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NSE ROUND-UP! Equities gain N304bn as investors scout for banks, building materials in Q3 earnings rally

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NSE LIVE! Equities lose N141bn as CBN holds interest rate high

As quoted companies prepare to release their third quarter results, investors appeared to be placing their higher stakes on banking and building materials stocks. A generally positive anticipatory trading saw Nigerian equities ending the first week of the fourth quarter with a net capital gain of N285 billion, consolidating the positive momentum that saw equities with net capital gain of N756 billion in the third quarter.

Banking and industrial goods stocks headlined the rally at the Nigerian Stock Exchange (NSE) with above average gains. All major indices at the stock market showed a positive market situation with the benchmark index sustaining upswing in the last three consecutive trading sessions. Turnover also rose considerably as the bargain-hunting thickened around value stocks.

The All Share Index (ASI)-the common value-based index that tracks share prices at the Exchange, closed the weekend with average-week-on-week gain of 2.49 per cent, equivalent to capital gain of N304 billion. However, the cancellation of shares by United Bank for Africa (UBA) reduced the net capital gain to N285 billion. A total volume of 2.080 billion ordinary shares of UBA were cancelled during the week, pursuant to a resolution passed at UBA’s annual general meeting in April 2016 to cancel the shares held by its Staff Share Investment Trust Scheme (SSITS).

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The ASI –which doubles as Nigerian sovereign equities index rallied to 36,320.93 points at the weekend as against its week’s opening index of 35,439.98 points. Aggregate market value of all quoted equities on the NSE also trended upward to close weekend at N12.502 trillion as against the week’s opening value of N12.217 trillion. The upswing nudged the average year-to-date return for Nigerian equities to 35.15 per cent at the weekend.

Industrial goods stocks-largely driven by cement manufacturers, and banking stocks were the toasts of the investing public. The NSE Industrial Goods Index more than doubled the average gain with a week-on-week return of 6.15 per cent. The NSE Banking Index also recorded above-average return of 3.17 per cent. The NSE 30 Index-which tracks the 30 most capitalised stocks, rose by 2.77 per cent. The NSE Consumer Goods Index appreciated by 1.42 per cent while the NSE Oil and Gas Index posted a gain of 1.80 per cent. However, the NSE Insurance Index was the contrarian with a decline of 1.21 per cent.

Pricing trend underlined considerable improvement in investors’ appetite for equities. There were 38 advancers against 26 decliners last week compared with a tie of 32 advancers and 32 decliners recorded in the previous week. A total of 107 stocks have remained flat in the past two weeks, underlining the fact that market performance were being driven by about one-third of the total size.

C & I Leasing-which had recently indicated plan to raise new equity funds, led the rally, in percentage terms, with a gain of 19.6 per cent to close at N1.95. Caverton Offshore Support Group followed with a gain of 18.3 per cent to close at N1.23. Presco rose by 15.3 per cent to close at N68. Lafarge Africa chalked up 13.1 per cent to close at N57.31. Nigerian Aviation Handling Company appreciated by 10 per cent to close at N3.41 per share. United Bank for Africa rose by 9.26 per cent to N9.44. Linkage Assurance appreciated by 8.7 per cent to 75 kobo. NPF Microfinance Bank added 7.2 per cent to close at N1.19. Vitafoam Nigeria rose by 7.17 per cent to close at N2.69 while Zenith Bank appreciated by 6.88 per cent to close at N25.01.

On the negative side, MRS Oil & Gas led the decliners with a loss of 14.1 per cent to close at N27.46. Continental Reinsurance dropped by 12 per cent to N1.32. P Z Cussons Nigeria declined by 9.4 per cent to close at N23.55. Unity Bank dropped by 8.3 per cent to close at 55 kobo. Cadbury Nigeria declined by 6.0 per cent to close at N10.33 per share. Jaiz Bank declined by 5.7 per cent to close at 66 kobo. Cutix dropped by 4.8 per cent to close at N2.38. Sterling Bank dipped by 4.76 per cent to close at N1. GlaxoSmithKline Consumer Nigeria dropped by 4.55 per cent to N21 while Law Union & Rock Insurance declined by 4.3 per cent to close at 89 kobo.

The momentum of activities quickened during the week with total turnover rising to 1.49 billion shares worth N15.11 billion in 14,549 deals last week, as against a total of 1.33 billion shares valued at N14.09 billion traded in 14,703 deals in the previous week. The financial services sector led the activity chart with 1.29 billion shares valued at N10.12 billion traded in 8,334 deals; representing 86.3 per cent and 66.99 per cent to the total equity turnover volume and value respectively. The consumer goods sector staged a distant second on the activities chart with 89.259 million shares worth N3.154 billion in 2,760 deals. The conglomerates sector ranked third with a turnover of 49.36 million shares worth N113.74 million in 491 deals.

Banking stocks were the most active stocks. The three most active stocks- FCMB Group Plc, Diamond Bank Plc and FBN Holdings Plc accounted for 659.042 million shares worth N1.312 billion in 1,933 deals, representing 44.14 per cent and 8.69 per cent of the total equity turnover volume and value respectively.

A deal was also struck for a total of 2,000 units of Exchange Traded Products (ETPs) valued at N34,000 during the week as against a total of 274 units valued at N636,148 traded in18 deals in the previous week.
In the sovereign debt segment, a total of 2,360 units of Federal Government Bonds valued at N2.03 million were traded this week in seven deals, compared with a total of 7,424 units valued at N6.69 million traded in 18 deals in the previous week.

“In the coming week, we expect market performance to maintain its positive momentum, buoyed by anticipated release of third quarter 2017 earnings results,” Afrinvest Securities-a Lagos-based dealer at the NSE, stated in a weekend investment note.

 

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