NSE LIVE! Equities sustain rally with N89b gain
Quoted equities sustained their recovery on Wednesday as investors sought to take advantage of the recent price depreciation to consolidate their portfolios. While the overall market situation was openly cautious with 24 advancers to 23 decliners, gains by many highly capitalised stocks boosted the market capitalisation.
Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) appreciated by N89 billion to close at N9.687 trillion as against its opening value of N9.598 trillion. The benchmark index for the stock market, the All Share Index (ASI), indicated average gain of 0.93 per cent to close at 28,205.62 points compared with its opening index of 27,945.02 points.
The rally, which started on Tuesday, improved the average year-to-date return to 1.52 per cent. The rally on Wednesday was driven by gains recorded by large-cap stocks such as Dangote Cement and Unilever Nigeria.
Dangote Cement, NSE’s most capitalised stock, recorded the highest gain of N5.06 to close at N180.06. MRS Oil recorded a gain of N3.26 to close at N35.19. Okomu Oil Palm added N3.22 to close at N34.73. Unilever Nigeria rose by N1.65 to close at N34.65 while CAP gathered N1.50 to close at N37.50.
Total turnover rose above average with the exchange of 488.89 million shares worth N4.83 billion in 4,713 deals. Banking stocks dominated the activities chart. The most active stock was United Bank for Africa (UBA) with a turnover of 127.33 million shares worth N584.82 million. Access Bank followed with a turnover of 111.84 million shares worth N626.55 million while FBN Holdings placed third with 62.87 million shares valued at N223.22 million.
On the negative side, Nigerian Breweries, NSE’s second most capitalised stock, led the losers with a loss of N6.54 to close at N140. Seven-Up Bottling Company and Lafarge Africa followed with a loss of N1 each to close at N133 and N58. Guinness Nigeria dropped by 99 kobo to close at N94 while Red Star Express dropped by 57 kobo to close at N4.23 per share.
Many analysts were however apprehensive that the recent hike in the benchmark interest rate from 12 per cent to 14 per cent by the Central Bank of Nigeria (CBN) could weaken investors’ appetite for quoted equities.
Analysts at Meristem Securities noted that while the rate hike and the impact of the recently implemented forex policy will boost activities within the fixed income market as yields become attractive to both local and foreign investors, the attractive yield environment could attract investors away from riskier equities investments, thus further pressuring the returns in the equities market.
Analysts at Capital Bancorp said companies under the burden on loans will come under more pressure as the cost of servicing their loans will significantly rise thereby increasing the pressure on their profit margins, especially in the face of slowed public and private expenditures.
“Listed companies who rely majorly on imported raw materials for their production will continue to grapple with the high cost of sales as a result of the continuous depreciation of the Naira,” Capital Bancorp stated.
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