NSE LIVE! Equities decline by 1.14%

Nigerian equities remained on the negative side last week as the inauguration of the newly constituted Federal Executive Council (FEC) by President Muhammadu Buhari on Wednesday failed to trigger a massive rally to spur buying sentiments. Average week-on-week return stood at -1.14 per cent last week, equivalent to a loss of N114 billion.
The All Share Index (ASI)-the common price-based index that tracks all quoted equities at the Nigerian Stock Exchange (NSE) dropped by 1.14 per cent to close at 28,841.67 points as against the week’s opening index of 29,175.35 points.
With 38 losers to 29 gainers, aggregate market value of all quoted equities decreased by N114 billion to close the week at N9.915 trillion as against the week’s opening value of N10.029 trillion. The losses last week further worsened the negative average year-to-date return to -16.78 per cent.
Market pundits said investors were still cautious and uncertain about the fiscal and monetary policies of the new Ministers. The Nigerian equities market is largely dominated by foreign portfolio investors and local institutional investors, who depend on key macroeconomic indicators including foreign exchange, inflation management, trade policies and enforcements among others, to outline medium to long-term portfolio strategies.
Investors were particularly keen on the leaning and policy direction of the new Minister of Finance, Mrs Kemi Adeosun, who is expected to drive the financial markets’ policy formulation in alignment with the government’s macroeconomic objectives. During her screening at the Senate, she had voiced support for the current foreign exchange management framework of the Central Bank of Nigeria (CBN), reiterating similar position earlier taken by President Muhammadu Buhari.
Market analysts said investors wanted to gauge the policy flexibility of the new Minister of Finance and her commitment to a policy direction, which will ensure stability necessary for medium to long-term strategies.
“Important policy decisions lie ahead and the market would expect the Finance Minister to work out a coordinated policy framework along with monetary authorities to respond to the macroeconomic challenges of slow growth, heightened inflationary pressure, declining reserve buffers and exchange rate uncertainty,” Afrinvest Securities, a Lagos-based securities firm stated.
Analysts said the weak macroeconomic environment presents a tough mixture for the new FEC, with the Minister of Finance at the core of the decision-making. Analysts expected the third quarter Gross Domestic Products growth to fall below the 2.4 per cent recorded in the second quarter while the CBN’s administrative forex measures have dampened corporate performance.
“An improvement in equities market performance – which has been bearish of recent — may be long-drawn-out as investors continue to wait on further policy clarity from the fiscal authorities and a review of the current foreign exchange policy of the CBN. Analysis of relative valuation of equities across frontier and emerging markets relative to Nigeria suggests that investors’ reactions have been majorly spurred by weak companies’ earnings necessitated by challenging macroeconomic environment,” Afrinvest Securities noted.
According to analysts, the stock market is waiting for many signals for a major turnaround in sentiments for equities; including optimal pricing of forex rate, clearer fiscal policy direction and reinstatement of investor confidence in monetary and fiscal policy managers.
Cross sectoral analysis of the Nigerian stock market performance last week showed widespread negative sentiments. All group and sectoral indices at the NSE, with the exception of insurance and ethical indices, closed in the red as investors showed less appetite for market-leading stocks. The NSE Premium Index, which tracks the trio of Dangote Cement, FBN Holdings and Zenith Bank International, declined by 0.74 per cent. The NSE Main Board Index dropped by 1.36 per cent. The NSE 30 Index, which tracks 30 most capitalised stocks, declined by 1.41 per cent. The NSE Banking Index also slipped by 0.97 per cent. The NSE Consumer Goods Index lost 2.49 per cent. The NSE Oil and Gas Index depreciated by 0.25 per cent. The NSE Industrial Goods Index lost 1.65 per cent while the NSE Pension Index dropped by 0.62 per cent. However, the NSE Insurance Index rose by 0.93 per cent while the NSE Lotus Islamic Index appreciated by 0.17 per cent.

Read also: NSE LIVE! Equities relapse as investors await fiscal direction

Unilever Nigeria recorded the highest gain of 15.75 per cent to close the week at N36.38. Eterna followed with a gain of 12.42 per cent to close at N1.81 while UACN Property Development Company rose by 10.14 per cent to close at N7.28 per share.
On the downside, AG Leventis recorded the highest loss of 12.75 per cent to close at 89 kobo. Caverton Offshore Services Group dropped by 9.42 per cent to close at N2.50 while E-Tranzact declined by 9.26 per cent to N2.45 per share.
Total turnover stood at 2.06 billion shares worth N23.4 billion in 14,992 deals last week as a total of 1.95 billion shares valued at N17.34 billion traded in 15,762 deals in previous week. The financial services sector accounted for 1.484 billion shares valued at N14.555 billion in 8,406 deals; representing 71.90 per cent and 62.21 per cent of the total equity turnover volume and value respectively.

RipplesNigeria …without borders, without fears

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now