Investors showed strong preference for low-priced stocks, otherwise known as penny stocks, as Nigerian equities reopened on Monday with a modest recovery amidst a tight balance of bargain-hunting and profit-taking.
Low-priced stocks in the financial services, pharmaceutical and conglomerate sectors dominated activities at the stock market with many penny stocks posting above-average gain and pooling the largest volume of trade.
With 26 advancers and decliners each, the overall market position at the Nigerian Stock Exchange (NSE) rode on increasing gains by small and mid-tier stocks and a strong rally within the most-capitalised stocks’ group to mitigate equally spread profit-taking trend.
Benchmark indices indicated a day-on-day average gain of 0.51 per cent on Monday, equivalent to net capital gain of N79 billion. The recovery, after a dip on Friday, nudged the average year-to-date return at the equities market to 12.75 per cent.
Aggregate market value of all quoted equities at the NSE rose from its opening value of N15.368 trillion to close at N15.447 trillion. The All Share Index (ASI)-the common value-based index that tracks share prices at the Exchange also rose from its opening index of 42,898.90 points to close at 43,119.00 points.
Despite the positive overall market position, all sectoral indices closed negative with the exception of the NSE Banking Index which appreciated by 1.1 per cent. The NSE Industrial Goods Index declined by 1.6 per cent. The NSE Insurance Index dropped by 1.0 per cent. The NSE Oil & Gas Index declined by 0.8 per cent while the NSE Consumer Goods Index dipped by 0.1 per cent.
Low-priced stocks recorded the highest gains, in percentage terms, with many closing on Monday at their highest values in the past one year. FCMB Group recorded the highest percentage gain of 9.84 per cent to close at a 52-week high of N2.79. Skye Bank Plc followed with a gain of 8.33 per cent to close at a one-year high of 91 kobo. Caverton Offshore Support Group, Fidelity Bank and International Breweries rose by 5.0 per cent to close at N1.68, N3.36 and N63 respectively. Neimeth International Pharmaceuticals appreciated by 4.94 per cent to close at 85 kobo. Unity Bank rose by 4.88 per cent to close at 86 kobo while May & Baker Nigeria rallied by 4.84 per cent to close at N3.25 per share.
Low-priced stocks also dominated the activities chart, in terms of turnover volume. Total turnover stood at 730.62 million shares worth N6.30 billion in 7,964 deals. Transnational Corporation of Nigeria was the most active stock with a turnover of 193.9 million shares valued at N400.08 million. Diamond Bank followed with 85.66 million shares valued at N221.86 million while FCMB Group ranked third with 57.57 million shares worth N157.9 million.
Market analysts said they expected the rally that had dominated the stock market so far this year to be moderated by profit-taking transactions in the days ahead.
Analysts at FSDH Securities noted that although there might be profit taking on some stocks, the market should remain in positive territory, sustained by bargain hunting in anticipation of 2017 corporate earnings.
“Although the equities market performed positively today, we expect a largely mixed performance this week as we anticipate profit taking in sessions ahead,” Afrinvest Securities-a Lagos-based dealer at the Exchange, stated.
Value-based analysis meanwhile showed that Dangote Cement and International Breweries recorded the highest gain of N3 each to close at N255 and N63 respectively. Guaranty Trust Bank followed with a gain of N1.10 to close at N50.10. PZ Cussons Nigeria rose by N1 to close at N23.99. Zenith Bank added 74 kobo to close a N32 while Cement Company of Northern Nigeria rallied 58 kobo to close at N13.84 per share.
On the downside, Lafarge Africa recorded the highest loss of N2.84 to close at N54.06. Forte Oil dropped by N2.47 to close at N50.15. Nigerian Breweries declined by N1.97 to close at N149.08. Flour Mills of Nigeria lost N1.35 to close at N30. Dangote Sugar Refinery dipped by 97 kobo to close at N20.3 while UAC of Nigeria lost 88 kobo to close at N18.50 per share.
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