NSE RoundUp! Nigerian equities buck global rally with N122b loss

With two decliners for every advancer, Nigerian equities traded largely in the negative in the immediate past week, bucking a global rally that saw equities on the upswing from Europe to America, Asia and other parts of Africa.

The benchmark indices at the Nigerian Stock Exchange (NSE) indicated average week-on-week decline of 1.79 per cent, equivalent to a net capital loss of N122 billion for the five-day trading period. The performance of Nigerian equities stood clearly in contrast to other tracked African equities in Kenya, Ghana and Egypt.

The All Share Index (ASI), the main index that tracks prices at the stock market, declined from its week’s opening index of 25,802.54 points to close the week at 25,340.02 points. Aggregate market value of all quoted equities at the NSE also dropped from the week’s opening value of N8.892 trillion to close the week at N8.770 trillion.

In a bear market that saw widespread losses across sectors, the market ended the week with 19 advancers against 38 decliners compared with 23 advancers and 37 decliners recorded two weeks ago. A large chunk of equities remained dormant; 119 stocks closed flat last week as against 115 stocks in previous week.

UACN Property Development Company led the decliners with a loss of 23.8 per cent to close at N1.89. PZ Cussons Nigeria followed with a drop of 18.5 per cent to close at N11.04. Forte Oil declined by11.7 per cent. FBN Holdings lost 10.6 per cent to close at N3.13 while Nestle Nigeria declined by 8.2 per cent to close at N624.40.

On the positive side, Caverton Offshore Support Group led the gainers with a gain of 12.5 per cent to close at 90 kobo. Beta Glass rose by 10.2 per cent to close at N33.07. Neimeth International Pharmaceuticals rallied 6.5 per cent to close at 66 kobo while AXA Mansard Insurance rose by 5.3 per cent to close at N1.60 per share.

Total turnover stood at 1.052 billion shares worth N8.031 billion in 13,586 deals as against a total of 1.153 billion shares valued at N8.032 billion traded in 12,783 deals. The financial services sector remained the most active with 905.319 million shares valued at N3.399 billion traded in 7,501 deals; thus contributing 86.03 per cent and 42.32 per cent to the total equity turnover volume and value respectively. 

The conglomerates sector followed with 43.996 million shares worth N70.390 million in 581 deals while the third place was occupied by consumer goods sector with a turnover of 30.487 million shares worth N1.767 billion in 2,565 deals.

Low-priced financial services stocks, otherwise known as penny stocks, dominated the activities chart. The trio of AIICO Insurance Plc, Fidelity Bank Plc and Diamond Bank were the most active, in terms of volume, as they accounted for 367.616 million shares worth N277.747 million in 895 deals, thus contributing 34.95 per cent and 3.46 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 200 units of Exchange Traded Products (ETPs) valued at N338,007 executed in 8 deals compared with a total of 310 units valued at N19,293 traded in eight deals two weeks ago. 

In the debt segment, a total of 1,135 units of Federal Government Bonds valued at N1.175 million were traded in five deals last week as against a total of 100 units valued at N106, 156 traded in a deal two weeks ago.

During the week, Nigeria successfully issued its fourth sovereign Eurobond of $1 billion of 15-year. The bond will mature onFebruary 16th, 2032 and was priced at a rate of 7.875 per cent under the FGN’s Global Medium Term Note Programme. 

The offer was 7.8 times oversubscribed, with aggregate demand for the instrument closing at $7.8 billion against the $1 billion on offer. Most analysts have agreed that the oversubscription level was an indication of renewed investor confidence in Nigeria, noting the skepticism that initially trailed the Eurobond.

Read also: NSE LIVE! Equities relapse into negative with N47bn loss

With inflation on the rise, the falling share prices appeared to be weakening investors’ appetite. The National Bureau of Statistics (NBS) is scheduled to release the January 2017 inflation rate this week. Many analysts said they expected the headline inflation rate to inch higher to 18.7 per cent from 18.6 per cent.

The performance of the Nigerian equities market was contrary to the general bullish outlook for the global equities. In United States of America (USA), equities rallied to records for a third straight week of gains. The S&P 500 Index rose by 0.5 per cent. The Dow Jones Industrial Average rose by one per cent while the Nasdaq Compositerose by 0.9 per cent. In United Kingdom, the UK FTSE rose by 0.7per cent. 

Also, the Japan’s NIKKEI rose by 2.4 per cent. The Hong Kong HANG SENG followed with a gain of 2.0 per cent. In Europe, France CAC Index closed flat while Germany’s DAX declined by 0.1 per cent. China SHANGHAI Composite Index appreciated by 1.8 per cent. Indian BSE-SENS Index added 0.4 per cent while the South African FTSE/JSE gained 0.2 per cent.

In Africa, most equities closed on the upside. Kenya’s Nairobi Stock Exchange showed a gain of 2.5 per cent. Egypt’s EGX rallied 2.4 per cent while Ghanaian GSE inched up to 0.3 per cent.

“We expect the market to resume upbeat next week as sentiments tilt towards positioning for dividend income. The reflection of very strong flows of volume in the financial counters at today`s close supports our view. Besides, the market is currently trading in an oversold region, depicting buyers opportunities for medium to long-term,” SCM Capital stated in a weekend note to investors.

Analysts at Afrinvest Securities stated that they also expectedperformance to stay soft as low expectations on corporate earnings continue to dampen sentiment despite attractive market valuation.

 

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