NSE Roundup! Equities lost N101b as investors await monetary decisions

Nigerian equities failed to respond positively to corporate earnings reports and dividend recommendations released last week as investors weighed investment options in the light of this week’s meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN).

In spite of major earnings reports and dividend announcements, the stock market came under intense selling pressure as investors readjust portfolios ahead of the monetary policy meeting of the apex bank. The MPC of the CBN is scheduled to meet between Monday, March 21 and Tuesday, March 22.

Many leading companies released their full-year earnings reports and dividend recommendations for the 2015 business year during the week. GlaxoSmithKline Consumer Nigeria announced a dividend per share of 30 kobo. AXA Mansard Insurance announced a final dividend per share of 2.0 kobo. Nestle Nigeria declared final dividend of N19. Zenith Bank also announced a final dividend of N1.55. United Bank for Africa (UBA) recommended distribution of a dividend per share of 40 kobo. Access Bank declared final dividend of 30 kobo while Guaranty Trust Bank proposed a final dividend per share of N1.52.

While dividend yields for most companies that declared dividends were in double digit, most equities with price changes ended on the negative side. There were 20 gainers against 41 losers last week as against 39 gainers recorded against 22 losers in the previous week.

Key benchmark indices at the Nigerian Stock Exchange (NSE) showed widespread selling sentiments. Aggregate market value of all quoted equities on the NSE dropped by N101 billion from the week’s opening value of N8.940 trillion to close at N8.839 trillion. The All Share Index (ASI)- the common value-based index that tracks prices of all quoted equities, declined by 1.13 per cent to close the week at 25,694.79 points as against its week’s opening index of 25,988.40 points. With this, average year-to-date return stood at -10.29 per cent.

Share price analysis, in percentage terms, showed that Oando recorded the highest percentage decline during the week, dropping by 25.23 per cent to close at N4. Ecobank Transnational Incorporated dropped by 20.28 per cent to close at N14.35. Access Bank declined by 10.63 to close at N3.95. Honeywell Flour Mills lost 10 per cent to close at N1.62 while Ikeja Hotel dropped by 9.62 per cent to close at N2.35 per share.

On the positive side, Conoil led the contrarian stocks with a gain of 21.38 per cent to close at N20.10. United Bank for Africa followed with a gain of 9.59 per cent to close at N3.77 while Law Union and Rock Insurance rose by 9.38 per cent to close at 70 kobo per share.

The performance of the Nigerian equities was against the global positive trend. Most advanced and emerging markets across the continents were on the upswing last week amidst improvements in global crude oil price and investors’ confidence. In Europe, the United Kingdom FTSE Index rose by 1.3 per cent. Germany’s XETRA DAX Index indicated a week-on-week gain of 0.6 per cent. In United States, the NASDAQ Index and S&P 500 Index rallied 1.2 per cent and 0.7 per cent respectively. The Hong Kong HANG SENG rose by 2.3 per cent. However, France CAC Index declined by 1.0 per cent while Japan Nikkei Index slipped by 1.3 per cent.

In the five-nation group of Brazil, Russia, India, China and South Africa (BRICS), the benchmark indices showed a largely bullish market situation. Russia’s RTS Index rallied 6.4 per cent. China Shanghai Composite Index rose by 5.2 per cent. South Africa FTSE/JSE Index appreciated by 3.7 per cent. Brazil’s IBOVESPA Index rose by 2.4 per cent while India’s Bombay Stock Exchange (BSE) Index gained 0.9 per cent.

However, it was a mixed performance in Africa. Egypt’s EGX Index rose by 14 per cent while Ghana Stock Exchange Composite Index dropped by 1.5 per cent.

Nigerian equities meanwhile saw remarkable increase in turnover as major acquisition deals pushed turnover to new highs. Turnover at the stock market jumped by 971.7 per cent last week as two major acquisition deals were consummated at the NSE. Turnover rose to 11.91 billion shares valued at N18.34 billion in 19,508 deals last week, representing 972 per cent and 146.2 per cent increase in turnover volume and value respectively. In the previous week, turnover stood at 1.11 billion shares valued at N7.45 billion in 15,562 deals.

The turnover last week was driven by major acquisition deals on Wema Bank Plc and Unity Kapital Assurance Plc. A total of 4.16 billion shares of Unity Kapital Assurance Plc were swapped in a cross deal at 77 kobo per share. This represented about 30 per cent equity stake in Unity Kapital Assurance.

Also, a total of 6.67 billion shares of Wema Bank Plc were swapped in three deals at 90 kobo per share. The deals were block divestments. The three deals represented 17.3 per cent equity stake in Wema Bank.

The acquisition deals expectedly placed Wema Bank and Unity Kapital atop the activities’ chart. The trio of Wema Bank Plc, Unity Kapital Assurance Plc and Zenith Bank International Plc accounted for 11.01 billion shares worth N11.27 billion in 2,856 deals, representing 92.4 per cent and 61.5 per cent of the total equity turnover volume and value respectively.

The financial services sector remained the most active sector with a turnover of 11.69 billion shares valued at N14.73 billion traded in 13,094 deals; representing 98.2 per cent and 80.35 per cent of the total equity turnover volume and value respectively. The conglomerates sector followed with 71.89 million shares worth N175.60 million in 777 deals while the consumer goods sector placed third with a turnover of 69.72 million shares worth N1.18 billion in 3,019 deals.

Also traded during the week were a total of 294,047 units of Exchange Traded Products (ETPs) valued at N3.209 million executed in 42 deals, compared with a total of 72,054 units valued at N637,635.25 traded in 26 deals two weeks ago.

In the bonds segment, a total of 12,470 units of Federal Government bonds valued at N14.348 million were traded in eight deals last week.

Analysts said they expected more companies to release their earnings reports this week. Earnings performance and dividend recommendations would continue to be the underlying market drivers but monetary policies would influence momentum at the stock market, given the large proportion of foreign portfolio investors.

“We expect more earnings announcements to drive market performance in the coming week with marginal swings on selected tickers due to profit taking activities,” Afrinvest Securities stated in its outlook for this week.

 

 

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