Nigerian equities reopened on Monday with continuing bargain-hunting for undervalued dividend-paying stocks amidst caution that the longest rally this year might give way to another round of profit-taking and decline.
With nearly two gainers to every loser, the market showed widespread bargain-hunting for low-priced equities. There was however a slowdown in the momentum of activities as well as quantum of gains, underlining the caution that has built up as equities move from one level to another higher level.
The All Share Index (ASI)-the value-based index that tracks prices of all quoted equities on the Nigerian Stock Exchange (NSE), rose by 0.27 per cent, equivalent to a gain of N24 billion. The ASI, which opened this week at 25,820.10 points, closed the first trading session at 25,890.94 points.
Aggregate market value of all quoted equities rose from N8.882 trillion to close at N8.906 trillion, representing an increase of N24 billion. The negative overhang at the stock market reduced with average year-to-date return improving to -9.61 per cent.
With 20 gainers to 12 losers, the market performance was driven by widespread gains. Sectoral indices underscored the spread of the rally. The NSE Insurance Index rose by 0.9 per cent. The NSE Oil & Gas Index and NSE Banking Index rose by 0.5 per cent each while the NSE Consumer Goods Index closed flat.
Total Nigeria led the gainers with a gain of N5.20 to close at N142.95. International Breweries rose by 90 kobo to close at N19.05. Stanbic IBTC Holdings added 25 kobo to close at N14.40. Custodian and Allied chalked up 18 kobo to close at N3.89. Oando and Tiger Branded Consumer Goods rose by 17 kobo each to close at N3.66 and N1.89 respectively. FBN Holdings gathered 15 kobo to close at N3.65. Sterling Bank rose by 12 kobo to close at N1.75 while Fidson Healthcare and AXA Mansard added 10 kobo each to close at N2.40 and N2.14 respectively.
On the other hand, Union Dicon Salt led the losers with a loss of 59 kobo to close at N11.25. Dangote Sugar Refinery and Vitafoam Nigeria followed with a drop of 21 kobo each to close at N5.70 and N4.15 respectively. Nascon Allied Industries declined by 18 kobo to close at N7.17 per share. UAC of Nigeria declined by 14 kobo to close at NN19.96 while Ikeja Hotel lost 13 kobo to close at N2.60 per share.
Total turnover stood at 186.38 million shares worth N1.31 billion in 3,106 deals. Zenith Bank was the most active stock with a turnover of 25.46 million shares worth N310.46 million in 344 deals. Fidelity Bank followed with a turnover of 25.31 million shares valued at N29.08 million in 76 deals. FBN Holdings placed third with a turnover of 19.87 million shares valued at N72.02 million in 361 deals.
“The equity market appreciated further today as investors continued to take strategic positions in some value stocks ahead of their corporate earnings and dividends declaration,” analysts at FSDH Securities stated.
Analysts at Afrinvest Securities said that sustained optimism in the market was driven by positive sentiments toward banking stocks as banks prepare to release their audited report and accounts.
“While we expect more corporate announcements to drive activities this week as more players in the banking and consumer goods space submit their scorecards for 2015, we also see some profit taking following last week’s bargain hunting. Against this backdrop, we advise investors to overweigh on stock with consistent dividend paying history,” Afrinvest Securities stated.
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