NSE RoundUp! Nigeria leads emerging equities amidst sustained rally

It was an all-week upswing at the Nigerian stock market this past week as investors continued to react positively to steady improvements in corporate earnings in the first quarter and cautious optimism on the macroeconomic recovery.

Benchmark indices at the Nigerian Stock Exchange (NSE) reached their highest index points at the weekend, underlining the widespread demand for quoted shares.

With nearly three advancers to every decliner, the Nigerian stock market recorded average week-on-week gain of 1.85 per cent during the four-day trading session, continuing the uptrend that closed April in the early days of May. The sustained rally added about N164.9 billion to total market value of quoted equities, but the delisting of four companies during the week shaved the net capital gain at the weekend to N157 billion.

The sustained rally at the Nigerian stock market counteracted the general decline in tracked emerging markets and other African major markets. Most African markets closed in the red last week. The South Africa FTSE Index showed a week-on-week decline of 0.6 per cent. Kenya’s main equities index slipped by 0.3 per cent while Ghana Stock Exchange Composite Index was flattish. In other emerging markets, Russia’s RTS Index declined by 1.2 per cent. China’s Shanghai Composite Index dropped by 1.6 per cent. Brazil’s IBOVESPA Index lost 0.5 per cent while India’s Bombay Stock Exchange Index declined by 0.2 per cent. However, Egypt’s EGX 30 recorded a modest gain of 0.3 per cent.

Aggregate market value of all quoted equities on the NSE rose from the week’s opening value of N8.913 trillion to close the week at N9.069 trillion, an increase of 1.75 per cent. The All Share Index (ASI)-the value-based common index that tracks prices at the Exchange, rose from the week’s opening index of 25,758.51 points to close at 26,235.63 points, indicating a week-on-week gain of 1.85 per cent. The difference between the market value and the ASI was due to delisting of four companies during the week, including UTC, MTECH Communications, Beco Petroleum and MTI Plc.

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Considerable recovery in April and early gains in May have greatly helped to reduce the negative overhang at the stock market. The average year-to-date return improved to -2.38 per cent at the weekend, riding on the back of an average quarter-to-date return of 2.82 per cent.

Most sectoral indices closed in the green with the banking sector leading the rally. The NSE Banking Index rose by 3.64 per cent last week on the back of improved earnings and continuing profitability of the banks. The NSE Oil and Gas Index followed with a return of 3.45 per cent as investors scrambled for low-priced Oando. The NSE Consumer Goods Index rallied by 2.98 per cent while the NSE 30, which tracked the 30 most capitalised companies on the NSE, recorded above average growth of 2.41 per cent. However, the NSE Insurance Index slipped by 0.09 per cent while the NSE Industrial Goods Index declined by 1.04 per cent.

There were 43 gainers against 16 losers this past week compared with 38 gainers and 25 losers recorded in the previous week. A total of 114 stocks have remained unchanged for the past two weeks. Fidson Healthcare recorded the highest gain, in percentage terms, of 43.6 per cent to close at N1.58. Oando followed with a gain of 24 per cent to close at N7.17. Livestock Feeds rose by 16.2 per cent to close at 86 kobo. Nigerian Aviation Handling Company rose by 15.2 per cent to N2.88. Newrest ASL chalked up 14.25 per cent to close at N4.97. FBN Holdings rose by 14.2 per cent to close at N3.62. May & Baker Nigeria appreciated by 14.1 per cent to 97 kobo while Transnational Corporation of Nigeria added 11.4 per cent to close at 98 kobo.

On the negative side, Unity Bank led the decliners with a drop of 13.8 per cent to close at 50 kobo. Champion Breweries dropped by 8.9 per cent to close at N2.14. Stanbic IBTC Holdings declined by 6.7 per cent to N24.50. Nascon Allied Industries lost 5.8 per cent to close at N8 while AXA Mansard Insurance declined by 5.7 per cent to N1.48 per share.

Total turnover during the four days of trading at the NSE stood at 1.15 billion shares worth N10.44 billion in 16,676 compared with a total of 1.33 billion shares valued at N9.67 traded in 16,300 deals two weeks ago.

Financial services sector, the traditional dominant sector, remained atop activities’ chart with 813.02 million shares valued at N6.90 billion in 10,298 deals; representing 70.45 per cent and 66.13 per cent of the total equity turnover volume and value respectively. The oil and gas sector occupied a distant second with 106.57 million shares worth N1.06 billion in 1,356 deals while the services sector ranked third with a turnover of 90.94 million shares worth N188.20 million in 660 deals.

The trio of Zenith International Bank Plc, FBN Holdings Plc and Oando Plc were the most active stocks. The three most active stocks accounted for 385.893 million shares worth N3.816 billion in 4,005 deals, contributing 33.44 per cent and 36.55 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 20 units of Exchange Traded Products (ETPs) valued at N110,000 in a deal compared with a total of 533 units valued at N32,204 traded in 15 deals two weeks ago.

In the debt segment, a total of 1,582 units of Federal Government Bonds valued at N1.608 million were traded in 10 deals compared with a total of 4,705 units valued at N3.934 million traded in four deals two weeks ago.

Beyond Nigeria, further analysis of the global equities market showed largely positive outlook in the advanced markets. In the United States of America, the S & P 500 Index appreciated by 0.4 per cent while the twin index, NASDAQ, rose by 0.6 per cent. With the local elections strengthening the hands of Prime Minister Theresa May, the United Kingdom FTSE Index rallied by 0.7 per cent. France’s CAC 40 Index surged by 2.8 per cent on the back of enthusiasm as France prepares for the presidential election run-off this weekend. Japan’s NIKKEI Index also rose by 1.3 per cent.

“The impressive market breadth recorded this week as well as broad-based nature of the two-week long rally – with mid and small cap stocks also advancing – suggests investor sentiment is beginning to improve. Whilst we continue to hold a positive short term view of the market, we expect to see some profit taking in early trades next week,” Afrinvest Securities, a Lagos-based dealer at the NSE stated.

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