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NSE RoundUp! Nigerian equities net N144bn gain amidst global equities rally

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NSE RoundUp! Nigerian equities net N144bn gain amidst global equities rally

Nigerian equities sustained considerable rally on the back of a global equities’ resurgence last week as investors showed improved appetite for quoted shares across the markets.

With increasing inflow of corporate earnings and the deadline for the peak of the earnings period drawing close, investors stepped up bargain-hunting for Nigerian equities, overriding the possible dampening effect of the 13.01 per cent coupon Federal Government of Nigeria Savings Bonds (FGNSB) which maiden tranche was opened last week.

Benchmark overall and sectoral indices for the Nigerian equities market showed a largely bullish market with overall market performance driven not only by rallies by highly capitalised stocks but widespread positive sentiments across sectors and stocks’ groups.

The two main indices at the Nigerian Stock Exchange (NSE), the All Share Index (ASI) and aggregate market value of all quoted equities, showed average week-on-week gain of 1.64 per cent, equivalent to net capital gain of N144 billion. With 31 advancers against 22 decliners at the end of the week, aggregate market value of all quoted equities on the NSE rose from its week’s opening value of N8.734 trillion to close at N8.878 trillion.

The ASI-a value-based common index that tracks prices at the Exchange and doubles as sovereign equities index for Nigeria, closed the week at 25,653.16 points as against its opening index of 25,238.01 points, representing average gain of 1.64 per cent.

Across the sectors, the mood was bullish. The NSE 30 Index, which tracks the 30 most capitalised companies, rallied a week-on-week gain of 1.37 per cent. The NSE Banking Index recorded above average gain of 2.36 per cent. The NSE Insurance Index followed with a gain of 2.11 per cent.

The NSE Industrial Goods Index rallied 1.53 per cent while the NSE Oil & Gas Index inched up by 0.70 per cent. However, the NSE Consumer Goods Index slipped by 0.02 per cent.

On price changes, Diamond Bank recorded the highest gain, in percentage terms, of 16.05 per cent to close at 94 kobo. United Capital followed with a gain of 15.7 per cent to close at N2.80. Continental Reinsurance rose by 13.2 per cent to close at N1.20. Africa Prudential Registrars added 9.65 per cent to close at N2.50 while United Bank for Africa rose by 9.56 per cent to close at N5.50 per share.

On the downside, NEM Insurance led the losers with a loss of 10.99 per cent to close at 81 kobo. Seven-Up Bottling Company declined by 9.64 per cent to close at N77.71. Nigerian Aviation Handling Company lost 9.1 per cent to close at N2. Neimeth International Pharmaceuticals dropped by 8.96 per cent to 61 kobo. Ashaka Cement lost 8.3 per cent to close at N9.50 while Forte Oil declined by 7.2 per cent to close at N47.95 per share.

However, more than two-thirds of quoted companies remained stagnant at flat, mostly nominal, prices. Average year-to-date return, though improving, remains negative at -4.55 per cent.

Total turnover stood at 1.03 billion shares worth N7.98 billion in 13,441 deals last week compared with a total of 1.024billion shares valued at N12.46 billion traded in 16,400 deals two weeks ago.

The financial services sector remained the most active with a turnover of 853.414 million shares valued at N4.27 billion in 7,904 deals; representing 82.9 per cent and 53.5 per cent of the total equity turnover volume and value respectively. The oil and gas sector placed a distant second on the activities chart with a turnover of 80.25 million shares worth N1.15 billion in 1,443 deals while the conglomerate sector ranked third with 45.77 million shares worth N83.47 million in 596 deals.

The trio of Diamond Bank, FBN Holdings and Fidelity Bank accounted for 397.225 million shares worth N546.50 million in 1,680 deals, representing 38.59 per cent and 6.85 per cent of the total equity turnover volume and value respectively.

Also traded during the week were a total of 20 units of Exchange Traded Products (ETPs) valued at N90.90 in two deals compared with a total of 1,020 units valued at N51,316 traded in four deals two weeks ago.

In the debt segment, a total of 8,390 units of Federal Government bonds valued at N8.203 million were traded in four deals compared with a total of 6,686 units valued at N5.583 million traded in seven deals in the previous week.

The overall performance at the Nigerian stock market fell broadly within the bullish sentiments across global emerging and advanced markets. In Africa, most equities closed on the upside on the back of renewed bargain-hunting. South Africa’s FTSE/JSE Index led with a week-on-week gain of 2.4 per cent. Egypt’s EGX 30 Index rose by 1.0 per cent. Ghana’s GSE Composite Index inched up by 0.2 per cent while Kenya’s Nairobi Stock Exchange (NSE) Index increased by 0.7 per cent.

In America, United States of America (USA)’s twin indices closed higher. The US S & P Index rose by 0.4 per cent while its twin index, the NASDAQ, rose by 0.7 per cent. United Kingdom’s FTSE Index appreciated by 1.1 per cent. . France’s CAC Index rose by 0.7 per cent while Germany’s DAX Index appreciated by 1.0 per cent.

Also, Russia’s RTS Index rose by 6.5 per cent. India’s BSE SENSIndex appreciated by 2.4 per cent. Brazil’s IBOVESPA Index rose by 1.5 per cent. China’s SHANGHAI Index returned 0.8 per cent while Hong Kong’s HANG SENG Index rallied by 3.1 per cent.However, Japan’s NIKKEI Index declined by 0.4 per cent.

Read also: NSE LIVE! Equities’ rally gathers momentum with N41bn gain

Meanwhile, the outlook for the Nigerian equities market remains largely unchanged by nearly analysts’ consensus, still broadly cautious in the face of the weak foreign exchange position and uncoordinated fiscal-monetary stance. With equities shrugging off the launch of the FGNSBs last week, which expectedly could draw more savings into double-digit yielding sovereign fixed-income instrument, the market is expected to come under no considerable influence from the decisions at this week’s meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN).

The MPC will be having its second meeting this year between Monday March 20 and Tuesday March 21, 2017. Most analysts expected the apex bank to maintain status quo. According to analysts at Afrinvest Securities, the apex bank will maintain status quo on all rates while trying to consolidate on the gains of recent improvements that have been recorded in inflation, parallel market foreign exchange rate, increase in oil production and the release of Economic Recovery and Growth Plan (ERGP) by the fiscal authority.

“Although both the inflation rate and foreign exchange rate have shown signs of improvement in the last few weeks, a change in monetary policy might be too soon. We believe more time is required before a monetary policy change can be effective under the current situation,” FSDH Merchant Bank Limited stated in a prognosis for status quo.

The status quo implies retaining Monetary Policy Rate (MPR) at 14.0 per cent, Cash Reserve Ratio (CRR) at 22.5 per cent, Liquidity Ratio (LR) at 30.0 per cent and the Asymmetric Window at +200 and -500 basis points.

“The implication on the markets, should the MPC maintain status quo, is expected to be neutral given that most foreign investors are staying on the side-line at the moment against the backdrop of an inefficient foreign exchange market.

Currently, the equities market remains quiet and driven only by short term speculative trading and fundamentally attractive earnings release. In the fixed income market, we expect investor appetite to remain tilted towards shorter term government securities given the high yield offering which tends to off-set current inflation risk and also inflation expectation,” Afrinvest Securities stated.

 

 

 

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