NSE RoundUp! Nigerian equities lose N557bn in March downtrend

Investors in Nigerian equities lost total net value of about N557 billion in March as the peak of the earnings season failed to sustain the bullish start that had dominated transactions in the first two months of the year.

Benchmark indices at the Nigerian Stock Exchange (NSE) showed a market-wide downtrend, despite the release of most audited reports and accounts and dividend recommendations in March. Investors appeared to have shifted from dividend expectation in the early week of the month to sustained profit-taking selloffs, momentarily ignoring the steady improvements in corporate earnings of all the major quoted companies and increases in dividend payouts.

The All Share Index (ASI)-the common value-based index that tracks share prices at the Nigerian Stock Exchange (NSE), dropped from the month’s opening index of 43,330.54 points to close March at 41,504.51 points, representing average month-on-month decline of 4.21 per cent. Aggregate market value of all quoted equities also declined from its month’s opening value of N15.550 trillion to close the month at N14.993 trillion, indicating net capital depreciation of N557 billion.

All sectoral and group indices at the Exchange closed negative with the exception of the NSE Oil and Gas Index, which posted a month-on-month average gain of 0.95 per cent. The NSE 30 Index-which tracks the 30 most capitalised stocks, recorded above-average decline of 4.44 per cent. The NSE Banking Index recorded the highest decline with a return of -9.55 per cent. The NSE Industrial Goods Index followed with a drop of 6.77 per cent. The NSE Insurance Index dropped by 4.08 per cent while the NSE Consumer Goods Index dipped by 2.54 per cent.

The sustained decline in March depressed the average year-to-date return to a single digit gain of 8.53 per cent, from about 12 per cent recorded at the beginning of the month. Against expectations that corporate earnings and dividend recommendations would sustain the strong rally that started the equities market in January 2018, investors turned early in February to monetise accrued capital gains, triggering a profit-taking trend that extended till March.

Read also: NSE LIVE! Equities lose N159bn as average return drops to 6.69%

Nigerian equities had in mid-January 2018 rallied to all-time high of N16 trillion with the average year-to-date return at 17.37 per cent. Aggregate market value of all quoted equities had reached all-time high of N15.783 trillion, the highest in the 57 years of formal trading at the stock market. The ASI also reached a nine-year high at 44,885.24 points. At 17.37 per cent, the average year-to-date return for the 12-day trading sessions then in January 2018 totalled N2.47 trillion.

Nigeria had ended January 2018 as one of the three best-performing stock markets globally, extending the bullish run that started in 2017 with a full-year return of N4.36 trillion with additional gain of N2.287 trillion in January 2018. Average return at the Nigerian equities market stood at 15.95 per cent in January 2018, equivalent to net capital gain of about N2.29 trillion. Average month-on-month at the Nigerian equities market had more than doubled average returns in most advanced and emerging markets of America, Europe, Middle East and Africa.

Market analysts attributed the decline in March to profit-taking transactions, noting that investors appeared to be turning to their investment portfolios to finance other expenditures. But most analysts remained optimistic on the outlook for the Nigerian equities market.

“Still-positive macroeconomic fundamentals continue to strengthen our medium-to-long term outlook for Nigerian risky assets, while lower prices of value stocks suggest likely bargain-hunting in the short term,” Cordros Capital stated at the weekend.

Total turnover in March stood at 10.17 billion shares valued at N136.24 billion in 103,478 deals. Access Bank was the most active stock for the month with a turnover of 1.69 billion shares valued at N21.28 billion in 4,844 deals. Zenith Bank followed with a turnover of 1.01 billion shares worth N30.10 billion in 12,032 deals while the third place was occupied by FBN Holdings with a turnover of 971.75 million shares valued at N11.69 billion in 8,010 deals.

Nigeria’s most capitalised stocks dominated the top decliners’ list in March. NSE’s highest-priced stock-Nestle Nigeria led the decliners with a loss of N62 to close at N1,380. Nigeria’s most capitalised quoted company-Dangote Cement, followed with a drop of N9.80 to close at N260. Dangote Cement’s business rival-Lafarge Africa placed third with a drop of N6.60 to close at N45.30. Nigerian Breweries declined by N5.90 to close at N130. Guaranty Trust Bank-the second most capitalised stock, dropped by N4.30 to close at N44.70 while Ecobank Transnational Incorporated declined by N4 to close at N16.35 per share.

On the positive side, Total Nigeria led the advancers with a gain of N17 to close at N249. GlaxoSmithKline Consumer Nigeria rose by N13 to close at N34. Seplat Petroleum Development Company appreciated by N4.60 to close at N665.10. Flour Mills of Nigeria added N4.30 to close at N37.30 while Unilever Nigeria rallied N3.80 to close at N55 per share.

 

 

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