NSE RoundUp! Nigerian equities lose N111bn in post-dividend selling spree

For the third consecutive week, Nigerian equities traded mostly in the negative as investors sustained a tight balance of profit-taking on the back of the concluding full-year earnings season and expectations of the first quarter results for 2017.

Benchmark indices for the Nigerian stock market showed an average week-on-week decline of 1.26 per cent, equivalent to a net capital loss of N111 billion in the four-day trading session. The performance of the Nigerian market came against the background of the topsy-turvy situation across the global stock markets.

Nigerian equities have traded mostly in the buyer’s market this month after the March 31, 2017 deadline for quoted companies to submit their audited report and accounts for the 2016 business year. Most companies have already announced their full-year earnings and dividend payouts. Most companies are also required to submit their first quarter results for the 2017 business year this week, under the extant rules at the Nigerian Stock Exchange (NSE).

Extant rules at the NSE require quoted companies to submit their audited earnings reports, not later than 90 calendar days, or three months, after the expiration of the period. The rules also require quoted companies to submit interim report not later than 30 calendar days after the end of the relevant period.

Most quoted companies including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year. Not less than 83 per cent of quoted companies use the 12-month Gregorian calendar year as their business year. The business year thus terminates on December 31. While March 31 is usually the deadline for submission of annual report for companies with Gregorian calendar business year, the deadline for the quarterly report is a month after the quarter.

The effective deadline for the submission of the corporate results for the first quarter ended March 31, 2017 is this week, Friday April 28, the last working day before the regulatory deadline of April 30, 2017.

Most analysts agreed that the market direction this week will be dictated by the inflow of first quarter earnings. “In the interim, we expect market performance to be dictated by investors’ reaction to first quarter 2017 earnings scorecards which are due next week (this week). Barring any negative earnings surprises, we expect the broader index to close positive as investors hunt for bargains,” Afrinvest Securities, a Lagos-based dealer at the Exchange, stated.

Read also: NSE LIVE! Equities relapse with N17bn loss

Aggregate market value of all quoted equities on the NSE dropped last week by N111 billion from the week’s opening value of N8.827 trillion to close the week at N8.716 trillion. The All Share Index (ASI)-a value-based index that tracks prices at the Exchange and doubles as sovereign equities index for Nigeria, declined by 1.26 per cent from the week’s opening index of 25,510.01 points to close at 25,189.37 points. With three straight weeks of losses, the negative average year-to-date return has risen to -6.27 per cent.

Nearly all sectoral indices also declined in widespread profit-taking transactions. The NSE 30 Index, which tracks the 30 most capitalised stocks, dropped by 0.80 per cent. The NSE Banking Index declined by 1.65 per cent. The NSE Insurance Index slipped by 0.80 per cent. The NSE Consumer Goods Index dropped by 1.03 per cent while the NSE Industrial Goods Index declined by 1.38 per cent. The NSE Oil and Gas Index however played the contrarian with a modest gain of 0.60 per cent.

There were 31 losers against 24 gainers last week compared with 37 losers and 13 gainers recorded in the previous week. Fidelity Bank, which had led price rallies in recent period, topped the losers’ list with a drop of 20.59 per cent to close at 81 kobo. Seven-Up Bottling Company followed with a loss of 14.25 per cent to close at N89.95. Ecobank Transnational Incorporated dropped by 13.41 per cent to N7.10. Okomu Oil Palm declined by 9.54 per cent to N47.50 while Nascon Allied Industries dropped by 9.47 per cent to N7.74 per share.

On the upside, Transnational Corporation of Nigeria led the gainers with a gain of 22.78 per cent to close at 97 kobo. Africa Prudential followed with a gain of 9.7 per cent to close at N2.60. Stanbic IBTC Holdings rose by 9.12 per cent to N20.47. Diamond Bank added 7.14 per cent to close at 90 kobo while Unilever Nigeria rose by 6.77 per cent to N35.50.

Total turnover during eh four-day trading session stood at 896.75 million shares worth N5.92 billion in 11,185 deals, compared with a total of 1.19 billion shares valued at N6.04 billion traded in 11,820 deals two weeks ago.

The financial services sector remained the most active with 688.971 million shares valued at N3.637 billion traded in 6,374 deals; representing 76.83 per cent and 61.46 per cent of the total equity turnover volume and value respectively. The conglomerates sector followed with 105.52 million shares worth N207.18 million in 944 deals while the consumer goods sector placed third with a turnover of 45.172 million shares worth N1.139 billion in 1,569 deals.

The trio of Diamond Bank Plc, Transnational Corporation of Nigeria Plc and Law Union and Rock Insurance were the most active, jointly accounting for 335.346 million shares worth N312.960 million in 1,176 deals, representing 37.42 per cent and 5.29 per cent of the total equity turnover volume and value respectively.

Globally, equities recorded mixed performance last week as global revision in economic growths and European politics coloured the transaction trend. The International Monetary Fund (IMF), which started its Spring meetings at the weekend, during the week released its April 2017 World Economic Outlook (WEO) with revised projections for global and regional economies. IMF increased its global growth forecast for 2017 from 3.4 per cent to 3.5 per cent. The WEO also revised upward the growth forecast for the advanced economies to 2.0 per cent. It however retained the growth projection for emerging and developing economies at 4.5 per cent. The IMF predicted growth rate of 2.6 per cent for the Sub-Saharan Africa with Nigeria expected to grow by 0.8 per cent.

With the Brexit politics in United Kingdom (UK) and election in France, global equities mirrored the mix of sentiments and data during the week. The UK FTSE dropped by 2.4 per cent. In United States of America, the S & P 500 rose by 1.1 per cent while the twin index, the NASDAQ, rose faster by 1.8 per cent. France’s CAC Index declined by 0.1 per cent. Germany’s DAX Index declined by 0.3 per cent. China’s Shanghai Composite Index dropped by 2.2 per cent. Hong Kong’s Hang Seng slipped by 0.9 per cent. However, Japan’s NIKKEI Index rose by 1.6 per cent. Brazil’s IBOVESPA Index rallied a week-on-week gain of 1.5 per cent while Russia’s RTS Index appreciated by 0.9 per cent.

In Africa, it was almost a largely negative week. South Africa’s FTSE/JSE Index dropped by 2.4 per cent while the Egypt’s EGX 30 declined by 0.7 per cent. However, Kenya and Ghana played the contrarian within the top markets in the continent. Kenya’s benchmark index rose by 1.5 per cent while Ghana’s main equities index inched up by 0.2 per cent.

 

 

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