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NSE RoundUp! Nigerian equities lose N462b as global equities recover 



NSE RoundUp! Nigerian equities in slow Q3 start with N255bn loss

Nigerian equities stood alone mainly in the red last week, playing the negative contrarians in a complete reversal that left investors with net capital loss of N462 billion within the five-day trading session. As against the net capital gains of N482 billion or 4.79 per cent net week-on-week gain recorded in the previous week, sustained price depreciation shaved off N462 billion or 4.39 per cent last week.

The performance of the Nigerian equities market was the worst among tracked global advanced and emerging stock markets as global equities recovered from the knee-jerk reactions to the decision of the United Kingdom (UK) to exit the 28-nation European Union (EU).

The All Share Index (ASI), the main benchmark index for the Nigerian stock market, dropped from its week’s opening index of 30,649.66 points to close the week at 29,305.40 points. Total market value of all quoted companies on the Nigerian Stock Exchange (NSE) dropped from N10.527 trillion to close weekend at N10.065 trillion. Average year-to-date returned pared down to 2.32 per cent.

With more than two losers for every gainer during the week, price trend analysis showed widespread sell-off across the sectors as the enthusiasms that trailed Central Bank of Nigeria (CBN)’s commencement of a ‘free market’ foreign exchange (forex) regime failed to sustain equities’ rally.

The NSE Banking Index recorded above-average week-on-week depreciation of 5.38 per cent. The NSE Insurance Index declined by 0.46 per cent. The NSE Consumer Goods Index dropped by 5.07 per cent. The NSE Oil and Gas Index lost 3.72 per cent. The NSE Industrial Goods Index slipped by 4.50 per cent. The NSE 30 Index, which tracks the 30 most capitalised stocks, dropped by 4.64 per cent. The NSE Pension Index, which tracks stocks specially screened in line pension funds investment guidelines, also depreciated by 4.04 per cent while the NSE Lotus Islamic Index, which tracks Islamic-compliant stocks, dropped by 1.65 per cent.

Read also : NSE LIVE! Equities suffer reversal with N74b loss

Market pundits generally attributed the decline last week to month-end portfolio rebalancing, reluctance and delay in the return of foreign investors that had left due to previous forex regime and subsisting concerns over the implications of the UK’s EU exit referendum, popularly known as Brexit.

The performance at the NSE contrast sharply with the global equities market outlook as stocks rebound across Europe, Asia to America. The UK FTSE Index rebounded with a gain of 5.9 per cent as Britain braced up for economic challenges from the Brexit decision. Other European markets also showed substantial rebound. France’s CAC Index appreciated by 4.0 per cent. Germany’s DAX Index showed average growth of 2.0 per cent. In the United States of America (USA), the two major indices- NASDAQ Index and S&P 500 Index appreciated by 3.4 per cent and 3.3 per cent respectively. In Asia, Japan’s Nikkei Index rose by 4.9 per cent while the Hong Kong Hang Seng appreciated by 2.6 per cent.

In the emerging markets bloc of Brazil, Russia, India, China and South Africa (BRICS), the sentiments were also positive. Brazil’s Ibovespa Index rose by 3.4 per cent. Russia’s RTS Index appreciated by 3.1 per cent. China’s Shanghai gained 2.7 per cent. India’s Bombay Stock Exchange (BSE) Index rose by 2.8 per cent while South Africa’s JSE/FTSE Index inched up by 1.4 per cent.

But African markets were most in the red. Besides Nigeria, the Egypt’s EGX Index depreciated by 3.0 per cent while Kenya’s Nairobi Stock Exchange (NSE) indicated average decline of 1.8 per cent. However, Ghana Stock Exchange (GSE) Index inched up by 0.6 per cent.

On the Nigerian stock market, total turnover last week slowed down to 1.47 billion shares worth N17.06 billion in 21,246 deals as a total of 2.39 billion shares valued at N26.38 billion traded in 28,072 deals two weeks ago. The financial services industry led the activity chart with 1.17 billion shares valued at N10.24 billion in 12,697 deals; contributing 79.6 per cent and 60.0 per cent of the total equity turnover volume and value respectively. The three most active stocks were Guaranty Trust Bank Plc, FBN Holdings Plc and Transnational Corporation of Nigeria Plc, which altogether accounted for 523.549 million shares worth N6.539 billion in 5,223 deals, representing 35.65 per cent and 38.32 per cent of the total equity turnover volume and value respectively.

There were 22 gainers and 52 losers last week as against 40 gainers and 32 losers recorded in the previous week. A total of 106 equities remained unchanged last week compared with 108 equities recorded in the previous week. Julius Berger Nigeria led the gainers with a gain of 15.75 per cent to close at N50.93. Conoil followed with a gain of 15.68 per cent to close at N25.45. Union Dicon Salt rose by 15.67 per cent to close at N17.35. Berger Paints appreciated by 10.12 per cent to N8.05 while Red Star Express added 9.14 per cent to close at N4.30 per share.

On the negative side, Smart Products Nigeria recorded the highest percentage loss of 25.49 per cent to close at 76 kobo. Honeywell Flour Mills dropped by 22.60 per cent to close at N1.61. Champion Breweries declined by 14.86 per cent to close at N4.24 per share. AG Leventis Nigeria dropped by 13.39 per cent to 97 kobo while Unity Bank declined by 13.16 per cent to 99 kobo.

“The euphoria which came with the re-introduction of some flexibility in the forex market seems to be waning, if performance of the market this week is anything to go by. Some overhanging concerns about the new policy which has left investors with “a lot to desire”, coupled with profit taking in counters that gained significantly in the past week, drove the negative performance for the week,” Afrinvest Securities, a dealer on the NSE, stated in a weekend note.

Analysts said the performance of the market was indicative of the fact that investors might have overreacted to the recent forex reform.

“We expect market performance to remain soft as investors await further development in the forex market,” Afrinvest Securities stated on the outlook for the equities.




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