Nigerian equities staged a major recovery last week as investors upped demand for quoted shares amidst expectations of steady corporate earnings by the end of the third quarter.
Benchmark indices at the Nigerian Stock Exchange (NSE) showed considerable improvements in pricing trend and momentum of activities.
At the weekend, week-on-week average return stood at 1.38 per cent, equivalent to net capital gain of N166 billion for the five-day trading week. With this, the average year-to-date return rose to 32.05 per cent at the weekend.
Turnover volume and value rose by 22.2 per cent and 16.2 per cent respectively as investors traded a total of 1.096 billion shares worth N17.86 billion in 16,070 deals last week as against a total of 896.618 million shares valued at N15.368 billion traded in 17,048 deals in the previous week. The financial services sector topped the activity chart with 880.597 million shares valued at N13.614 billion traded in 8,994 deals; representing 80.33 per cent and 76.2 per cent of the total equity turnover volume and value respectively. The industrial goods sector staged a distant second position with 69.17 million shares worth N676.25 million in 881 deals while the consumer goods sector recorded a turnover of 49.29 million shares worth N2.87 billion in 3,077 deals.
The three most stocks were Guaranty Trust Bank Plc, Access Bank Plc, Jaiz Bank Plc, which altogether accounted for 450.567 million shares worth N10.942 billion in 1,834 deals, representing 41.1 per cent and 61.27 per cent of the total equity turnover volume and value respectively.
The increased activity also saw improved valuation of many equities, especially within the large-cap stocks in the influential banking and industrial goods sectors. Aggregate market value of all quoted equities rose from the week’s opening value of N12.068 trillion to close at N12.234 trillion. The All Share Index (ASI)-the common value-based index that tracks share prices at the Exchange, rose from the week’s opening index of 35,005.57 points to close weekend at 35,488.81 points.
Most sectoral indices closed on the positive side. The positive overall market situation was driven largely by rallies within the large-cap banking and industrial goods companies. The NSE 30 Index-which tracks Nigeria’s 30 most capitalised stocks, rose by 1.03 per cent last week. The NSE Banking Index posted a return of 2.39 per cent. The NSE Industrial Goods Index appreciated by 2.94 per cent while the NSE Insurance Index rose by 1.41 per cent. However, the NSE Consumer Goods Index declined by 0.23 per cent while the NSE Oil and Gas Index slumped by 3.05 per cent.
There were 25 advancers against 35 decliners last week as against 23 advancers and 45 decliners recorded two weeks ago. Linkage Assurance recorded the highest gain of 11.86 per cent to close at 66 kobo. Continental Reinsurance rose by 9.79 per cent to close at N1.57. Guaranty Trust Bank appreciated by 7..03 per cent to close at N39.60. C & Leasing rose by 6.72 per cent to close at N1.27. Skye Bank rose by 5.77 per cent to 55 kobo while Unilever Nigeria Plc rose by 5.50 per cent to close at N44.10 per share.
On the downside, Nigerian Enamelware recorded the highest drop of 16.65 per cent to close at N23.23. Caverton Offshore Support Group dropped by 9.17 to close at N1.09. Neimeth International Pharmaceuticals declined by 8.57 per cent to close at 64 kobo. Transnational Corporation of Nigeria lost 7.52 per cent to close at N1.23. Cutix slipped by 7.33 per cent to close at N2.53 while AIICO Insurance dropped by 6.90 per cent to close at 54 kobo.
Also traded during the week were a total of 58 units of Exchange Traded Products (ETPs) valued at N90,475 executed in five deals compared with a total of 1,265 units valued at N145,720 transacted last week in eight deals..
A total of 178 units of Federal Government bonds valued at N163, 407 were traded in two deals compared with a total of 5,290 units valued at N5.030 million traded in 15 deals in the previous week.
Most global equities also closed last week on a positive note. In United Kingdom, the UK FTSE rose by 0.7 per cent. Japan’s Nikkei Index posted a return of 1.9 per cent. France’s CAC Index rose by 1.4 per cent. Germany’s DAX Index appreciated by 0.9 per cent. South Africa’s FTSE/JSE Index inched up by 0.3 per cent. Russia’sRTS Index rose by 0.1 per cent while Egypt’s EGX 30 Index rallied 1.9 per cent gain.
However, United States of America’s NASDAQ Index dipped by 0.4 per cent while its twin index, the S & P 500 Index was flat. India’s BSE SENS Index declined by 1.1 per cent. Brazil’s IbovespaIndex slipped by 0.2 per cent. China’s Shanghai Composite Index was unchanged. Ghana’s GSE Composite Index dropped by 1.3 per cent while Kenya’s NSE 20 Index dipped by 0.2 per cent.
Analysts at Afrinvest Securities noted that as the third quarter draws to a close this week, the stock market may continue on the upside as fund managers strive to rebalance their portfolios.
Afrinvest Securities stated that the meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), which is scheduled between Monday and Tuesday, will not adversely impact the market as the apex bank is expected to maintain status quo. “We believe MPC would maintain status quo on all rates given the need to consolidate gains on stabilizing foreign exchange and inflation rates,” Afrinvest Securities stated. This implies that the Monetary Policy Rate (MPR) will remain at 14.0 per cent, Cash Reserve Ratio at 22.5 per cent, Liquidity Ratio at 30.0 per cent and Asymmetric corridor around MPR at +200 and -500 basis points.
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