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NSE RoundUp! Equities in cautious trades amidst budget politics

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NSE RoundUp! Equities in cautious trades amidst budget politics

Nigerian equities recorded a marginal decline of N9 billion in the immediate past week as the investing public continued to await the passage of the 2018 Appropriation Bill.

In the fifth month of the year, the Bukola Saraki-led National Assembly and the President Muhammadu Buhari’s government have been unable to conclude on the National Budget for the year, despite belonging to the ruling All Progressives Congress (APC).

Benchmark indices at the Nigerian Stock Exchange (NSE) indicated average week-on-week decline of 0.06 per cent at the weekend, equivalent to net capital depreciation of N9 billion. With this, the average year-to-date return for Nigerian equities moderated to 7.78 per cent.

The All Share Index (ASI)-the common value-based index that tracks share prices at the Exchange, declined from its week’s opening index of 41,244.89 points to close weekend at 41,218.72 points. Aggregate market value of all quoted equities dropped from the week’s opening value of N14.940 trillion to close the week at N14.931 trillion.

Sectoral indices showed a mixe of bargain-hunting and profit-taking, underlining the caution over macroeconomic risks despite the attractive valuation of Nigerian equities. With 37 advancers to 32 decliners for the week compared with 33 advancers and 41 decliners recorded in the previous week, the underlining bargain-hunting continued to spread but losses suffered by high-cap fast moving consumer goods companies and oil and gas companies overshadowed the overall market position.

Most sectoral indices closed the week negative, underlining the weight of the large-cap stocks. The NSE 30 Index, which tracks the 30 most capitalised companies, declined by 0.09 per cent. The NSE Insurance Index dropped by 0.96 per cent. The NSE Consumer Goods Index depreciated by 1.89 per cent while the NSE Oil and Gas Index dipped by 1.42 per cent. Meanwhile, the NSE Banking Index appreciated by 1.56 per cent while the NSE Industrial Goods Index rallied by 1.06 per cent.

Read also: NSE: Stocks end week on positive note with 0.27% gain

Dangote Flour Mills led the decliners, in terms of percentage, with a drop of 18.57 per cent to close at N11.40. Eterna declined by 13.03 per cent to close at N5.74. Prestige Assurance Co dropped by 11.76 per cent to close at 45 kobo. Dangote Sugar Refinery dropped by 11.21 per cent to close at N19. Regency Alliance Insurance Company dropped by 10 per cent to 27 kobo while Oando declined by 8.74 per cent to close at N8.35 per share.

On the upside, C & I Leasing led the advancers with a gain of 29.5 per cent to close at N1.80. Unity Bank rose by 20 per cent to close at N1.20. Veritas Kapital Assurance rallied by 17.86 per cent to close at 33 kobo. Cement Company of Northern Nigeria rose by 14.6 per cent to N22.35 while Beta Glass gathered 10.2 per cent to close at N83.20 per share.

Total turnover during the four trading sessions for the week stood at 1.331billion shares worth N20.835 billion in 18,695 deals compared with a total of 1.825 billion shares valued at N24.653 billion traded in 23,148 deals two weeks ago.

The financial services sector led the activity chart with 1.042 billion shares valued at N11.275 billion traded in 9,665 deals; thus contributing 78.32 per cent and 54.11 per cent to the total equity turnover volume and value respectively. The consumer goods sector followed with 84.124 million shares worth N4.322 billion in 3,691 deals while the third place was occupied by oil and gas sector with a turnover of 51.918 million shares worth N596.463 million in 2,307 deals.

The three most active stocks were United Bank for Africa Plc, Mutual Benefits Assurance Plc and Access Bank Plc, which accounted for 457.930 million shares worth N3.784 billion in 1,469 deals, contributing 34.41 per cent and 18.16 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 709,058 units of Exchange Traded Products (ETPs) valued at N3.845 million in 10 deals, compared with a total of 56,260 units valued at N376,387traded in six deals penultimate week.

In the debt segment, a total of 80,152 units of Federal Government and State Bonds valued at N82.543 million were traded in 14 deals compared with a total of 725 units valued at N660,984 traded in 10 deals two weeks ago.

In the global markets, transactions showed mixed performance across the regions. In United States of America, the S & P 500 Index declined by 0.6 per cent but its twin index-the NASDAQ appreciated by 0.9 per cent. United Kingdom’s FTSE All Share Index appreciated by 0.8 per cent. In Europe, Germany’s Xetra Dax Index rallied by 1.9 per cent while France’s CAC 40 Index rose by 0.6 per cent. China’s Shanghai Composite Index appreciated by 0.3 per cent Japan’s Nikkei 225 Index was flat while Hong Kong’s Hang Seng Index dipped by 1.2 per cent.

Most emerging and frontier markets closed negative. Brazil’s Ibovespa Index dropped by 3.4 per cent. Russia’s RTS Index declined by 1.8 per cent. India’s BSE Sens Index dropped by 0.2 per cent. In Africa, South Africa’s FTSE/JSE All Share Index inched up by 0.3 per cent Ghana’s GSE Composite Index rose by 0.4 per cent. However, Egypt’s EGX 30 Index and Kenya’s NSE 20 Index dropped by 1.6 per cent each, following the same downtrend with Nigerian equities.

Analysts expected the cautious outlook at the Nigerian stock market to continue with a topsy-turvy of bargain-hunting and profit-taking before the expected rally for second quarter earnings.

“In the coming week, we anticipate a positive performance anchored on buy interest in large and mid-cap stocks following largely positive first quarter 2018 earnings. However, we do not rule out the possibility of profit taking during the week,” Afrinvest Securities stated.

Analysts at Cordros Capital said the positive macroeconomic outlook holds good prospects for equities. According to analysts, the latest economic data suggests that output growth maintained a positive trajectory in the second quarter of the year, hence the likelihood of positive corporate performance in the three months to June.

Analysts noted that the execution of a bilateral currency swap agreement between the Central Bank of Nigeria (CBN) and Peoples Bank of China (PBoC) should facilitate trade and capital flows between the two major trading partners, pointing out that with China as Nigeria’s largest import market, the swap should have added effect of a reduction in currency volatility risk of a third currency.

“We look for return of gains on the bourse in the medium to long term, amidst fast-declining yields in the alternative fixed income market; more so, as macroeconomic fundamentals continue to impress,” Cordros Capital stated.

 

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