NSE RoundUp! Investors scurry for safety in top-tier banks amidst slowdown

The release of much-expected third quarter earnings of leading quoted companies during the week failed to lift the momentum and pricing at the Nigerian stock market, with many investors appearing to be shifting portfolios in favour of top-tier banks.

Eleven companies submitted their third quarter 2017 earnings reports during the week including market-leading stocks such as Dangote Cement, Guaranty Trust Bank, Zenith Bank International, United Bank for Africa and Lafarge Africa. However, benchmark indices at the Nigerian Stock Exchange (NSE) showed a largely negative performance.

With turnover volume down by about 44 per cent, benchmark pricing indices showed average week-on-week decline of 0.71 per cent, equivalent to net capital depreciation of N90 billion. This depressed the average year-to-date return for Nigerian equities to 36.14 per cent.

All sectoral indices closed negative with the exception of the banking sector index, which was obviously lifted by bargain-hunting for top-tier stocks.

Aggregate market value of all quoted equities at the NSE dropped from its week’s opening value of N12.684 trillion to close the week at N12.594 trillion. The All Share Index (ASI)-the common value-based index that tracks share prices, declined to 36,587.31 points at the weekend as against its week’s opening index of 36,848.17 points.

The NSE Banking Index was the only contrarian index with a marginal gain of 0.03 per cent. All other sectoral indices closed in the red. The NSE 30 Index-which tracks the 30 most capitalised stocks dropped by 0.60 per cent. The NSE Insurance Index posted a week-on-week return of -3.64 per cent. The NSE Consumer Goods Index declined by 1.18 per cent. The NSE Oil and Gas Indexdropped by 1.75 per cent while the NSE Industrial Goods Index slipped by 0.68 per cent.

The momentum of activities also slowed down considerably, although the shift to high-priced banking stocks helped to keep turnover value higher. Total turnover slowed down to 872.89 million shares worth N14.016 billion in 19,047 deals last week compared with a total of 1.56 billion shares valued at N13.50 billion traded in 18,409 deals in the previous week.

The banking-led financial services sector remained the most active with 692.38 million shares valued at N8.94 billion in 11,464 deals; representing 79.32 per cent and 63.78 per cent of the total equity turnover volume and value respectively. The conglomerates sector staged a distant second with 63.66 million shares worth N123.15million in 896 deals. The consumer goods sector placed third with a turnover of 61.68 million shares worth N3.03 billion in 3,469 deals.

Three leading banks- Guaranty Trust Bank Plc, Zenith International Bank Plc and United Bank for Africa Plc, were the most active stocks during the week, accounting for 270.638 million shares worthN7.213 billion in 3,902 deals, representing 31.01 per cent and 51.47per cent of the total equity turnover volume and value respectively.

Also traded during the week were a total of 34,573 units of Exchange Traded Products (ETPs) valued at N2.091 million executed in 14 deals compared with a total of 60 units valued at N2,266 traded in six deals in the previous week.

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In the sovereign debt segment, a total of 7,279 units of Federal Government bonds valued at N7.14 billion were traded in 12 deals compared with a total of 1,041 units valued at N1.040 million traded in 10 deals in the previous week.

Further pricing analysis showed that there were 23 advancers and 34 decliners during the week as against 41 advancers and 23 decliners recorded in the previous week. A total of 114 stocks closed flat, within the range of 107 unchanged stocks recorded in the previous week.

International Breweries led the advancers, in percentage terms, with a gain of 21.77 per cent to close at N51.01. GlaxoSmithKline Consumer Nigeria followed with a gain of 14.3 per cent to close at N24. Cutix rose by 9.8 per cent to close at N2.60. Union Bank of Nigeria appreciated by 5.6 per cent to close at N6.07 while Stanbic IBTC Holdings rose by 5.5 per cent to close at N44.30 per share.

On the other hand, Red Star Express led the decliners with a drop of 13 per cent to close at N4.75. AXA Mansard Insurance dropped by 10.4 per cent to close at N2.25. Law Union and Rock Insurance dropped by 8.6 per cent to close at 74 kobo. Champion Breweries lost 7.5 per cent to close at N2.46. Forte Oil slipped by 6.98 per cent to close at N44.65 while Continental Reinsurance dropped by 6.25 per cent to close at N1.35 per share.

Market analysts said they expected the market to continue on a topsy-turvy in the new week as investors continue to rebalance portfolios in line with third quarter earnings and year-end returns outlooks.



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