Nigerian equities broke a running downtrend with a modest gain in the immediate past week as global equities markets sustained their rally on the back of rising crude oil price and stable economic outlook.
Sovereign indices for the Nigeria equities market indicated a week-on-week return of 0.21 per cent for the week, equivalent to net capital gain of N31 billion for Nigerian equities. The rebound, though marginal, nudged the average year-to-date return for Nigerian equities to 7.02 per cent. With almost a tit-for-tat tight trading of nearly one advancer for one decliner, the overall market situation at the Nigerian stock market however remained tenuous.
Most analysts said they expected steady improvement in corporate earnings, improving macroeconomic performance and attractive valuations for Nigerian equities to drive positive market performance in the weeks ahead.
“Despite subsisting weak sentiment, we maintain our near term positive outlook on the market. Hence, in the coming week, we expect market performance to be driven by increased bargain hunting as already witnessed this week,” Afrinvest Securities stated in a weekend investment note.
The All Share Index (ASI)-the benchmark value-based index that tracks share prices at the Nigerian Stock Exchange (NSE), rose from its week’s opening index of 40,841.14 points to close the week at 40,928.70 points. Aggregate market value of all quoted equities also rose correspondingly from the week’s opening value of N14.753 trillion to close the week at N14.784 trillion.
The positive overall market position was driven largely by gains in the industrial goods and oil and gas sectors. With 37 advancers to 38 decliners, most other sectoral indices closed in the negative, underlining the fluctuation between bargain-hunting and a running profit-taking trend.
The NSE 30 Index-which tracks 30 most capitalised stocks, recorded a decline of 0.44 per cent for the week. The NSE Banking Index declined by 2.22 per cent. The NSE Insurance Index dropped by 0.76 per cent while the NSE Consumer Goods Index depreciated by 0.69 per cent. However, the NSE Oil and Gas Index rallied a five-day average gain of 3.85 per cent while the NSE Industrial Goods Index rose by 1.27 per cent.
Learn Africa recorded the highest gain, in percentage terms, with a gain of 18.56 per cent to close at N1.15. 11 Plc, formerly Mobil Oil Nigeria, followed with a gain of 17.65 per cent to close at N200. Oando, which was left off the hook of technical suspension during the week, ranked third with a gain of 15.2 per cent to close at N6.90. Cement Company of Northern Nigeria appreciated by 13.48 per cent to close at N20.20 while Japaul Oil & Maritime Services rose by 13.33 per cent to close at 51 kobo per share.
On the negative side, C & I Leasing led the decliners with a drop of 18.02 per cent to close at N1.41. Consolidated Hallmark Insurance followed with a drop of 14.7 per cent to close at 29 kobo. Unilever Nigeria dropped by 13.04 per cent to N52. NEM Insurance Company declined by 11.11 per cent to close at N2.40 while United Bank for Africa lost 10.5 per cent to close at N10.65 per share.
Total turnover stood at 1.415 billion shares worth N19.644 billion in 20,659 deals last week as against a total of 1.765 billion shares valued at N26.562 billion traded 20,265 deals two weeks ago.Financial services sector led the activity chart with 1.136 billion shares valued at N12.336 billion traded in 12,240 deals; thus contributing 80.26 per cent and 62.80 per cent to the total equity turnover volume and value respectively. The consumer goods sector followed with 103.975 million shares worth N5.723 billion in 3,369 deals while the oil and gas sector ranked third with a turnover of 51.007 million shares worth N436.610 million in 1,417 deals.
The three most active stocks-in terms of volume, were Zenith International Bank Plc, Sovereign Trust Insurance Plc and Skye Bank Plc. The three most active stocks jointly accounted for 437.704 million shares worth N5.609 billion in 2,659 deals, contributing 30.93 per cent and 28.55 per cent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 616,587 units of Exchange Traded Products (ETPs) valued at N9.185 million in 21 deals compared with a total of 125,282 units valued at N2.835 million that was traded in 11 deals two weeks ago.
In the sovereign debt market, a total of 2,500 units of Federal Government bonds valued at N2.367 million were traded in 10 dealslast week compared with a total of 4,457 units valued at N4.247 million traded in 13 deals penultimate week.
“Still-strengthening macroeconomic fundamentals and declining fixed income yields continue to strengthen our medium-to-long term outlook for Nigerian risky assets, while relatively lower prices of value stocks buoy likelihood of bargain-hunting in the short term,” Cordros Capital stated, marinating its positive outlook for Nigerian equities.
The performance of the Nigerian equities market aligned with the optimism at the global markets as investors showed improved appetite for equities across the continents. In United States of America, the S & P 500 rose by 2.7 per cent. The NASDAQ appreciated by 3.3 per cent while the Dow Jones Industrial Average appreciated by 2.66 per cent. In United Kingdom, the FTSE appreciated by 1.2 per cent. In the Eurasia region, most markets traded in the green. Germany’s XETRA DAX rose by 1.9 per cent. France’s CAC 40 Index appreciated by 1.3 per cent. Japan’s Nikkei 225 Index rose by 1.0 per cent while Hong Kong’s Hang Seng Index rallied by 3.2 per cent. The broader Euro Stoxx Index-which tracks European stocks, indicated average gain of 1.48 per cent.
In the emerging markets bloc of Brazil, Russia, India, China and South Africa (BRICS), investors continued to show positive sentiments for equities, though the brewing diplomatic crisis between USA and Russia cast a shadow on the bloc. India’s BSE Sens Index rose by 1.7 per cent. China’s Shanghai Composite Index inched up by 0.9 per cent while South Africa’s FTSE/JSE All ShareIndex appreciated by 1.6 per cent. However, Russia’s RTS Index dipped by 10.6 per cent while Brazil’s Ibovespa Index dipped by 0.1 per cent.
Most other African markets trended on the same trend with Nigeria. Egypt’s EGX 30 Index rose by 0.7 per cent. Ghana’s GSE Composite Index posted a return of 1.1 per cent while Kenya’s NSE 20 Index closed the week flat.
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