NSE LIVE! Equities start new month with losses

For every stock that recorded modest gain, there were more than two losers yesterday as the Nigerian stock market reopened for the November trading sessions after losing N701 billion in October.
With 27 losers to 11 gainers, the Nigerian stock market continued to show widespread selling sentiments in spite of several pundits’ consensus that Nigerian equities have become significantly undervalued.
The main indices at the Nigerian Stock Exchange (NSE)-the All Share Index (ASI) and aggregate market value of all quoted equities, indicated low investors’ appetite with volumes of trade being driven by price depreciation.
ASI- a general value-based index that tracks prices of all quoted equities, indicated average day-on-day decline of 0.14 per cent, dropping from its opening index of 29,177.72 points to close at 29,136.85 points.
Aggregate market value of all quoted equities dropped by N14 billion from its opening value of N10.028 trillion to close at N10.014 trillion. With 27 losers to 11 gainers, the market was visibly on a low trend with volumes of trade being driven by price discounts. Total turnover stood at 308.12 million shares worth N2.97 billion in 2,894 deals.
Sectoral indices also showed widespread selling sentiments across the sectors. Besides the NSE Banking Index which gained 1.0 per cent, all other sectoral indices closed negative. The NSE Insurance Index dropped by 1.1 per cent. The NSE Oil & Gas Index slipped by 0.6 per cent. The NSE Consumer Good Index dropped by 0.4 per cent while the NSE Industrial Goods Index declined by 0.3 per cent.
The Monday decline nudged the average year-to-date return at the stock market to -15.93 per cent, implying inflation adjusted return of -25.33 per cent, given the current inflation rate of 9.4 per cent.
“We believe market performance remained negative given the current unimpressive earnings releases and regulatory sanctions on some key stocks in the market. Given the prolonged negative trend in the market in recent sessions, we imagine the likelihood of an uptrend in the market in the near term as bargain-hunters position for short term gains,” Afrinvest Securities stated in post-trading review.
Nestle Nigeria, NSE’s highest-priced equity, led the losers’ list with a loss of N4.01 to close at N821. Unilever Nigeria followed with a drop of N1.933 to close at N36.75. UAC of Nigeria declined by N1.32 to close at N25.16. Guinness Nigeria dropped by N1.25 to close at N123.75. Dangote Cement lost N1.03 to close at N162. Nigerian Breweries dropped by 35 kobo to N136.50. Union Bank slipped by 28 kobo to close at N5.52 while Ikeja Hotels declined by 17 kobo to close at N3.41.
On the upside, PZ Cussons Nigeria recorded the highest gain of 99 kobo to close at N24.99. Flour Mills of Nigeria followed with a gain of 89 kobo to close at N22.05. Guaranty Trust Bank added 51 kobo to close at N23.60. Berger Paints Nigeria rose by 33 kobo to close at N10.10. Zenith Bank gathered 30 kobo to close at N17.90 while Ecobank Transnational Incorporated chalked up 29 kobo to close at N18.89 per share.
The negative opening trading session yesterday further raised investors’ anxiety after the market lost N701 billion in October as share prices of quoted equities continued to fall in spite of the inflow of much expected third quarter earnings of companies and the impending constitution of the executive cabinet of President Muhammadu Buhari.
While many had hoped that the last quarter would see a stem of the negative tide that had ruled the market for the most part of this year, the immediate past month appeared to have set the fourth quarter on a negative footing, worsening the average year-to-date performance.
Several quoted companies have continued to hit their lowest prices in the past one year while a large segment of stocks have stagnated at nominal value, underlining the widespread downtrend at the stock market.
Aggregate market value of all quoted equities on the NSE closed October at N10.028 trillion as against its opening value of N10.729 trillion for the month, representing a loss of N701 billion.
The benchmark index at the NSE, the ASI, closed at the month at 29,177.72 points as against its opening index of 31,217.77 points for the month, representing a decline of 6.53 per cent.
In the last week of the month, the ASI depreciated by 2.78 per cent. There were 51 decliners to 12 gainers while 127 stocks closed flat. Increased supply fuelled momentum of activities, albeit on the negative side, as turnover rose to 1.358 billion shares worth N14.722 billion in 14,772 deals last week as against a total of 992.719 million shares valued at N13.121 billion traded in 14,252 deals two weeks ago.

Read also: NSE LIVE! Equities in marginal recovery as selling sentiments linger

Year-to-date analysis indicated that average investors might have lost 15.81 per cent of their investments in the first 10 months of this year, which aggregated to a total market loss of approximately N1.5 trillion. Aggregate market value of quoted companies on the Nigerian Stock Exchange (NSE) closed October at N10.028 trillion, representing a loss of N1.45 trillion or 12.63 per cent from the year’s opening value of N11.478 trillion.
The ASI closed at the weekend at 29,177.72 points as against its opening index of 34,657.15 points for the year, representing a decline of 15.81 per cent. With inflation rate at 9.4 per cent, inflation-adjusted average year-to-date return at the Nigerian stock market now stands at -25.21 per cent, simply implying that average investors have lost more than a quarter of the real value of their investments.
Several equities across the sectors closed at their lowest prices in the past one year including Julius Berger Nigeria, Oando, Eterna, Northern Nigerian Flour Mills, MRS Oil and Gas, Scoa Nigeria, Transnational Corporation of Nigeria, Dangote Flour Mills, International Breweries and UACN Property Development Company (UPDC) among others.
Most stocks in the top-league sectors of banking, insurance, healthcare, oil and gas, and food and beverages sectors are trading around their lowest prices over the 52-week period. These included leading stocks such as UAC of Nigeria, Flour Mills of Nigeria, Cadbury Nigeria, Access Bank, FBN Holdings, Union Bank of Nigeria, Diamond Bank, Fidelity Bank, Seplat Petroleum Development Company, May & Baker Nigeria and Skye Bank Plc among others. More than a quarter of quoted stocks, especially in the largely dormant insurance and other non-banking financial services sectors, have stagnated at nominal value, in most cases 50 kobo.
The performance so far is hitting hard investors, who had been at the top-end of the global decline last year. Nigerian equities had ranked among the worst-performing stocks globally in 2014 with average full-year decline of 16.14 per cent. Aggregate market value of all quoted equities closed 2014 at N11.477 trillion as against its opening value of N13.226 trillion for the year, indicating a loss of N1.75 trillion during the year.
Against the opening value for 2014, the current market value of all quoted equities represents a loss of N3.2 trillion over the 22-month period.
Sectoral analysis showed widespread losses. The NSE Premium Index, which tracks the trio of Dangote Cement, FBN Holdings and Zenith Bank International, indicated a 10-month return of -14.10 per cent. The NSE 30 Index, which tracks the 30 most capitalised stocks on the NSE, recorded average decline of 15.57 per cent. The NSE Pension Index, which tracks 40 stocks specially screened for pension investments, indicated average return of -13.70 per cent. Others returns included NSE Banking Index, -12.15 per cent; NSE Insurance Index, -6.63 per cent; NSE Consumer Goods Index, -17.20 per cent; NSE Oil and Gas Index, -10.54 per cent; NSE Industrial Goods Index, -1.67 per cent while NSE Main Board Index and NSE Lotus Islamic Index recorded -15.09 per cent and -12.64 per cent respectively.

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