NSE RoundUp! Nigerian equities lead global rally with N677bn gain

Nigerian equities ran ahead and in most instances quadrupled gains by global equities as a flood of open market orders scrambled Nigerian shares to their highest levels this year last week.

With investors removing price restrictions on orders and staking high on the upwardly market, Nigerian equities rose consecutively for four out of the five trading sessions last week, extending the consecutive price rally to 10 days. A weekend profit-taking contraction moderated the long-running price rally.

Benchmark indices at the Nigerian stock market showed average week-on-week gain of 7.46 per cent, equivalent to a net capital gain of N677 billion within the five trading sessions last week. The performance of the Nigerian equities outpaced equities’ returns in the global advanced and emerging markets as well as key African markets.

With more than four advancers to every decliner, the All Share Index (ASI)-the value-based common index that tracks prices at the Nigerian Stock Exchange (NSE) surged from the week’s opening index of 26,235.63 points to close the week at 28,192.46 points. Aggregate market value of all quoted equities also rose correspondingly from the week’s opening value of N9.069 trillion to close the week at N9.746 trillion, representing a gain of N677 billion. With the sustained rally, the negative overhang at the Nigerian stock market turned to positive with the average year-to-date return reversing from negative to a positive return of 4.90 per cent at the weekend.

Other African and global equities were far behind the Nigerian counters in a broadly bullish week for global equities. South Africa’s FTSE Index indicated a week-on-week return of 0.8 per cent. Egypt’s EGX 30 Index appreciated by 1.6 per cent. Kenya’s Nairobi Stock Exchange’s benchmark index rose by 1.5 per cent while Ghana Stock Exchange (GSE) Composite Index rallied by 1.1 per cent.

In the advanced markets, United States was seemingly on the balance with a 0.2 per cent decline by the US S& P 500 counteracted by same 0.2 per cent gain by the twin index, NASDAQ. In London, the United Kingdom FTSE Index continued on the uptrend with a gain of 1.3 per cent. Germany’s DAX Index rose by 0.1 per cent. Japan’s Nikkei Index rallied 2.5 per cent gain while Hong Kong’s HANG SENG Index appreciated by 2.3 per cent. France however suffered a relapse with the main CAC 40 Index declining by 0.9 per cent.

In the emerging markets bloc, Brazil’s IBOVESPA Index rallied by 2.8 per cent. Russia’s RTS Index rose by 2.0 per cent. However, China’s SHANGHAI Composite Index slipped by 0.6 per cent.

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Further analysis showed a broad rally at the Nigerian stock market with all the sectoral indices on the upside. The NSE 30 Index, which tracks the 30 most capitalised stocks at the NSE, posted a week-on-week gain of 8.71 per cent. The NSE Banking Index rose by 11.18 per cent. The NSE Insurance Index appreciated by 2.93 per cent. The NSE Consumer Goods Index rose by 13.36 per cent. The NSE Oil and Gas Index appreciated by 2.74 per cent while the NSE Industrial Goods Index inched up by 0.40 per cent.

There were 57 advancers against 13 decliners last week as against 43 advancers and 16 decliners recorded in the previous week. Top gains were in double percentage points, underlining the significant returns to investors during the week. May & Baker Nigeria led the gainers with 32 per cent gain to close at N1.28. Ecobank Transnational Incorporated followed by 22.5 per cent to N9.80. Fidson Healthcare rose by 21.5 per cent to close at N1.92. PZ Cussons Nigeria rallied 20.4 per cent to close at N18.06. Oando rose by 20.2 per cent to close at N8.62. Unity Bank chalked up 20 per cent to close at 60 kobo. Eterna rose by 17.9 per cent to N3.89. Diamond Bank appreciated by 17.7 per cent to close at N1 while Nigerian Breweries garnered 17.1 per cent to close at N149 per share.

There were fewer losses. Jaiz Bank recorded the highest loss of 9.1 per cent to close at N1. Seplat Petroleum Development Company followed with a drop of 5.9 per cent to close at N400. Newrest ASL lost 5.6 per cent to N4.69. Neimeth International Pharmaceuticals dropped by 5.4 per cent to 53 kobo. BOC Gases declined by 4.8 per cent to close at N3.35 per share. Transnationwide Express dropped by 4.82 per cent to 79 kobo. AG Leventis lost 4.17 per cent to close at 69 kobo. Lafarge Africa declined by 3.02 per cent to close at N48.10. Aiico Insurance dropped by 1.82 per cent to 54 kobo while Learn Africa dropped by 1.16 per cent to close at 85 kobo per share.

Total turnover surged to 3.26 billion shares worth N28.74 billion in 25,370 deals last week compared with a total of 1.15 billion shares valued at N10.44 billion traded in 16,676 deals two weeks ago. The financial services sector accounted for 83.4 per cent and 60 per cent of total turnover volume and value respectively with 2.72 billion shares valued at N17.23 billion in 15,103 deals. The consumer goods sector followed with 185.75 million shares worth N6.6 billion in 3,817 deals. The conglomerates sector placed third with 156.01 million shares worth N385.43 million in 1,340 deals.

The trio of FBN Holdings Plc, FCMB Group Plc and Zenith International Bank Plc were the most active stocks, jointly accounting for 1.42 billion shares worth N8.19 billion in 5,117 deals, representing 43.6 per cent and 28.5 per cent of the total equity turnover volume and value respectively.

Also traded during the week were a total of 948 units of Exchange Traded Products (ETPs) valued at N16,591 in 14 deals compared with a total of 20 units valued at N110,000 traded in a deal in the previous week.

In the debt segment, a total of 5,201 units of Federal Government bonds valued at N5.40 million were traded in three deals compared with a total of 1,582 units valued at N1.61 million traded in 10 deals two weeks ago.

Analysts’ consensus attributed the sustained rally to the positive influence of the recent improvement in foreign exchange situation and resultant gradual return of foreign portfolio investors as well as the improving macroeconomic environment.

Analysts at Afrinvest Securities described the improvement in foreign exchange situation as the “game changer” noting that “the equities market has witnessed improved participation from foreign portfolio investors”.

Market pundits at the SCM Capital Markets however said there was likelihood of a continuation of the profit-taking trend that started at the weekend in the next week, given the substantial gains by several stocks in the past 11 days.

“As investor sentiment remains strong with the possibility of the positive run extending into subsequent sessions, we suspect that the first few trading days of next week may be characterized by profit taking as the market is currently trading around the overbought region with 14-day RSI of 86.74,” Afrinvest Securities stated.

 

 

 

 

 

 

 

 

 

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