NSE RoundUp! Nigerian equities hit 5-month low with N279b loss despite global rally

The downtrend at the Nigerian stock market worsened considerably last week, contrary to widespread rallies across the global advanced and emerging stock markets. Nigerian benchmark stock market indices hit five-month low during the week, in nearly successive declines that shaved off N279 billion from the equities capitalisation by the end of the week. Four out of the five trading sessions at the Nigerian Stock Exchange (NSE) ended in the negative, including on Friday when the Vice President of Nigeria, Professor Yemi Osinbajo visited the Exchange.

The performance of the Nigerian equities market during the week was against the marked bullish runs in several global equities market as the world markets recovered instantaneously from the shocks2wed emergence of Republican Donald Trump as the 45thPresident of the United States of America (USA) on Wednesday November 9. From New York to London, Paris and Moscow, global equities showed heartening response to the emergence of the billionaire businessman and deal maker as the new president of the US.

Nigerian stock market, with large foreign portfolio investors, appeared numbed to the global rally. Nigerian equities rather built on the negative run of the previous week, when they lost N108 billion or 1.15 per cent.

The benchmark index for the Nigerian stock market, the All Share Index of the NSE, dropped by 3.0 per cent last week, equivalent to a loss of N279 billion. The ASI, which touched its lowest point since May 31, 2016 during the week, dropped from the week’s opening index of 26,981.60 points to close the week at 26,170.88 points. Aggregate market value of all quoted equities on the NSE thus dropped from the week’s value-on-board of N9.288 trillion to close the week at N9.009 trillion.

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All sectoral and group indices at the NSE also closed negative, underlining the widespread selling sentiments that saw two losses for every gain during the week. The NSE 30 Index, which tracks the 30 most capitalised stocks, declined by 2.73 per cent. The NSE Banking Index recorded a negative return of -2.11 per cent. The NSE Insurance Index dropped by 2.51 per cent. The NSE Consumer Goods Index recorded week-on-week return of -0.55 per cent, The NSE Oil and Gas Index dipped by 4.32 per cent. The NSE Industrial Goods Index recorded the highest loss of 7.68 per cent while the NSE Pension Index, which tracks a basket of stocks screened in line with pension funds investment guidelines, dropped by 2.23 per cent.

There were 36 losers against 18 gainers by the end of the week. Cement Company of Northern Nigeria led the losers, in percentage terms, with a drop of 14.3 per cent to close at N4.48. Nigerian Aviation Handling Company followed with a loss of 14.18 per cent to close at N2.30. Cadbury Nigeria declined by 14.13 per cent to N11.12. Forte Oil dropped by 12.7 per cent to N104.50. Lafarge Africa lost 12.5 per cent to close at N48. Champion Breweries dropped by 10.23 per cent to close at N2.37. Okomu Oil Palm dropped by 9.6 per cent to N42.47. Caverton Offshore Support Group declined by 9.1 per cent to N1. Diamond Bank slipped by 9.0 per cent to N1.01 while PZ Cussons Nigeria dropped by 8.4 per cent to close at N16.49 per share.

Total turnover last week stood at 2.847 billion shares worth N7.420 billion in 16,065 as against a total of 873.838 million shares valued at N8.024 billion traded in 15,944 deals two weeks ago. Financial services sector continued to dominate the activity chart with 2.632 billion shares valued at N4.935 billion in 10,882 deals; representing 92.5 per cent and 66.5 per cent of the total equity turnover volume and value respectively. The information and communication technology sector followed with 105.401 million shares worth N52.702 million in 11 deals while the conglomerates sector placed third with a turnover of 36.495 million shares worth N44.162 million in 446 deals.

Low-priced equities continued to dominate the activity chart. The trio of Standard Alliance Insurance Plc, Chams Plc and GuarantyTrust Bank Plc were the most active stocks and jointly accounted for 2.310 billion shares worth N3.005 billion in 1,825 deals, representing 81.16 per cent and 40.49 per cent of the total equity turnover volume and value respectively. The duo of Standard Alliance Insurance and Chams trade at their nominal value of 50 kobo. However, Guaranty Trust Bank is a highly capitalised bank, the highest-priced stock in the banking sector.

Also traded during the week were a total of 5,080 units of Exchange Traded Products (ETPs) valued at N62,550 in 17 deals as against atotal of 56,688 units valued at N817,310 traded in 31 deals in previous week. In the bond segment, a total of 73,694 units of Federal Government Bonds valued at N80.18 million were traded in nine deals compared to a total of 13,020 units of Federal Government Bonds valued at N12.953 million traded in 14 deals in the previous week.

On the positive side, Airline Services and Logistics recorded the highest gain of 19.7 per cent to close at N3.04. Wema Bank followed with a gain of 10.5 per cent to close at 63 kobo. Livestock Feeds rose by 9.59 per cent to 80 kobo. Eterna appreciated by 9.56 per cent while Guinness Nigeria rose by 7.1 per cent to close the week at N90 per share.

Globally, equities were largely on the upbeat as investors quickly adjusted to the unfolding political transition in the US. The US S &P 500 Index appreciated by 3.9 per cent while its twin indicator, NASDAQ trailed with 3.2 per cent gain. In United Kingdom, the UK FTSE Index rose by 0.9 per cent. In Europe, Germany’s DAXrallied by 4.1 per cent. France’s CAC Index rose by 3.0 per cent while Russia’s RTS Index jumped by 3.4 per cent.

Other emerging markets showed improved performance. Japan’sNIKKEI Index appreciated by 2.8 per cent. China’s SHANGHAI Composite Index rose by 2.3 per cent. South Africa’s FTSE/JSE Index appreciated by 1.9 per cent. Egypt’s EGX Index surged by 21.3 per cent while Kenya’s Nairobi Stock Exchange Index inched up by 0.4 per cent. However, Hong-Kong’s HANG-SENG Index declined by 0.5 per cent. India’s BSE SENS Index declined by 1.7 per cent. Brazil’s IBOVESPA Index depreciated by 1.7 per cent while Ghana’s GSE Composite Index dropped by 1.5 per cent.

Market analysts said the Nigerian stock market was reflective of the tough national macroeconomic condition, which has constrained the earnings and disposable income of the people. Citing the depressed third quarter results of companies, analysts said the absence of a national driving force appeared to be slowing down the recovery of the market.

With most equities on their lows, market pundits expected the undervaluation of stocks to attract bargain-hunters and create momentary rally in the week ahead.

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