Stock Market Sustains Gains on Dividend Payment

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By Goddy Egene

The stock market sustained its positive performance last week as investors reacted to recommendations by companies to pay interim and full year dividends.

Investor sentiments were strong pushing the market to close in the bulls’ territory all through the five trading sessions.

By the close of the week, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) appreciated by 1.17 per cent to close at 25,605.64, while market capitalisation added N154.4 billion to close at N13.358 trillion.

More-than-expected corporate earnings releases, especially from Access Bank Plc, Stanbic IBTC Holdings Plc and Zenith Bank Plc and interim dividends declared by them fueled demand for banking stocks during the week under review.

In all, five banks announced interim dividends for the half year ended June 30, 2020, while three other companies announced dividends for their full year’s operations.

Stanbic IBTC Holdings Plc recommended an interim dividend of 40 kobo, while
Zenith Bank Plc and GTBank recommended interim 30 kobo apiece. Access Bank Plc recommended an interim dividend of 25 kobo while United Bank for Africa Plc recommended 17 kobo.

On the other hand, Redstar Express Plc recommended a dividend of 35 kobo for the year ended March 31, 2020, just as University Press Plc and Learn Africa Plc announced 15 kobo and five kobo respectively.

Apart from the fact that the market gained in the five trading days, the five sectoral indicators also ended the week higher. The NSE Oil & Gas Index led with 3.7 per cent, trailed by the NSE Banking Index with 2.8 per cent. NSE Insurance Index went up by 2.0 per cent, while the Consumer Goods Index and the NSE Industrial Goods Index appreciated by 1.5 per cent and 0.4 per cent respectively.

Investors traded 2.209 billion shares worth N10.957billion in 18,013 deals last week compared with 1.072billion shares valued at N7.384billion that exchanged hands the previous week in 16,684deals. For the first time in recent time, the financial sector was displaced from the number spot of the activity chart in volume terms by Construction/Real Estate sector with 954.529million shares valued at N681.392million traded in 218deals, thus contributing 43.21 per cent and 6.22 per cent to the total equity turnover volume and value respectively.

The Financial Services industry followed with 889.888 million shares worth N6.538billion in 10,107deals, while the third place was occupied by the Conglomerates industry, with a turnover of 209.437million shares worth N579.990 million in 677deals.

Meanwhile, 41 equities appreciated in price during the week, higher than 29 equities in the previous week, while 19 equities depreciated in price, lower than 36 equities in the previous week.

Royal Exchange Plc led the price gainers with 26.9 per cent, trailed by Cornerstone Insurance Plc with 17.8 per cent. Union Diagnostic & Clinical Services Plc chalked 12.5 per cent.

UAC of Nigeria Plc garnered 10.5 per cent, just as Livestock Feeds Plc and Double One Plc appreciated by 10 per cent each. Other top price gainers included: Law Union and Rock Insurance Plc (9.7 per cent); Eterna Plc (9.4 per cent), Vitafoam Nigeria Plc and FTN Cocao Processors Plc (8.3 per cent).

Conversely, The Initiates Plc led the price losers with 18.5 per cent trailed by Lasaco Assurance Plc with 16.1 per cent. Tripple Gee & Company Plc shed 12 per cent, just as C & I Leasing Plc and Academy Press Plc shed 10 per cent apiece. Wapic Insurance Plc went down by 5.7 per cent, while Union Bank of Nigeria Plc closed 5.5 per cent lower.

Other top price losers included: Glaxo Smithkline Consumer Nigeria Plc (4.9 per cent); Oando Plc (4.2 per cent); and NEM Insurance Plc (3.7 per cent).