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NSE RoundUp! Nigerian equities in 3-month best performance amidst bargain hunting

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NSE RoundUp! Nigerian equities in 3-month best performance amidst bargain hunting

Nigerian equities recorded their best performance in three months in the immediate past week with a net capital gain of N197 billion as investors scurried to take positions in stocks that had sustainedconsiderable price depreciation. Most price indices at the Nigerian Stock Exchange (NSE) closed on the upside at the weekend, with average gain for the week closing at 1.05 per cent.

The rally boosted the average year-to-date return at the Nigerian equities market to 7.85 per cent. Average returns in the banking and oil and gas sectors are higher and above overall average, with the oil and gas sector leading with a double-digit return of 10.16 per cent.

The All Share Index (ASI)-the value-based benchmark index that serves as equities sovereign index for Nigeria rose from its week’s opening index point of 40,814.89 points to close the week at 41,244.89 points. Aggregate market value of all quoted equities also appreciated to close the week at N14.940 trillion as against the value on board of N14.743 trillion at the beginning of the week.

Sectoral and group indices at the Exchange showed widespread bargain-hunting, especially for large-cap stocks that weigh heavily on the sectors. The NSE 30 Index-which tracks the 30 most capitalised stocks at the Exchange, posted average gain of 1.87 per cent, showing the influence of high-cap stocks on the overall average performance. The NSE Consumer Goods Index recorded the highest gain of 6.30 per cent, with Nigeria’s highest-priced stock and fast moving consumer goods leader-Nestle Nigeria on the second post of the main advancers for the week.

The NSE Oil and Gas Index appreciated by 3.25 per cent on the back of gains by Forte Oil. The NSE Banking Index posted a modest return of 0.67 per cent. The NSE Lotus Islamic Index-which tracks stocks that comply with Islamic investment rules, recorded above-average gain of 1.96 per cent. The NSE Pension Index-which tracks stocks specially screened in line with Nigeria’s pension investment rules, recorded a week-on-week gain of 0.93 per cent. However, the NSE Insurance Index dropped by 1.57 per cent while the NSE Industrial Goods Index recorded the highest loss of 4.89 per cent.

Read also: NSE! Access Bank gets approval for $1.5bn capital raising

With 33 advancers to 41 decliners during the week, the positive overall market position was driven by considerable rally within the large-cap stocks group. Forte Oil led the advancers, in percentage terms, with a gain of 20.69 per cent to close at N45.20. Nestle Nigeria followed with a gain of 13.5 per cent to close at N1,615. Learn Africa rose by 12.5 per cent to close at N1.35. Veritas Kapital Assurance appreciated by 12 per cent to close at 28 kobo. Consolidated Hallmark Insurance rose by 10.3 per cent to close at 32 kobo while International Breweries rallied 9.05 per cent to close at N51.80 per share.

On the negative side, Unity Bank led the decliners with a drop of 21.26 per cent to close at N1, GlaxoSmithKline Consumer Nigeria followed with a drop of 20.79 per cent to close at N24. Jaiz Bank declined by 17.44 per cent to close at 71 kobo. Mutual Benefits Assurance dropped by 17.2 per cent to 24 kobo while Skye Bank declined by 14.7 per cent to close at 81 kobo per share.

Total turnover stood at 1.825 billion shares worth N24.653 billion in 23,148 deals compared with a total of 3.008 billion shares valued atN30.296 billion traded in 24,036 deals two weeks ago. The financial services sector led the activity chart with 1.360 billion shares valued at N14.642 billion traded in 12,118 deals; thus contributing 74.51per cent and 59.40 per cent to the total equity turnover volume and value respectively. Consumer goods industry followed with 124.816million shares worth N6.910 billion in 3,709 deals. Oil and gassector placed third with a turnover of 112.479 million shares worth N1.389 billion in 3,429 deals.

The three most active stocks were Law Union And Rock Insurance Plc, FBN Holdings Plc, and Zenith International Bank Plc, which altogether accounted for 581.018 million shares worth N7.098 billion in 4,283 deals, contributing 31.83 per cent and 28.79 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 56,260 units of Exchange Traded Products (ETPs) valued at N376,387 in six deals, compared with a total of 177,144 units valued at N2.809 million traded in six deals two weeks ago.

In the sovereign debt segment, a total of 725 units of Federal Government Bonds valued at N660,984 were traded in 10 deals, compared with a total of 13,735 units valued at N14.128 million traded in 16 deals penultimate week.

Nigerian equities were among the major contrarians in a global market dominated by cautious trades. Global equities indices showed a mixed performance. In United States, the S & P 500 Index posted a gain of 0.11 per cent but the equally important Dow Jones Industrial Average (DJIA) declined by 0.68 per cent, underlining the topsy-turvy that dominated the week. In United Kingdom, the FTSE rose by 1.36 per cent. The broader European gauge-Euro Stoxx showed average return of 0.59 per cent. Japan’s Nikkei Index posted a gain of 1.38 per cent. In the emerging markets, valuations were down with the MSCI EM Index dropping by 2.05 per cent. Frontier markets gauge-MSCI FM Index also declined by 2.05 per cent.

Most analysts remain optimistic about the outlook for Nigerian equities, despite the increasing political risks. Analysts at Afrinvest Securities said Nigerian equities still hold several opportunities for attractive returns, citing headroom for gains in many influential sectors. Afrinvest Securities said macroeconomic fundamentals support a positive outlook for Nigerian equities.

“We look for extension of gains on the bourse, amidst significant drop in fixed income yields, and relatively lower prices of risky assets,” Cordros Capital stated.

 

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