NSE Roundup! Equities sustain rally amidst global stock decline

Nigerian equities muffled a mid-week profit-taking to sustain their upwardly trend last week, playing the contrarian stocks in a global stock market characterized by declines across the advanced and emerging markets.

There were more gainers and losers last week as investors continued bargain-hunting for low-priced and dividend-paying stocks ahead of the March 31, 2016 deadline for submission of audited report and accounts of quoted companies.

Post-listing rules of the Nigerian Stock Exchange (NSE) requires all quoted companies to submit their annual report and accounts for a full business year not later than three months after the end of the period. Most companies at the NSE run the Gregorian calendar year as their business year, thus the deadline for the submission of the 2015 earnings report is March 31, 2016.

Market pundits expect the submission of annual report and dividend recommendation to gather momentum as from this week, rising gradually to pick in the last days of the months. Wapic Insurance last week declared a dividend per share of three kobo.

The bargain-hunting for stocks with immediate good dividend prospects accentuated increasing demand for undervalued stocks with mid to long-term potential, especially in the banking sector, to sustain the positive overall market situation, in spite of the tendency to take profits on the capital gains built up in the past 11 trading sessions.

The All Share Index (ASI), value-based common-share index that tracks the prices of all quoted equities recorded a week-on-week return of 0.65 per cent to close at 25,988.40 points as against its week’s opening index of 25,820.10 points. Aggregate market value of all quoted equities also rose by N58 billion to close at N8.940 trillion as against its opening value of N8.882 trillion for the week. With these, average year-to-date return at the stock market, though still negative, improved to -9.27 per cent.

There were 39 gainers against 22 losers last week as against 35 gainers recorded against 24 losers in the previous week. However, the larger part of the market closed flat with 128 stocks unchanged last week compared with 130 stocks in previous week.

Group and sectoral analysis showed widespread positive sentiments across the market. The NSE Banking Index recorded a weekly gain of 2.35 per cent. The NSE Insurance Index also appreciated by 1.78 per cent. The NSE Consumer Goods Index inched up by 0.96 per cent. The NSE Oil & Gas Index rose by 4.41 per cent.

Also, the NSE Main Board Index, which tracks all first-tier equities except the trio of Dangote Cement, Zenith Bank International and FBN Holdings, recorded a weekly gain of 2.06 per cent. The NSE 30 Index, which tracks the 30 most capitalised stocks, returned 1.15 per cent. The NSE Pension Index appreciated by 4.01 per cent  while the NSE Lotus Islamic Index, which tracks stocks that comply with Islamic investment rules, inched up by 0.09 per cent. However, the NSE Premium Index and the NSE Industrial Index dropped by 1.65 per cent and 0.15 per cent respectively.

Total turnover last week stood at 1.11 billion shares worth N7.45 billion in 15,562 deals compared with a total of 1.476 billion shares valued at N7.99 billion traded in 15,743 deals in the previous week.

The financial services sector remained the most active sector with a turnover of 900.27 million shares valued at N3.83 billion traded in 10,216 deals; representing 81 per cent of total turnover volume. The conglomerates sector staged a distant second with a turnover of 72.52 million shares worth N92.22 million in 703 deals. The third place was occupied by the consumer goods sector with a turnover of 52.5 million shares worth N1.90 billion in 2,262 deals.

On stock by stock basis, Fidelity Bank was the most active stock with a turnover of 202.93 million shares valued at N234.94 million in 486 deals. FCMB Holdings followed with a turnover of 117.85 million shares valued at N94.37 million in 692 deals.

Read also: NSE LIVE! Equities gain N13b in cautious rally

Altogether, the trio of Fidelity Bank, FCMB Holdings and Zenith Bank International accounted for 427.85 million shares worth N1.65 billion in 2,795 deals, representing 38.5 per cent of total turnover volume.

The positive performance of Nigerian equities was contrary to the largely negative performance of the global stock markets last week. In the advanced markets, the United Kingdom’s FTSE Index declined by 0.9 per cent. In United States of America, the S&P 500 Index and NASDAQ Index dropped by 0.5 per cent and 0.9 per cent respectively. France’s CAC Index indicated a decline of 0.7 per cent. Germany’s XETRA DAX Index slipped by 0.9 per cent. Japan’s Nikkei Index also declined by 0.9 per cent while the Hong Kong’s HANG SENG Index dipped by 0.5 per cent.

In the five-country BRICS group, it was a mixed performance. Russia’s RTS Index appreciated by 2.0 per cent. Brazil’s IBOVESPA Index also rose by 1.0 per cent. India’s Bombay Stock Exchange Index rose by 0.6 per cent. However, China’s Shanghai Index declined by 2.7 per cent while South Africa’s FTSE/JSE Index dropped by 1.3 per cent.

African stock markets were largely contrarian to the global decline. Egypt’s EGX Index indicated a weekly average gain of 2.5 per cent. Kenya’s Nairobi Stock Exchange All Share Index rose by 0.2 per cent while Ghana Stock Exchange’s Composite Index inched up by 0.1 per cent.

The outlook for the Nigerian equities in the new trading week remained positive according to most analysts. Analysts at Afrinvest Securities said while the market outlook remains positive because of dividend expectations, there could be profit-taking activities given the built-up gains in recent trading sessions.

“In the week ahead, we expect performance to maintain recent momentum as investors bet on dividend announcements by key players, particularly within the banking and consumer goods spaces ahead of earnings releases,” Afrinvest Securities-a Lagos-based dealer on the NSE, stated.

 

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