All-Share Index Year-to-date Decline Hits 15.9% on Continuing Bearish Trading

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Goddy Egene

It was another bearish trading last week at the stock market as investors sentiments remained negative. Although the earnings season when listed companies report their results for nine months is already here, many investors are still waiting to see the figures before taking advantage of the low prices of most stocks.

As a result, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell further by 0.32 per cent to close lower at 26,448.62, while market capitalisation shed N41.5 billion to close at N12.9 trillion.  The persistence bearish trading has led the year-to-date decline of the ASI to hit 15.9 per cent. The market recorded losses in four days. It opened on a positive note the first day, appreciating by 0.10 per cent due to gains in Dangote Cement Plc, Flour Mills of Nigeria Plc and United Bank for Africa Plc. But declined by 0.20 per cent, 0.16 per cent and 0.06 per cent on Tuesday, Wednesday and Thursday respectively.

In terms sectoral performance for the week, the NSE Insurance Index led the gainers with 2.4 per cent, followed by the NSE Consumer Goods Index with 0.1 per cent. On the contrary, the NSE Banking Index led the price losers with 2.0 per cent, trailed by NSE Industrial Goods Index with 0.3 per cent. The NSE Oil & Gas Index shed 0.2 per cent.

Ahead of the earnings season, analysts at Meristem Securities Limited had advised investors to realign their portfolios to accommodate value and income stocks. 

According to the analysts, challenging business environment, slow economic growth and Nigeria’s susceptibility to oil price volatility remains the key risks facing the country. And these, they said had led to the weak performances witnessed across the different sectors of the economy.

“Economic activities have been largely dampened by delays in the implementation of the government’s capital budget. Likewise, the increased competition and weak infrastructural spending have also hampered growth in the industrial goods sector. Similarly, consumer spending has remained tepid since the exit from recession and this has led to weaker revenues for the fast-moving consumer goods players,” they said.  

“In the light of all these, our earnings expectation in the third quarter is quite modest, as we do not envisage a reversal from the prevailing market conditions. While the appointment of the ministers and the economic team by the Presidency should provide clarity on fiscal policy, the need to implement structural reforms that will unlock growth and boost investor confidence remains pertinent,” they added. 

Meanwhile, an analysis of the other African markets showed a mixed performance. The Mauritius market recorded the highest slide of 1.0 per cent. Egypt’s EGX 30 trailed by 0.7 per cent.

On the positive side, Ghana’s GSE Composite Index led gainers, advancing 1.1 per cent trailed by Morocco’s Casablanca MASI with 0.80 per cent.  Kenya’s NSE 20 Index appreciated by 0.20 per cent.

In the Asia and Middle East region, performance was mixed but negatively skewed. Saudi-Arabia’s Tadawul appreciated the most, rising by 0.8 per cent, followed by Turkey’s BIST 100 with 0.6 per cent. Conversely, Qatar’s DSM 20 led the losers, shedding 1.9 per cent. Similarly, UAE’s ADX General went down by 0.4 per cent, while Thailand’s SET Index lost 0.3 per cent.

In the BRICS markets, performance was relatively bullish as only China’s Shanghai Composite Index declined by 1.2 per cent to close as the only loser.   Analysts attributed the slide to weak economic growth which was the lowest since early 1990s. 

However, on the positive side, India’s BSE Sens led gainers, rising by 3.1 per cent. Russia’s RTS Index followed with a gain of 2.0 per cent. Brazil’s Ibovespa and South Africa’s FTSE/JSE All Share indices also gained 1.3 per cent and 0.9 per cent in that order. 

Performance in the developed markets was bullish with the S&P 500 and NASDAQ indices of the United States rising 1.2 per cent and 1.0 per cent in that order.

In Europe, performance was mixed as only Germany’s XETRA DAX index gained, up 1.2 per cent while UK’s FTSE All Share and France’s CAC 40 indices lost 0.5 per cent and 0.4 per cent respectively. Japan’s Nikkei 225 rose 3.2 per cent just as Hong Kong’s Hang Seng Index appreciated 1.6 per cent.

 Market turnover

Meanwhile, investors traded 896.610 million shares worth N16.561 billion in 12,638 deals last week, compared with 1.409 billion shares valued at N31.959 billion that exchanged hands   week in 13,616 deals the previous week. 

 The Financial Services industry led the activity chart with 597.154 million shares valued at N6.721 billion traded in 7,197 deals, thus contributing 66.6 per cent and 40.58 per cent to the total equity turnover volume and value respectively. 

The Consumer Goods industry followed with 102.130 million shares worth N7.214 billion in 2,027 deals. The third place was Service industry with a turnover of 84.001 million shares worth N377,017 million in 264 deals.    Trading in the top three equities namely, Guaranty Trust Bank Plc, Global Spectrum Energy Services Plc and Flour Mills Nigeria Plc accounted for 302.285 million shares worth N5.510 billion in 1,290 deals, contributing 33.7 per cent and 33.3 per cent to the total equity turnover volume and value respectively. 

Investors also traded a total of 960 units valued at N146,642.75 of Exchange Traded Products(ETPs) in 11 deals compared with a total of 9,219 units valued at N1.079 million transacted in 24 deals the previous week.

The bonds market recorded 1,397 units of Federal Government Bonds valued at N1.518 million in nine deals compared with a total of 2,519 units valued at N2.670 million transacted in 12 deals two weeks ago. 

Top price gainers and losers

The price move chart showed 19 price gainers lower than 20 in the previous week, while 23 equities depreciated in price, lower than 33 equities in the previous week.

Consolidated Hallmark Insurance Plc led the price gainers with 17.8 per cent trailed by Fidson Healthcare Plc with 11.1 per cent, while Custodian Investment Plc garnered 9.7 per cent. 

Law Union & Rock Insurance Plc went up by 6.8 per cent, just as Livestock Feeds Plc and AXAMansard Insurance Plc chalked up 6.3 per cent 6.2 per cent respectively.

Nigerian Aviation Handling Company Plc, FCMB Group Plc appreciated by 5.1 per cent and 5.0 per cent, while Cement Company of Northern Nigeria Plc and Fidelity Bank Plc gained 4.2 per cent apiece.

Conversely, Cornerstone Insurance Plc led the price losers with 17.9 per cent, trailed by Cutix Plc with 12.6 per cent. PZ Cussons Nigeria Plc shed 11.9 per cent, just as Chams Plc and UAC of Nigeria Plc lost 11.5 per cent and 10.4 per cent in that order.

UACN Property Development Company Plc shed 9.9 per cent, while Glaxsmithkline Consumer Nigeria Plc went down by 9.8 per cent. Learn Africa Plc and   Vitafoam Nigeria Plc dipped by 9.7 per cent each just as Global  Spectrum Energy Services Plc depreciated by 9.6 per cent.