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NSE LIVE! Equities lose N245b as investors await monetary decisions

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NSE LIVE! Equities stumble amidst sell pressure

Nigerian equities continued to bleed profusely last week as a combination of foreign exchange crisis, policy uncertainties and weak corporate earnings sustained pressure on the share prices of most quoted companies.
In a week that preceded the November 23-24 meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), most transactions at the Nigerian stock market highlighted investors’ concerns and lack of appetites for aggressive risk-taking.
While turnover dropped considerably during the week, partly due to low prices that forced many to hold on to supply, there were widespread selling sentiments, which turned the market into a buyers’ market, with most transactions closed at discounts.
There were 19 gainers last week as against 29 gainers recorded in the previous week while the number of losers increased from 38 stocks two weeks ago to 41 stocks last week. Two-thirds of quoted equities closed flat, almost a traditional pattern on the Nigerian Stock Exchange (NSE) where a large portion of equities has stagnated at nominal values and several others have been almost unresponsive.
Aggregate market value of all quoted equities dropped by N245 billion last week to close the week at N9.670 trillion as against the week’s opening value of N9.915 trillion. The All Share Index (ASI), the value-based common index that tracks all quoted equities, declined by 2.46 per cent to close at 28,203.20 points compared with its week’s opening index of 28,841.67 points. The sustained declined last week pushed the negative average year-to-date return at the stock market to -18.8 per cent. All sectoral and group indices also closed on the negative, underlining the spread of the negative sentiments.
Total turnover dropped to 793.557 million shares worth N7.152 billion in 12,831 deals last week, compared with a total of 2.064 billion shares valued at N23.397 billion that were traded in 14,992 deals two weeks ago. Expectedly, the financial services sector remained atop the activities chart with a turnover of 662.860 million shares valued at N3.127 billion traded in 7,436 deals; representing 83.53 per cent and 43.73 per cent of the total equity turnover volume and value respectively. The consumer goods sector followed with 34.059 million shares worth N1.250 billion in 2,565 deals. The third place was occupied by the conglomerates sector with a turnover of 33.903 million shares worth N266.892 million in 554 deals.
The trio of FBN Holdings Plc, Access Bank Plc and Continental Reinsurance Plc were the most active stocks with a joint turnover of 342.365 million shares worth N1.403 billion in 2,549 deals, representing 43.14 per cent and 19.61 per cent of the total equity turnover volume and value respectively. Also traded during the week were a total of 2,143 units of Exchange Traded Products (ETPs) valued at N1.734 millions executed in 35 deals.

Read also: NSE LIVE! Equities close to rebound as demand picks up

Tiger Branded Consumer Goods Plc, the former Dangote Flour Mills that has been in the eyes of the storm in recent days, recorded the highest loss of 26.09 per cent to close at N1.87. Oando, which has also been plagued by post-impairment crisis of confidence, followed with a drop of 19.58 per cent to close at N6.20 while Stanbic IBTC Holdings declined by 11.78 per cent to close at N18.43 per share. The foreign core investor in Dangote Flour Mills, Tiger Brands Limited of South Africa, had last week announced that it would no longer provide funding for the Nigerian company, an announcement that was simultaneous with the exit of Alhaji Aliko Dangote and his team from the board of the company. Oando is struggling with integrity issue after it delayed results showed huge losses in 2014 and the first three quarters of this year. Stanbic IBTC Holdings has been enmeshed in a tussle with the Financial Reporting Council of Nigeria over the propriety of the financial services holding company’s accounts.
Analysts at Afrinvest securities said the equities market has not benefitted from the huge level of liquidity in the system due to foreign exchange uncertainties and depressed economic fundamentals as seen in the poor third quarter results of many companies.
“We believe that the major drive for the market next week would be the much anticipated decision at the end of the 6th MPC meeting from the 23rd to the 24th of November. Nonetheless, the current market valuation signals significant upside potential in fundamental stocks for investors with a long term horizon,” Afrinvest Securities stated.
On the upside, Portland Paints and Products Nigeria topped the gainers’ list, in percentage terms, with a gain of 9.92 per cent to close at N3.88. E-Tranzact Nigeria followed with a gain of 5.31 to close at N2.58 while Livestock Feeds rose by 5.0 per cent to close at N1.47 per share.
Against the depression in the Nigerian market, analyses of major stock markets around the world showed considerable gains last week. In Europe, the France CAC 40 appreciated by 2.2 per cent. The UK FTSE All Share Index also improved by 3.3 per cent while Germany’s DAX rose by 3.9 per cent. In the United States, the S&P 500 index improved by 2.9 per cent while the NASDAQ inched up by 3.0 per cent. Japanese Nikkei appreciated by 1.4 per cent. The China Shanghai Composite index appreciated by 1.4 per cent. Also, the Hong Kong Hang Seng increased by 1.6 per cent. In Africa, South Africa’s FTSE/JSE index gained 1.6 per cent while Kenya’s NSE 20 Index increased by 1.4 per cent.

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