There appeared to be few safe havens for investors across the world in the immediate past week as global equities sustained deep cut amidst concerns over international developments and price corrections.
Nigerian equities lost N542 billion in a weeklong consecutive decline that pared the average year-to-date return to 12.77 per cent.
Benchmark indices at the Nigerian Stock Exchange (NSE) indicated average week-on-week return of -3.39 per cent, equivalent to net capital loss of N542 billion. With nearly three decliners for every advancer, aggregate market value of all quoted equities at the NSE declined from its week’s opening value of N16.019 trillion to close at N15.477 trillion. The All Share Index (ASI)-the common value-based index that tracks share prices at the Exchange, also declined correspondingly from the week’s opening index of 44,639.99 points to close the week at 43,127.92 points.
The downtrend at the Nigerian equities market mirrored the bearishness that pervaded the global equities markets during the week, with Nigerian equities showing a bit of restraint compared with the large losses suffered by other advanced and emerging markets.
From America to Europe, Middle East and Africa, global equities traded largely negative as investors booked profits and pundits raised cautions over possible increased attractiveness of global fixed-income securities and fluctuations in the crude oil market. In United States of America, the S & P 500 Index and NASDAQ Index declined by 6.6 per cent and 6.4 per cent respectively. Also, the Dow Jones Industrial Average (DJIA) depreciated by 6.51 per cent. In United Kingdom, the FTSE 100 dropped by 4.3 per cent.
In Europe, Germany’s DAX Index declined by 5.3 per cent while France’s CAC 40 Index dropped by 5.2 per cent. In Asia, Japan’s Nikkei 225 Index plunged by 8.1 per cent while Hong Kong’s HANG SENG Index fell by 9.6 per cent.
Emerging markets of Brazil, Russia, India, China and South Africa (BRICS) also showed steep decline. Brazil’s IBOVESPA Index dropped by 3.4 per cent. Russia’s RTS Index dipped by 6.6 per cent. India’s BSE Sens declined by 3.0 per cent. China’s Shanghai Composite Index nosed down by 9.6 per cent while South Africa’s FTSE/JSE All Share Index depressed by 4.9 per cent.
In Africa, Ghana played the only contrarian market with average gain of 3.4 per cent. Meanwhile, Egypt’s EGX Index lost 1.1 per cent while Kenya’s Nairobi Stock Exchange 20 Index slipped by 0.3 per cent.
Continental and global group indices also underlined the broadly negative market performance during the week. Asia’s CSI 300 Index slumped by 10.1 per cent. Europe’s Euro Stoxx 50 Index dropped by 5.46 per cent. The MSCI EM-which tracks emerging markets-dropped by 5.5 per cent while the MSCI Frontier Markets Index depreciated by 2.98 per cent.
Further analysis of the Nigerian market showed a market-wide selloff. All sectoral indices at the NSE closed in the red. The NSE 30 Index-which tracks Nigeria’s 30 most capitalised stocks, declined by 3.59 per cent. The NSE Banking Index depreciated by 3.41 per cent. The NSE Insurance Index declined by 0.73 per cent. The NSE Consumer Goods Index dipped by 2.60 per cent. The NSE Oil and Gas Index posted a return of -4.61 per cent while the NSE Industrial Goods Index lost 3.52 per cent.
There were 64 decliners against 23 advancers last week as against 49 advancers and 42 decliners recorded in the previous week. Consolidated Hallmark Insurance led the decliners with a drop of 27.1 per cent to close at 35 kobo. Skye Bank followed with a loss of 25.2 per cent to close at N1.07. Unic Diversified Holdings dropped by 21.7 per cent to 36 kobo. Multiverse Mining and Exploration depreciated by 16.7 per cent to 40 kobo. WAPIC Insurance dropped by 14.7 per cent to 64 kobo. Wema Bank fell by 14 per cent to N1.29. FBN Holdings lost 13.4 per cent to close at N12 while Japaul Oil & Maritime Services declined by 12.5 per cent to 42 kobo.
On the positive side, Linkage Assurance led the advancers with a gain of 25 per cent to close at 85 kobo. Caverton Offshore Support Group followed with a gain of 21 per cent to close at N3. Prestige Assurance rose by 16.7 per cent to close at 56 kobo. Unity Bank rallied by 10.24 per cent to N1.83 while Trans-Nationwide Express appreciated by 9.9 per cent to close at 89 kobo per share.
The momentum of activities declined with a total turnover of 4.43 billion shares worth N24.24 billion in 29,573 deals last week compared with a total of 3.27 billion shares valued at N28.12 billion traded in 35,761 deals in the previous week. The financial services sector was the most active sector with a turnover of 4.005 billion shares valued at N16.50 billion traded in 19,035 deals; representing 90.5 per cent and 68.1 per cent of the total equity turnover volume and value respectively. The conglomerates sector followed with 167.72 million shares worth N464.66 million in 1,568 deals while consumer goods sector ranked third with a turnover of 137.66 million shares worth N5.33 billion in 4,982 deals.
The trio of Sterling Bank, Skye Bank and FCMB Group were the most active, accounting for 2.52 billion shares worth N5.28 billion in 3,000 deals, representing 56.95 per cent and 21.77 per cent of the total equity turnover volume and value respectively.
Also traded during the week were a total of 1.20 million units of Exchange Traded Products (ETPs) valued at N6.95 million in 10 deals, compared with a total of 32,189 units valued at N1.3 million traded in 19 deals penultimate week.
In the sovereign debt market, a total of 14,779 units of Federal Government Bonds valued at N14.05 million were traded in 18 deals compared with a total of 16,268 units valued at N17.05 million traded in 28 deals two weeks ago.
Most analysts expected Nigerian equities to stage a rebound, citing the bargains created by the steep decline and the impending corporate earnings.
“We expect the equity market to rebound next week as investors take advantage of the oversold positions in the market,” FSDH Securities stated.
Analysts at Afrinvest Securities noted that although the market closed the week negative, “we expect to see a rebound as a result of bargain hunting by investors as well as positive expectations for the full year earnings season”.
Analysts at Cordros Capital said the favourable relative valuations of the Nigerian equities with a current Price-Earnings Ratio of 13.73 as well as strengthening fundamentals support attractiveness of the Nigerian equities market.
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