Nigerian equities rode against a strong first-day profit-taking trend to close with a marginal decline last week as global equities showed a largely negative performance amidst riveting political developments.
The momentum of activities at the Nigerian stock market however remained on the upside as investors continued bargain-hunting for value stocks.
Benchmark indices at the Nigerian stock market showed average week-on-week decline of 0.28 per cent, equivalent to a net capital loss of N27 billion in the five trading sessions last week. The overall year-to-date return meanwhile remained positive at 4.61 per cent at the weekend.
Nigerian equities had opened to a strong profit-taking trend on Monday, which shaved off N235 billion in the first trading session of the week. Equities however rallied back and sustained uptrend from the second trading session through the week, but the first cut was deep enough to leave a scar.
The performance of Nigerian equities however still surpassed several global advanced and emerging equities, which were rattled by political uncertainties from the United States of America to Brazil and Russia.
The All Share Index (ASI)-the value-based common index that tracks prices at the Nigerian Stock Exchange (NSE), slipped from the week’s opening index of 28,192.46 points to close the week at 28,113.38 points. Aggregate market capitalisation of all quoted equities also declined marginally from N9.746 trillion to close at N9.719 trillion.
The negative overall position belied the continuing rally in the most active financial services sector and underscored the losses suffered by large-cap stocks in the consumer goods, oil and gas and industrial goods sectors. The NSE Banking Index recorded a gain of 2.58 per cent as many banks touched their recent highs during the week. The NSE Insurance Index also rose by 0.38 per cent.
However, the NSE 30 Index, which tracks the 30 most capitalised stocks slipped by 0.03 per cent, reflecting the drag-down effect of the large-cap stocks in the three negative sectors against the gains by banking stocks. The NSE Consumer Goods Index dropped by 1.48 per cent. The NSE Oil and Gas Index declined by 3.26 per cent while the NSE Industrial Goods Index slipped by 0.06 per cent.
Several global equities traded on the negative. In United States, the twin indices, the S & P 500 and NASDAQ declined by 1.1 per cent each. France’s CAC 40 Index dropped by 1.6 per cent. Germany’s DAX Index dropped by 1.0 per cent. Japan’s Nikkei Index declined by 1.5 per cent. Brazil’s IBOVESPA Index slumped by 9.7 per cent. Russia’s RTS Index depreciated by 0.5 per cent.
Most other African equities closed on the upside, trending on the same path with London and China. In London, the United Kingdom FTSE rose by 0.4 per cent. China’s SHANGAI COMPOSITE Index returned a gain of 0.2 per cent. Hong Kong’s HANG SENG Index rose by 0.1 per cent. Ghana’s Composite Index and Egypt’s EGX Index returned 0.4 per cent each while Kenya’s Nairobi Stock Exchange All Share Index closed flat.
Further analysis of the Nigerian market showed a turnover of turnover of 2.271 billion shares worth N32.647 billion in 20,710 deals last week as against a total of 3.255 billion shares valued at N28.738 billion traded in 25,370 deals in the previous week.
The financial services sector remained the dominant sector with 1.843 billion shares valued at N17.715 billion traded in 12,119 deals; thus contributing 81.19 per cent and 54.26 per cent to the total equity turnover volume and value respectively. The oil and gas sector occupied a distant sector with 119.755 million shares worth N5.198 billion in 2,599 deals while the conglomerates sector recorded a turnover of 119.281 million shares worth N273.785 million in 1,109 deals.
The trio of Access Bank Plc, Zenith International Bank Plc and FBN Holdings Plc were the most active and jointly accounted for 998.849 million shares worth N10.412 billion in 4,831 deals, contributing 43.98 per cent and 31.89 per cent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 1,470 units of Exchange Traded Products (ETPs) valued at N10,128 in two deals compared with a total of 948 units valued at N16,591.16 transacted in previous week in 14 deal.
In the debt segment, a total of 6,308 units of Federal Government Bonds valued at N5.481million were traded last week in three deals, compared with a total of 5,201 units valued at N5.400 million traded in three deals two weeks ago.
There were 30 advancers against 31 decliners last week. May & Baker Nigeria led the advancers with a gain of 14.8 per cent to close at N1.47. Linkage Assurance followed with a gain of 11.5 per cent to close at 58 kobo. United Bank for Africa rose by 9.6 per cent to close at N7.29. Oando added 7.8 per cent to close at N9.29 while Neimeth International Pharmaceuticals rallied by 7.6 per cent to 57 kobo.
On the downside, Newrest ASL led the losers with a drop of 13.2 per cent to close at N4.07. C & I Leasing declined by 11.8 per cent tp close at 67 kobo. Diamond Bank lost 11 per cent to close at 89 kobo. Eterna dropped by 8.7 per cent to close at N3.55 while Cement Company of Northern Nigeria dropped by 8.2 per cent to close at N4.60.
Market pundits said the market performance last week was balancing of forces by the bargain-hunters and profit-takers, with many investors seeking to take profits from sustained rally that had pushed equities to their 10-month high.
Most analysts still expected the balancing to continue in the meantime, with improving investors’ appetite expected to continue to tilt the market towards the upside.
“Notwithstanding, we expect investors’ interest in equities to stay strong as the improvements in foreign exchange persist,” Afrinvest Securities in a preview of possible market situation in the new week.
“This week, we expect a mix of profit taking and bargain hunting activities especially in favour of low-priced value stocks,” Cowry Asset Management stated.
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