NSE RoundUp! Nigerian equities haul N197bn in Q1 earnings rally

Nigerian equities surged ahead of most global equities in the immediate past week as considerably impressive first quarter earnings by quoted companies quickened investors’ appetite for corporate shares. Amidst a global upbeat, transactions at the Nigerian stock market in the immediate past week trended mostly on the positive as most companies rushed in to submit their first quarter earnings ahead of the Friday April 28 deadline.

Extant rules at the Nigerian Stock Exchange (NSE) require quoted companies to submit their audited report and accounts not later than 90 days after the end of the period. Also, companies are required to submit their interim quarterly results not later than 30 days after the end of the quarter. Not less than 80 per cent of quoted companies, including the biggest companies, run the Gregorian calendar year as their business year. The deadline for the submission of the first quarter 2017 interim results was thus April 28, the last working day within the period.

Most quoted companies submitted their three-month earnings reports during the week, showing appreciable growths in the top-line and profit. With the commencement of the new foreign exchange window for investors and exporters by the Central Bank of Nigeria (CBN) last Monday, equities received dual boost from optimistic earnings and the attempt, no matter how cautious, to resolve the major disincentive to foreign portfolio investment (FPI) inflow.

The new CBN’s Investors’ & Exporters’ FX Window (IEFW) consists of portfolio investors, exporters, authorised dealers and CBN as market participants and it will cater to invisible transactions, including capital repatriation, dividend remittances, loan repayments, loan interest repayments, software subscription payments, bills for collection and any other trade-related payments.

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The momentum of activities and pricing trend at the NSE were bullish for most part of the week as bargain-hunters sought early leads in value stocks, most of which had been substantially undervalued by a long-running price depression at the stock market. The positive market situation was also boosted by the continuing signs that the Nigerian economy may exit recession and restart growth in the next quarter.

All benchmark indices at the NSE showed above average performance last week. The benchmark price index showed average week-on-week gain of 2.26 per cent, equivalent to net capital gain of N197 billion in the five-day trading week. Turnover volume and value rose by 48.6 per cent and 63.4 per cent respectively.

Aggregate market value of all quoted equities rose from the week’s opening value of N8.716 trillion to close the week at N8.913 trillion. The All Share Index (ASI) trended upward from the week’s index on board of 25,189.37 points to close the week at 25,758.51 points. Most sectoral indices also closed in the green, underlining the widespread price appreciation during the week.

The NSE 30 Index, which tracks 30 most capitalised companies, appreciated by 2.74 per cent. The NSE Banking Index rallied by 6.11 per cent. The NSE Oil and Gas Index returned 1.99 per cent while the NSE Industrial Goods Index rose by 4.77 per cent. On the other hand, the NSE Insurance Index declined by 0.17 per cent while the NSE Consumer Goods Index slipped by 0.05 per cent.

There were 38 gainers against 25 losers last week compared with 24 gainers and 31 losers in the previous week. Stanbic IBTC Holdings led the gainers with a gain of 28.2 per cent to close at N26.25. Ashaka Cement followed with a gain of 15.6 per cent to close at N10.44. Livestock Feeds rose by 13.85 per cent to close at 74 kobo. NPF Microfinance Bank added 12.8 per cent to close at N1.32 while United Bank for Africa chalked up 12.36 per cent to close at N5.82.

On the negative side, Diamond Bank led the losers with a loss of 12.22 per cent to close at 79 kobo. Unilever Nigeria dropped by 10.39 per cent to close at N31.81. Transnational Corporation of Nigeria declined by 9.28 per cent to close at 88 kobo. Continental Reinsurance dropped by 9.02 per cent to close at N1.11 while Berger Paints declined by 7.84 per cent to N5.88 per share.

Total turnover stood at 1.333 billion shares worth N9.671 billion in 16,300 deals compared with a total of 896.748 million shares valued at N5.918 billion traded in 11,185 deals in the previous week. The financial services sector led the activity chart with 960.307 million shares valued at N6.098 billion traded in 9,675 deals; contributing 72.03 per cent and 63.06 per cent to the total equity turnover volume and value respectively. The conglomerates sector followed with 154.404 million shares worth N330.132 million in 896 deals while the oil and gas sector placed third with a turnover of 60.285 million shares worth N896.174 million in 1,379 deals.

The trio of Access Bank Plc, Transnational Corporation of Nigeria Plc and Fidelity Bank Plc jointly accounted for 489.178 million shares worth N1.731 billion in 1,665 deals, contributing 36.69 per cent and 17.90 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 533 units of Exchange Traded Products (ETPs) valued at N32,204 executed in 15 deal compared with a total of 100 units valued at N6,799 traded in onedeal.

In the debt market, a total of 4,705 units of Federal Government Bonds valued at N3.934 million were traded in four deals, compared with a total of 1,311 units valued at N1.346 million traded in sevendeals in the previous week.

Globally, equities traded largely on the upswing with most advanced and emerging markets closing with considerable gains. The United Kingdom’s FTSE Index appreciated by 1.4 per cent. In United States of America, the US S & P 500 rose by 1.7 per cent while the NASDAQ appreciated by 2.5 per cent. In Europe, France’s CAC 40 Index rose by 4.2 per cent while Germany’s DAX Index rallied by 3.2 per cent. In Asia, Japan’s Nikkei Index rose by 3.1 per cent while the Hong Kong’s HANG SENG Index returned 2.4 per cent.

In the emerging market bloc of Brazil, Russia, India, China and South Africa (BRICS), the market remained bullish. Brazil’s IBOVESPA Index rose by 1.6 per cent while Russia’s RTS Index rose by 0.6 per cent. South Africa’s FTSE Index surged by 3.0 per cent. However, China’s SHANGHAI composite Index declined by 0.6 per cent.

Across the Africa, the mood was also positive. Ghana’s GSEComposite Index appreciated by 1.0 per cent while the Kenya’s NSEIndex posted a week-on-week gain of 0.9 per cent. However, Egypt’s EGX 30 Index dropped by 2.9 per cent.

Analysts appeared to agree that the bullish Nigerian market was due to the good outlook shown by most first quarter earnings reports. But the market would continue to trade on cautious note, with swinging profit-taking intermediating expected rallies on the back of increasing foreign portfolio participation.

Analysts at Afrinvest Securities said the CBN’s IEFW had renewed optimism in equities as the window is expected to boost inflow from foreign investors.

“We expect some profit-taking in the coming week but we have a positive short-term perspective for equities,” Afrinvest Securities, a Lagos-based dealer on the NSE, stated in a two-sided investment advisory at the weekend.

“This week, we expect bargain hunting activities especially in favour of low-priced value stocks,” Cowry Asset Management Limited stated in a preview.

 

 

 

 

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