Nigerian equities broke away from the downside on Thursday as continuing improvement in global crude oil price raised hopes that Nigeria may waddle through its foreign exchange crisis. After two days of successive declines, quoted equities recorded an average gain of 1.14 per cent, equivalent to N91 billion in renewed bargain-hunting on Thursday.
The rebound at the stock market came as crude oil prices rose for the third consecutive day on Thursday on the back of talks that the first global deal in over a decade among oil-producing countries could help to clear a glut that has depressed prices for more than 18 months. Global crude oil price rose to about $34 per barrel on Thursday.
With more than two advancers for every decliner, the Nigerian market was clearly on the positive swing. The foreign exchange crisis triggered by the steep decline in crude oil price, which accounts for more than two-thirds of Nigeria’s incomes, has been a major factor in the mix of the dynamics pushing down the stock market.
The All Share Index (ASI)-a value-based common index that tracks prices of all quoted equities, firmed up to 23,598.85 points as against its opening index of 23,333.34 points. Aggregate market value of all quoted equities also rose from N8.025 trillion to close higher at N8.116 trillion. The uptrend helped to reduce the negative overhang with average year-to-date return now at -17.61 per cent.
FSDH Securities, a Lagos-based dealer on the Nigerian Stock Exchange (NSE), said the rebound at the stock market was driven by the gains recorded in the global oil market.
The large-cap stocks that led the declines in previous trading sessions were also quick to appreciate on Thursday, underlining their influence as most liquid and sought after stocks. Group and sectoral indices showed widespread positive sentiments. The NSE Banking Index appreciated by 3.3 per cent. The NSE Industrial Goods Index rose by 1.4 per cent. The NSE Consumer Goods Index appreciated by 0.8 per cent. However, the NSE Oil and Gas Index declined by 2.8 per cent while the NSE Insurance Index lost 1.0 per cent.
Nigerian Breweries led the 27-stock gainers’ list with a gain of N3.35 to close at N100. Dangote Cement followed with a gain of N1.90 to close at N129.40. Lafarge Africa added N1.16 to close at N80. Guinness Nigeria rose by N1 to close at N110. Ashaka Cement gathered 95 kobo to close at N24.95. Cadbury Nigeria rose by 83 kobo to close at N17.54. Zenith Bank added 56 kobo to close at N11.76. Guaranty Trust Bank rose by 41 kobo to close at N5.76. GlaxoSmithKline Consumer Nigeria appreciated by 39 kobo to close at N26.99 while Access Bank chalked up 35 kobo to close at N4.15 per share.
“We believe sentiments are currently being driven by bargain hunting and oil price movements, although the broader investor confidence remains weak. However, valuation of stocks in the market remains cheap for long term positioning,” Afrinvest Securities-a Lagos-based dealer on the NSE, stated.
Total turnover stood at 273.06 million shares worth N2.01 billion in 2,800 deals. African Alliance Insurance was the most active, in terms of volume of shares, with a deal for 61 million shares valued at N30.5 million. Guaranty Trust Bank was the second most active with 44.64 million shares worth N696.94 million in 261 deals while Zenith Bank placed third with a turnover of 33.35 million shares worth N388.83 million in 300 deals.
On the downside, Forte Oil led the 13-stock losers’ list with a drop of N15.67 to close at N297.83. Unilever Nigeria followed with a loss of N3.80 to close at N35.24. UAC of Nigeria dropped by 29 kobo to close at N20. Vitafoam Nigeria lost 14 kobo to close at N4.56. AXA Mansard Insurance declined by 11 kobo to close at N2.19 while Caverton Offshore Services Group slipped by 10 kobo to N1.95 per share.
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