NSE LIVE! Equities open negative as selling pressure builds again

After a two-day consecutive rally that closed the stock market last week, Nigerian equities opened this week in the red zone as widespread selling sentiments shaved share prices of most traded stocks.

With 23 losers to 15 gainers, aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) dropped from its opening value of N9.376 trillion to close at N9.345 trillion. The All Share Index (ASI)- a value-based index that tracks prices of all quoted equities, also declined by 0.33 per cent to close at 27,179.28 points as against its opening index of 27,269.71 points.
The decline pushed the negative average year-to-date return at the stock market to -21.58 per cent.

Seplat Petroleum Development Company topped the losers’ list with a loss of N7.35 to close at N217.35. Forte Oil followed with a loss of N6 to close at N242. Stanbic IBTC Holdings dropped by 79 kobo to close at N16.11. Okomu Oil Palm declined by 65 kobo to N29 while UAC of Nigeria lost 52 kobo to close at N23.68.

Total turnover stood at 417.84 million shares valued at N2.97 billion in 2,710 deals. The three most actively traded stocks were Champion Breweries, 100.08 million shares; Tiger Branded Consumer Goods, 63.47 million shares and FBN Holdings, which traded 53.63 million shares.

On the upside, Guinness Nigeria led the gainers with a gain of N2.45 to close at N127.45. Lafarge Africa placed second with a gain of N1.34 to close at N91.34. Flour Mills of Nigeria chalked up 53 kobo to close at N21 while Berger Paints Nigeria added 49 kobo to close at N10.34 per share.

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Analysts attributed the decline to weak investor sentiments, noting that the short-term outlook for the market remains largely negative.
“Given the general weak economic fundamentals at the moment, chances of an upward trend are bleak. However, while we expect some bargain hunting activities in the trading days ahead, we maintain our cautious view on short term investments and suggest a medium to long term horizon on stocks,” Afrinvest Securities, a Lagos-based dealer at the NSE, stated.

However, nearly all analysts agreed on the positive prospects of the market in the medium to long term.
Chuks Anyanwu, Head, Research and Strategy, GTI Securities noted that while the Nigerian economy continues to feel the pinch of oil price decline in the international oil market and resultant pressure has taken a toll on the capital market, the market has prospects for better performance in the years ahead given the current policies of the government.

“We are however still convinced that the opportunities in the Nigerian economy are more on the steps being taken to grow the economy than in the challenges. The proposed expansionary budget to jump start the economy and the 45% capital expenditure spending of the proposed budget will still be the major selling point for the country in 2016 fiscal year,” Anyanwu said.

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