NSE RoundUp! Nigerian, African equities in modest rally amidst global pause

African equities largely played the contrarian stocks in a global stock market that traded mostly in negative last week as investors in Nigeria, Kenya and Ghana spurred on bargain-hunting for value stocks ahead of the corporate earnings season, which is expected to gather momentum in the next few weeks.

The benchmark index for the Nigerian equities market indicated average week-on-week gain of 0.34 per cent, equivalent to net capital gain of N30 billion. In Ghana, average gain was higher at 2.6 per cent while Kenya trailed with 2.0 per cent.

The All Share Index (ASI), the common index that tracks prices at the Nigerian Stock Exchange (NSE), rode on the back of strong rally in the fast moving consumer goods (FMCGs) sector, especially breweries, to close the week at 25,250.37 points as against its week’s opening index of 25,164.91 points. Aggregate market value of all quoted equities on the NSE rose from its week’s opening value of N8.709 trillion to close at N8.739 trillion.

But the rally at the Nigerian equities market remained tenuous with large underlying supply amidst restricted demand. While the overall market position closed positive, the market largely remained negative. There were nearly two decliners for every advancer during the week. The larger segment of equities also remained dormant with 125 flat stocks last week against 123 unchanged stocks in previous week.

With 18 gainers to 34 losers, most sectoral indices at the Nigerian stock market closed in the negative. The NSE Industrial Goods Index dropped by 2.83 per cent. The NSE Oil and Gas Index declined by 2.50 per cent while the NSE Banking Index slipped by 0.79 per cent. However, rallied by the leading brewers drove the NSE Consumer Goods Index and the NSE 30 Index, which tracks the 30 most capitalised stocks, to a gain of 4.08 per cent and 0.42 per cent respectively. The NSE Insurance Index recorded average gain of 0.33 per cent.

Nigerian Breweries, the second most capitalised stock at the stock market, was the major driver at the NSE last week, leading with a gain of 13.04 per cent to close at N130. Nigerian Breweries had announced gross dividend of N28 billion for the 2016 business year.

The dividend recommendation and low share price combined to drive Nigerian Breweries, which had declined to its six-month low on February 14. Guinness Nigeria, the second most capitalised brewer, also enjoyed a spillover of the positive sentiments on breweries, rallying the second highest gain of 11.57 per cent to close at N68. NPF Microfinance Bank rose by 9.3 per cent to N1.18. Beta Glass added 4.99 per cent to close at N38.27 while Custodian and Allied Insurance rallied 4.94 per cent to close at N3.40.

On the other hand, Unilever Nigeria led the losers with a loss of 16.18 per cent to close at N28.50. Forte Oil followed with a loss of 14.96 per cent to close at N50.35. Vitafoam Nigeria dropped by 14 per cent to N1.72. UAC of Nigeria dropped by 12.2 per cent while Honeywell Flour Mills declined by 9.09 per cent to close at N1 per share.

Total turnover stood at 765.66 million shares worth N9.72 billion in 12,468 deals last week compared with a total of 1.07 billion shares valued at N8.61 billion in 14,486 deals in the previous week. The financial services sector led the activity chart with 575.290 million shares valued at N3.470 billion in 6,738 deals; thus contributing 75.14 per cent and 35.71 per cent of the total equity turnover volume and value respectively.

Read also: NSE LIVE! Bargain-hunting spurs equities to N56bn gain

The consumer goods sector followed with 53.812 million shares worth N3.470 billion in 2,572 dealswhile the conglomerates sector placed third with 48.96 million shares worth N229.411 million in 622 deals.

The three most active stocks were Zenith International Bank Plc, AIICO Insurance Plc and United Capital Plc, which altogether accounted for 280.563 million shares worth N1.867 billion in 2,438 deals, representing 36.6 per cent and 19.2 per cent of the total equity turnover volume and value respectively.

In the debt segment, a total of 24,850 units of Federal Government bonds valued at N20.533 million were traded in six deals compared with a total of 10,673 units valued at N10.479 million traded in 10 deals in the previous week.

The global equities market was largely negative as the global markets await President Trump’s proposed tax cut and trade policies. In United States, the Nasdaq declined by 0.1 per cent while the US S&P countered with a gain of 0.5 per cent. In France, CAC dropped by 1.0 per cent. In Germany, the DAX declined by 0.1 per cent. The Hong Kong HANG SENG Index slipped by 0.3 per cent.

The Russian RTS dropped by 2.3 per cent. Brazil’s IBOVESPAslipped by 1.7 per cent while South Africa’s FTSE dropped by 1.3per cent. However, the Japan NIKKEI Index rose by 0.3 per cent. China’s Shanghai Composite appreciated by 1.6 per cent while the Indian BSE rallied 1.5 per cent.

Most analysts agreed that earnings reports and bargain-hunting would continue to determine the direction of the market in the next trading sessions.

“Despite positive performance in the consumer goods sector index this week, investors are still wary about full-year 2016 earnings due to pressure on production cost and finance expenses,” Afrinvest Securities, a Lagos-based stockbroker, stated.

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