NSE RoundUp! Nigerian equities lead emerging markets decline with N286bn loss

Nigerian equities suffered a major contraction during the immediate past week as investors turned round to take profits on steep rallies witnessed in the previous week. Benchmark indices at the Nigerian Stock Exchange (NSE) showed average week-on-week decline of 2.09 per cent, equivalent to net capital loss of N285.75 billion.

With nearly three decliners to every advancer, the Nigerian equities market showed widespread profit-taking trend. The performance of the Nigerian equities was almost a double of the average decline across the global emerging markets as investors appeared to show preference for advanced markets.

The All Share Index (ASI)-the common value-based index that tracks share prices at the NSE, declined from its week’s opening index of 39,257.53 points to close at 38,436.08 points, representing a drop of 2.09 per cent. However, aggregate market value of all quoted equities on the NSE drew on additional value from new listings by International Breweries and Stanbic IBTC Holdings to close higher at N13.678 trillion as against its week’s opening value of N13.672 trillion.

The average year-to-date return for Nigerian equities closed weekend lower at 43.02 per cent. The overall performance of the market remained driven by gains highly capitalised stocks and banking stocks. The NSE Banking Index showed average-year-to-date return of 71.13 per cent while the NSE 30 Index-which tracks the 30 most capitalised stocks, posted average return of 46.12 per cent. Other sectors are currently below the overall average return.

Sectoral analysis showed that the negative overall market performance last week was due mainly to sell-offs in the influential banking and industrial goods sectors. The NSE Banking Index recorded above average week-on-week decline of 5.33 per cent. The NSE Industrial Goods Index dropped by 4.79 per cent. The NSE Insurance Index dipped by 2.19 per cent while the NSE 30 Index-which tracks the 30 most capitalised quoted company, dropped by 2.18 per cent. However, the NSE Oil and Gas Index posted a return of 4.54 per cent while the NSE Consumer Goods Index recorded a modest return of 0.68 per cent.

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Across Africa, Asia and Europe, emerging market stocks showed a general downtrend as investors sought safety in the advanced economies. In Africa, the Kenya NSE 20 Index showed a drop of 1.1 per cent while South Africa’s FTSE Index dipped by 1.2 per cent. Russia’s RTS Index dropped by 0.9 per cent. China Shanghai Composite Index dropped by 0.7 per cent. Brazil’s Ibovespa Index dropped by 0.2 per cent. Japan’s Nikkei Index and France’s CAC 40 dipped by 1.1 per cent each while Germany’s XETRA DAX Index and Hong Kong Hang Seng Index declined by 0.7 per cent each.

The main global markets however ended on the positive. In United Kingdom, the UK FTSE All Share Index appreciated by 0.8 per cent. Also, United States of America’s twin indices showed a counterbalanced position. The US NASDAQ rose by 0.2 per cent while the S&P 500 Index closed flat. India’s Bombay Stock Exchange (BSE) Sens Index also appreciated by 0.6 per cent. Also, in Africa, the Egypt’s EGX 30 Index showed an impressive positive return of 2.7 per cent while Ghana’s GSE Composite Index rallied by 0.7 per cent.

Further analysis of the Nigerian equities market showed a slowdown in the momentum of activities with a turnover stood at 1.85 billion shares worth N51.52 billion in 23,863 deals last week as against a total of 3.32 billion shares valued at N36.45 billion traded in 29,771 deals penultimate week.

The financial services sector led the activity chart with 1.38 billion shares valued at N17.14 billion traded in 14,334 deals; thus contributing 74.35 per cent and 33.26 per cent to the total equity turnover volume and value respectively. The consumer goods sector followed with 175.88 million shares worth N8.044 billion in 4,882 deals while conglomerates sector occupied the third position with a turnover of 134.88 million shares worth N821.65 million in 1,108 deals.

The three most active stocks were Zenith International Bank Plc, FBN Holdings Plc and Diamond Bank Plc, which altogether accounted for 632.03 million shares worth N8.49 billion in 5,616 deals, contributing 34.13 per cent and 16.49 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 1,120 units of Exchange Traded Products (ETPs) valued at N14,179 in four deals compared with a total of 1.189 million valued at N11.662 million traded in 30 deals in the previous week.

A total of 5,382 units of Federal Government Bonds valued at N5.680 million were traded last week in 17 deals compared with a total of 5,240 units valued at N4.406 million traded in 23 deals two weeks ago.

Linkage Assurance led the losers, in percentage terms, with a drop of 14.7 per cent to close at 58 kobo. Learn Africa followed with a decline of 14 per cent to close at 86 kobo. Flour Mills of Nigeria lost 11.9 per cent to close at N30.83. Sterling Bank dropped by 11.5 per cent to close at N1 while Nigerian Aviation Handling Company declined by 10.9 per cent to close at N4.01.

On the positive side, Berger Paints led the gainers with a gain of 10.1 per cent to close at N8.09. Dangote Sugar Refinery rose by 8.3 per cent to close at N21.70. Nascon Allied Industries appreciated by 8.1 per cent to N19.30. Seplat Petroleum Development Company rose by 7.7 per cent to N540.05 while 11, formerly known as Mobil Oil Nigeria, appreciated by 6.4 per cent to close at N170 per share.

Most analysts said they expected a considerable recovery at the Nigerian stock market as quoted equities head toward the Santa Claus rally.

“Following a largely negative performance this week, we expect the market to rebound in the coming week as investor’s position in fundamentally sound stocks ahead of the usual year-end rally,” Afrinvest Securities stated.

“Trading sentiments in the coming sessions will be driven by positioning for 2017 corporate earnings,” analysts at FSDH Securities stated.

 

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