NSE LIVE! Equities trudge on mixed corporate earnings

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Nigerian equities recorded a modest week-on-week gain of 0.60 per cent, equivalent to N61 billion, last week as a large inflow of corporate earnings reports failed to quicken investors’ appetites for quoted shares.
Not less than 27 quoted companies submitted their earnings reports last week, signaling the beginning of earnings season where all companies are expected to submit their nine-month interim earnings reports for regulatory review and onward dissemination to the investing public.
Third-quarter earnings reports are generally regarded as signposts to the end-year performance and as such, have greater influence on portfolio management and share pricing trend.
Investors’ response to earnings reports last week was muted and largely negative. The positive overall was driven by gains by large-cap stocks. The All Share Index (ASI)-the value-based common index that tracks prices of all quoted companies on the Nigerian Stock Exchange (NSE), closed the week at 30,011.89 points, 0.60 per cent above its week’s opening index of 29,834.21 points.
Aggregate market value of all quoted companies also rose from its week’s opening value of N10.253 trillion to close the week at N10.314 trillion, representing a gain of N61 billion. There were 26 gainers against 37 losers last week, a relatively worse performance than the previous week when 29 equities appreciated and 39 equities depreciated. Total of 127 stocks closed flat last week as against 122 stocks that were static during the previous week.
The performances of group indices were also mixed. While most indices finished higher during the week, the trio of NSE Insurance, NSE Consumer Goods and NSE Lotus Islamic indices declined by 0.81%, 0.49% and 0.42% respectively.
The momentum of activities also showed no significant increase than the previous week. Total turnover last week stood at 992.719 million shares worth N13.121 billion in 14,252 deals as against a total of 949.675 million shares valued at N10.280 billion traded in 14,833 deals two weeks ago. The financial services industry, measured by volume, led the activity chart with 712.270 million shares valued at N4.989 billion traded in 7,921 deals; thus contributing 71.75% and 38.02% to the total equity turnover volume and value respectively. The oil and gas industry followed with a turnover of 124.811 million shares worth N1.959 billion in 1,695 deals. The third place was occupied by the industrial goods industry with 47.275 million shares worth n2.754 million in 606 deals.
The three most active stocks-Oando Plc, Access Bank Plc and Zenith International Bank Plc accounted for 290.740 million shares worth N3.073 billion in 2,941 deals, contributing 29.29% and 23.42% to the total equity turnover volume and value respectively.
Besides common shares, also traded during the week were a total of 1.378 million units of Exchange Traded Products (ETPs) valued at N11.573 million executed in 121 deals compared with a total of 3,740 units valued at N2.035 million transacted in 19 deals in the previous week.
There was no transaction recorded on bonds last week. However, a total of 679.99 million and 371.93 million units were added to the 14.20% FGN MAR 2024 and 15.54% FGN FEB 2020 Nigerian sovereign bonds respectively.
Analysts at Afrinvest Securities noted that the first nine months of this year had been characterized by macroeconomic headwinds. Added to this, the banking industry faced hawkish regulations that generally constrained banks’ capacity to create risk assets and trade within a fully functional foreign exchange market. Furthermore, the directive by the President on the full implementation of the Treasury Single Account (TSA) tightened liquidity in the financial system and inevitably jerked up interbank money market rates — having reached year highs of over 100.0%.

Read also: NSE LIVE! More corporate earnings fail to halt equities’ slide

According to analysts, the earnings outlook has also been clouded by the absence of clear-cut fiscal economic policy direction to complement the monetary stimulus, thus the risk appetite of investors and deposit money banks has remained relatively weak.
Afrinvest Securities said share prices this week will continue to mirror the third quarter earnings of quoted companies, with the momentum expected to remain weak.

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