NSE Roundup! Forex delay hurts Nigerian equities

Nigerian and South African equities were the contrarian stocks in the main African stock markets last week as continuing delay in the release of the guidelines for the implementation of the flexible foreign exchange (forex) policy of the Central Bank of Nigeria (CBN) continued to haunt Nigerian equities.

For the second consecutive week, Nigerian equities closed in the negative with average loss of 1.45 per cent last week pushing the average year-to-date return at the Nigerian stock market deep into the negative at -4.92 per cent. Total net week-on-week loss for Nigerian equities’ investors stood at N138 billion last week.

The All Share Index (ASI)- the national gauge for the Nigerian equities market, declined to 27,232.62 points at the weekend as against its week’s opening index of 27,634.42 points. Aggregate market value of all quoted equities at the Nigerian Stock Exchange (NSE) dropped from its week’s opening value of N9.491 trillion to close at N9.353 trillion.

Afrinvest Securities- a Lagos-based dealer on the NSE, said the “domestic markets and business sentiments have been shaped to a large extent by expectations on exchange rate policy” noting that the second-week depression was due to investors’ wariness “on lingering delay in the release of the modalities for the operation of the proposed currency market flexibility”.

“The performance of the market during the week was broadly subdued by protracted delay by the CBN to announce the anticipated guidelines for the operation of the planned flexible foreign exchange market. We expect activities to remain lacklustre in the week ahead so long as the policy details remain unknown,” Afrinvest Securities stated.

The momentum of activities at the NSE also decreased considerably as total turnover stood at 959.92 million shares worth N7.87 billion in 17,561 deals last week as against a total of 1.26 billion shares valued at N11.58 billion that were traded in 17,434 deals two weeks ago.

Sectoral indices at the NSE showed widespread selling sentiments. The NSE 30 Index, which tracks the 30 most capitalised stocks, dropped by 1.51 per cent. The NSE Banking Index declined by 0.96 per cent. The NSE Consumer Goods Index recorded a negative return of -1.87 per cent. The NSE Premium Index, which tracks Dangote Cement, Zenith Bank and FBN Holdings, recorded the highest loss of 2.36 per cent. The NSE Industrial Goods Index declined by 1.50 per cent while the NSE Pension Index, which tracks 40 stocks screened in line with pension investment guidelines, recorded above average loss of 2.28 per cent. However, the NSE Insurance Index rose by 1.71 per cent while the NSE Oil and Gas Index appreciated by 1.97 per cent.

There were 41 losers against 27 gainers during the week while 112 stocks remained flat. Cadbury Nigeria recorded the highest loss, in percentage terms, of 9.71 per cent to close at N18.51. Airlines Services and Logistics followed with a drop of 9.38 per cent to close at N1.74. United Bank for Africa dropped by 9.11 per cent to close at N4.29. GlaxoSmithKline Consumer Nigeria lost 8.95 per cent to close at N18.21 while Union Bank of Nigeria declined by 8.59 per cent to close at N5 per share.

On the positive side, Unity Bank led the gainers with a gain of 30.43 per cent to close at N1.20. NEM Insurance followed with a gain of 24.68 per cent to close at 96 kobo. Union Dicon Salt rose by 15.69 per cent to close at N14.38. Neimeth International Pharmaceuticals rose by 13.92 per cent to 90 kobo while Oando rallied 13.64 per cent to close at N7 per share.

Turnover analysis showed that financial services sector accounted for 81.5 per cent of turnover volume with 782.48 million shares valued at N4.11 billion traded in 10,477 deals. The conglomerates sector staged a distant second with 59.43 million shares worth N99.62 million in 762 deals. The consumer goods sector placed third with a turnover of 46.55 million shares worth N2.83 billion in 2,703 deals.

The three most active stocks were United Bank for Africa Plc, FBN Holdings Plc and Access Bank Plc, which altogether accounted for 288.69 million shares worth N1.275 billion in 3,854 deals, representing 30.07 per cent of the aggregate turnover for the week.

Also, a total of 78,666 units of Exchange Traded Products (ETPs) valued at N866, 656 were traded in 25 deals last week as against a total of 6,500 units valued at N117, 637 traded in 24 deals in previous week.

In the debt segment, a total of 4,725 units of Federal Government bonds valued at N5.266 million were traded in three deals compared to a total of 151,970 units of Federal Government and Corporate Bonds valued at N170.962 million traded in five deals in the previous week.

The decline at the Nigerian stock market was contrary to the upswing in many tracked major African markets, but it fell broadly within the general declines in the global stock markets.

In Africa, it was a mixed performance. The Egyptian EGX Index rose by 1.8 per cent.  The Kenyan Nairobi Stock Exchange Index rose by 0.4 per cent while Ghana Stock Exchange Index inched up by 0.1 per cent. However, South Africa’s Johannesburg Stock Exchange/FTSE Index declined by 2.0 per cent.

In the United States, the S &P 500 Index appreciated by 0.1 per cent while the NASDAQ Index dropped by 0.6 per cent.

In Europe, the United Kingdom FTSE Index declined by 1.4 per cent. France’s CAC Index and Germany’s DAX Index dropped by 2.3 per cent each. In Asia, it was a mixed market. The Hong Kong Hang Seng rose by 0.5 per cent while Japan’s Nikkei Index declined by 0.2 per cent. In the emerging economies, Russian RTS Index rose by 1.1 per cent. Brazil Ibovespa fell by 0.9 per cent. China’s main index dropped by 0.4 per cent while the Indian Bombay Stock Exchange Index dropped by 0.8 per cent.

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