Nigerian equities lost N135 billion last week in a month-end portfolio readjustments that saw investors tilting towards low-priced stocks, otherwise known as penny stocks. Low-priced stocks in the banking and agriculture sectors recorded the highest turnover during the four-day trading sessions.
The Nigerian equities market mirrored the global equities market last week with key indices closing in the red. Investors appeared cautious in rounding off the third month of the year but the prospects of high dividend yields for many penny stocks lured investors to low-priced stocks.
In spite of the increased momentum of submission of the earnings reports of quoted companies, the underlying selling pressure was still relatively high. There were 24 gainers against 37 losers last week at the Nigerian Stock Exchange (NSE) compared with 22 gainers and 38 losers in the previous week. However, the larger part of the market remained flat with 128 stocks unchanged last week as against 129 stocks that closed flat two weeks ago.
March 31, 2016 was the deadline for the submission of 2015 full-year report for quoted companies running the Gregorian calendar as their business year. Several companies turned in their earnings reports and dividend recommendations during the week to beat the deadline.
Aggregate market value of all quoted equities on the NSE dropped by N135 billion to close the week at N8.774 trillion as against its week’s opening value of N8.909 trillion. The All Share Index (ASI)-the value-based index that tracks prices of all quoted equities and doubles as sovereign index for Nigeria, declined by 1.52 per cent to close at 25,507.09 points compared with its week’s opening index of 25,899.91 points. Average year-to-date return at the stock market was up at -10.95 per cent.
Sectoral indices showed mixed performance. The NSE Premium Index, NSE Oil and Gas Index, NSE Lotus Islamic Index and the NSE Industrial Goods Index rose by 3.16 per cent, 2.06 per cent, 0.76 per cent and 0.25 per cent respectively. Conversely, the NSE Main Board Index, NSE 30 Index, NSE Banking Index, NSE Insurance Index, NSE Consumer Goods Index and NSE Pension Index declined by 3.40 per cent, 2.61 per cent, 7.98 per cent, 0.53 per cent, 4.14 per cent and 1.76 per cent respectively.
The trio of FCMB Group Plc, Sterling Bank Plc and Livestock Feeds Plc, which all trade around 100 kobo, accounted for 382.145 million shares worth N424.424 million in 1,019 deals, representing 30.27 per cent and 6.60 per cent of the total equity turnover volume and value respectively.
Total turnover stood at 1.26 billion shares worth N6.43 billion in 12,274 deals last week as against a total of 1.55 billion shares valued at N10.45 billion traded in 14,994 deals in the previous week. The financial services sector expectedly remained atop the activity chart with a turnover of 1.02 billion shares valued at N3.73 billion in 8,227 deals; representing 80.95 per cent and 58.11 per cent of the total equity turnover volume and value respectively. Agriculture sector followed with 105.069 million shares worth N129.307 million in 155 deals while conglomerates sector recorded a turnover of 40.758 million shares worth N58.455 million in 361 deals.
Also traded during the week were a total of 25,738 units of Exchange Traded Products (ETPs) valued at N522,245 executed in 39 deals, compared with a total of 118,976 units valued at N1.267 million traded in 20 deals in the previous week. A total of 22,030 units of Federal and State Government Bonds valued at N25.368 million were traded in eight deals compared to a total of 91,918 units of Federal Government Bonds valued at N100.479 million traded in seven deals in the previous week.
Vitafoam Nigeria led the gainers, in terms of percentage gain, last week with a gain of 14.8 per cent to close at N5.42. Oando followed with a gain of 14.50 per cent to close at N4.58. FCMB Group rallied by 11.25 per cent to close at 89 kobo. Total Nigeria rose by 9.86 per cent to close at N153.82 while International Breweries improved by 8.99 per cent to N20.49 per share.
On the negative side, United Capital recorded the highest loss of 35 per cent to close at N1.30. Transnational Corporation of Nigeria followed with a loss of 15.97 per cent to close at N1. United Bank for Africa declined by 15.87 per cent to close at N3.18. Zenith Bank dropped by 15.54 per cent to close at N10.98 while Tiger Branded Consumer Goods lost 13.33 per cent to close at N2.21 per share.
The performance of the Nigerian equities market last week fell broadly within the global market performance. From the emerging to advanced markets, equities indices closed mostly lower. In Europe, the United Kingdom’s FTSE Index declined by 0.1 per cent. France’s CAC Index dropped by 1.3 per cent. Germany’s DAX Index slipped by 1.4 per cent. The Japanese Nikkei dropped considerably by 4.9 per cent.
Performance was mixed in the five-nation emerging markets bloc of Brazil, Russia, India, China and South Africa (BRICS). Russia’s RTS Index dropped by 0.2 per cent. India’s Bombay Stock Exchange (BSE) Index declined by 0.3 per cent while South Africa FTSE Index slipped by 1.7 per cent. However, China Shangai Composite Index rose by 1.0 per cent while Brazil’s IBOVESPA Index rose by 0.8 per cent. Also, the Hong-Kong Hang Seng Index rose by 0.8 per cent.
It was a general downtrend in Africa. Kenya’s Nairobi Stock Exchange Index dropped by 0.5 per cent. Egypt’s EGX Index depreciated by 0.3 per cent while Ghana’s Ghana Stock Exchange Index dropped by 0.2 per cent.
However, in United States of America, it was a largely bullish market. The United States S & P 500 and NASDAQ Index rose by 1.2 per cent and 2.0 per cent respectively.
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