Conglomerates Industry with a turnover of 101.787 million shares worth N203.242 million in 956 deals.   

 Trading in the top three equities namely, Access Bank Plc, Nigerian Breweries Plc and Custodian Investment Plc accounted for 494.681 million shares worth N8.954 billion in 2,137 deals, contributing 45.1 per cent and 53.6 per cent to the total equity turnover volume and value respectively.

At the exchange traded products segment of the market, a total of 16,253 units valued at N1.103 million were traded last in 13 deals, compared with a total of 96 units valued at N215,654.78 transacted in six deals the previous week.

Similarly, the bonds market recorded a total of 36,581 units of Federal Government Bonds valued at N37.504 million traded in 16 deals last week, as against 17,761 units valued at N20.361 million transacted in five deals  two weeks ago. 

Top price gainers and losers

The price movement chart showed 22 stocks that appreciated last week lower than 38 equities in the previous week, while 42 equities depreciated in price, higher than 29 equities in the previous week.  Seplat Petroleum Development Company Plc led the price gainers with 21 per cent, trailed by Continental Reinsurance Plc with 20.3 per cent. Total Nigeria Plc and Eterna Plc chalked up 20 per cent and 16.3 per cent.  Nestle Nigeria Plc went up 11.1 per cent just as Transnationwide Express Plc and NCR Nigeria Plc garnered 10 per cent each.

Conversely, Learn Africa Plc led the price losers with 19.4 per cent, followed by UACN Property Development Plc with 18.3 per cent, just as NPF Microfinance Plc shed 12 per cent.

Stanbic IBTC Holdings Plc  lost 11.3 per cent, while Cement Company of Northern Nigeria Plc went down by 9.9 per cent. Presco Plc  depreciated by 9.9 per cent, while  Skyway Aviation Handling Company Plc and Nigerian Aviation Handling Company Plc depreciated by  shed 9.8 per cent and 9.6 per cent respectively.

Consolidated Hallmark Insurance Plc and Vitafoam Nigeria Plc declined by 9.0 per cent apiece.