Investors increased stakes on Nigerian equities and the Nigerian stock market rose against the downtrend that started this month to a modest gain in the second week, in a week marked by declines in advanced global equities markets and many emerging markets.
Benchmark indices showed that the Nigerian stock market traded mostly on the positive, although the overall market position was driven largely by gains recorded by some highly capitalised stocks. The All Share Index, the benchmark index for the stock market, indicated a week-on-week return of 0.09 per cent to close the week at 27,861.03 points as against its opening index of 27,835.22 points for the week.
Aggregate market value of all quoted equities rose from N9.561 trillion to close at N9.570 trillion, indicating modest week-on-week net capital gain of N9 billion. The stock market had lost N172 billion in the first week of the month.
Investors also upped demand for Nigerian equities last week as turnover volume and value on the Nigerian Stock Exchange rose by 24 per cent and 45.5 per cent respectively. Investors staked N9.25 billion on 1.16 billion shares in 14,992 deals last week as against a total of 934.905 million shares valued at N6.36 billion traded in 12,352 deals two weeks ago.
The momentum of activities at the stock market was driven largely by bargain-hunting transactions for low-priced banking stocks. The trio of Access Bank Plc, Diamond Bank Plc and United Bank for Africa (UBA), were the most active stocks, altogether accounting for 522.74 million shares worth N1.95 billion in 1,914 deals, representing 45 per cent and 21 per cent of the total equity turnover volume and value respectively.
Sectoral analysis showed that the financial services sector accounted for 88 per cent and 64 per cent of the turnover volume and value respectively with the exchange of 1.022 billion shares valued at N5.89 billion in 8,812 deals. The conglomerates sector staged a distant second with 61.569 million shares worth N141.308 million in 633 deals. The consumer goods sector placed third with 33.09 million shares worth N2.017 billion in 2,642 deals.
Trading data showed improvements across other non-ordinary shares segments of the stock market. A total of 119,743 units of Exchange Traded Products (ETPs) valued at N600, 589 were traded in 25 deals last week compared with a total of 184 units valued at N2, 077 traded in 16 deals in the previous week.
In the debt segment, a total of 1,510 units of Federal Government Bonds valued at N1.558 million were traded in a deal compared to a total of 580 units of Federal Government Bonds valued at N N576, 723 traded in two deals two weeks ago.
Price trend analysis showed modest rallies across most sectors.
The NSE Premium Index, which tracks the trio of Dangote Cement, FBN Holdings and Zenith Bank, recorded a week-on-week gain of 0.58 per cent. The NSE 30 Index, which tracks the 30 most capitalised stocks, rose by 0.25 per cent. The NSE Banking Index led the rally with a gain of 1.95 per cent. The NSE Consumer Goods Index rose by 0.57 per cent.
The NSE Oil and Gas Index appreciated by 0.25 per cent while the NSE Pension Index returned a week-on-week gain of 0.11 per cent. However, the NSE Insurance Index depreciated by 0.55 per cent while the NSE Industrial Goods Index dwindled by 3.59 per cent.
The number of advancers remained flattish at 22 stocks while the number of decliners increased from 35 stocks two weeks ago to 42 stocks last week. This underlined the fact that the market was driven by large-cap stocks.
Beyond Nigeria, African equities were largely on the positive side last week. In Egypt, the Egyptian EGX 30 index showed a gain of 1.6 per cent while Ghana’s GSE Index inched up by 0.1 per cent. Kenyan equities remained down at 0.6 per cent.
In the advanced markets, the United States of America’s twin indicators, S & P Index and NASDAQ, declined by 0.2 per cent and 1.0 per cent respectively. In the United Kingdom, the UK FTSE Index dropped by 0.2 per cent. In Europe, the market was largely on the upside. France’s CAC 40 Index indicated a gain of 0.8 per cent. Germany’s XETRA DAX Index rose by 0.9 per cent. In Asia, Hong Kong’s HANG-SENG Index declined by 2.6 per cent while Japan’s Nikkei Index closed flat.
In the emerging markets bloc of Brazil, Russia, India, China and South Africa (BRICS), transactions were on negative sentiments. Brazil and Russia closed flat. South Africa’s FTSE/JSE Index declined by 1.2 per cent while India’s BSE SENS Index dropped by 1.4 per cent. China SHANGHAI Index however appreciated by 2.0 per cent.
Analysts remained cautious on the outlook for the Nigerian equities market. More corporate earnings are expected to be released this week, and these will expectedly intervene in the pricing dynamics.
“This week, we expect a mix of bargain hunting and profit taking activities,” analysts at Cowry Asset Management stated.
“With the anticipation of more third quarter 2016 earnings yet to be submitted, we expect performance to be broadly driven by further influx of third quarter 2016 earnings,” analysts at Afrinvest Securities added.
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