NSE LIVE! Equities lose N59b as sell-off worsens

The selling pressure and momentum of activities intensified on Thursday at the Nigerian stock market as investors remained unexcited by emerging corporate earnings for the third quarter.

The profit-taking trend that emerged on Wednesday worsened into a notable sell-off on Thursday with more than two stocks falling for every stock that pushed up price.

Against the background of the third quarter results of Forte Oil Plc, which showed a decline of 34.7 per cent in net profit, investors pushed the shares of the oil and gas company to the market. The sell-off on Forte Oil shaved off N7.69 or 4.82 per cent from its share price, which closed lower at N152.

The benchmark index for the Nigerian stock market, the All Share Index (ASI), declined by 0.62 per cent to 27,854.78 points as against its opening index of 28,027.23 points. Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) also dropped by N59 billion from its opening value of N9.627 trillion to close at N9.568 trillion. With this, the negative average year-to-date return inched up to -2.75 per cent.

Sectoral and group indices showed a largely negative trading session. The NSE Banking Index declined by 2.1 per cent. The NSE Oil & Gas Index dropped by 1.3 per cent. The NSE Industrial Goods Index slipped by 0.9 per cent while the NSE Insurance Index lost 0.3 per cent. The NSE Consumer Goods Index was the lone gainer with a gain of 0.4 per cent.

Expectedly, emerging corporate earnings appeared to be shaping the market direction. Forte Oil led the 27-stock losers’ list with a loss of N7.69 to close at N152. Forte Oil released its third quarter report for the period ended September 30, 2016 showing 34.7 per cent decline in net profit from N4.28 billion in third quarter 2015 to N2.8 billion in third quarter 2016. The decline was due to 183 per cent increase in tax provision from N1.0 billion to N2.84 billion. Profit before tax had risen marginally from N5.29 billion to N5.63 billion.

Turnover rose to N121.08 billion by September 2016 as against N91.62 billion recorded in comparable period of 2015. Gross profit also improved from N12.98 billion to N15.5 billion. Earnings per share dropped from N2.59 in 2015 to N2.26 in 2016, raising concerns among dividend-focused investors.

Other top losers were Seven-Up Bottling Company, which lost N3.50 to close at N154.50. Lafarge Africa declined by N1.21 to close at N45.60. Guaranty Trust Bank lost N1.14 to close at N22.86. PZ Cussons Nigeria dropped by 64 kobo to close at N18. Stanbic IBTC Holdings dropped by 60 kobo to close at N16.50. E-Tranzact lost 27 kobo to close at N5.14. Cement Company of Northern Nigeria dropped by 20 kobo to close at N5.50. BOC Gases lost 18 kobo to close at N3.52 while UACN Property Development Company declined by 17 kobo to close at N3.41 per share.

On the positive side, Nigerian Breweries led the 11-stock gainers’ list with a gain of N1.22 to close at N149.20. Mobil Oil Nigeria followed with a gain of N1 to close at N186. Guinness Nigeria rose by 32 kobo to close at N80.06. Dangote Sugar Refinery added 18 kobo to close at N6.50 while Nigerian Aviation Handling Company chalked up 13 kobo to close at N3.30 per share.

Total turnover was above average with the exchange of 380.75 million shares valued at N1.83 billion in 2,954 deals. Banking stocks dominated the top activities’ chart. Access Bank was the most active stock with a turnover of 158.10 million shares valued at N886.99 million. Diamond Bank followed with 79.56 million shares valued at N91.6 million while Fidelity Bank placed third with 28.8 million shares worth N24.5 million.

“As third quarter 2016 earnings reports trickle in, market performance remains dictated by investors’ expectations as well as short term trading momentum. Given our conservative outlook on earnings, we expect the market to close negative for the week,” Afrinvest Securities, which trades on the NSE, stated.

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