NSE RoundUp! Nigerian equities recover amidst improved corporate earnings

Nigerian equities sustained largely positive trading sessions during the week as more quoted companies released their full-year audited financial statements and reports for the 2016 business year.

Transactions at the Nigerian Stock Exchange (NSE) showed increased bargain-hunting for highly capitalised stocks and several low-priced stocks believed to have been underpriced by the recent steep decline in valuations.

Investors’ appetites were also quickened by the inflow of new corporate earnings reports, showing considerable improvements in the earnings of some leading banks, in spite of the tough macroeconomic situation. The declaration of dividends by the companies further drove demand for shares and reduced the hitherto open market sale orders.

The benchmark index at the NSE, the All Share Index (ASI), rose from its week’s opening index of 25,012.08 points to close at 25,238.01 points, representing average week-on-week gain of 0.90 per cent.

Aggregate market value of all quoted companies at the Exchange also increased from the week’s opening value of N8.656 trillion to close at N8.734 trillion, indicating a week-on-week net capital gain of N78 billion.

Most sectoral indices also showed positive outlook as investors rallied demand for fast moving consumer goods companies, in apparent bargain-hunting for stocks that had hit lows in recent period. The NSE 30 Index, which tracks the 30 most capitalised companies at the NSE, recorded a week-on-week gain of 1.34 per cent.

The NSE Banking Index returned 0.10 per cent. The NSE Insurance Index inched up by 0.03 per cent while the NSE Consumer Goods Index recorded the highest gain of 5.23 per cent. However, the NSE Oil and Gas Index declined by 2.36 per cent while the NSE Industrial Goods Index dropped by 2.94 per cent.

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As indicated by above-average performance of the NSE 30 Index, the overall market performance was largely driven by gains by highly capitalised stocks, especially in the fast moving consumer goods sector. The underlying market sentiment remained weak with more decliners than advancers and continuing dormancy of the larger proportion of quoted equities.

There were 24 gainers against 31 losers during the week compared with 24 gainers and 24 losers recorded in the previous week. a total of 122 stocks closed flat, trailing 129 stocks that were unchanged in previous week.

In a major rally, Nestle Nigeria, NSE’s highest-priced company, stepped up as the lead gainer with a gain of 16.96 per cent to close at N734.99. Unilever Nigeria followed with a gain of 11.46 per cent to close at N32.30. NEM Insurance rose by 9.64 per cent to close at 91 kobo. Honeywell Flour Mills added 5.0 per cent to close at N1.05. Continental Reinsurance rose by 4.95 per cent to close at N1.06 while Paints and Coatings Manufactures rallied by 4.84 per cent to 65 kobo.

On the downside, Africa Prudential Registrars, which was marked down for dividend payment, led the losers with a drop of 15.56 per cent to close at N2.28. United Capital followed with a decline of 15.09 per cent to close at N2.42. Nigerian Aviation Handling Company lost 12 per cent to close at N2.20. Seven-Up Bottling Company declined by 9.47 per cent to close at N86 while Livestock Feeds dropped by 9.47 per cent to close at 67 kobo per share.

Total turnover stood at 1.024 billion shares worth N12.464 billion in 16,400 deals last week compared a total of 1.387 billion shares valued at N13.726 billion traded in 15,422 deals two weeks ago.The financial services sector led the activity chart with 850.758 million shares valued at N7.083 billion in 10,358 deals; thus contributing 83.12 per cent and 56.83 per cent of the total equity turnover volume and value respectively.

The consumer goods sector followed with 78.421 million shares worth N3.900 billion in 2,545 deals. Conglomerates sector placed third with a turnover of 46.196 million shares worth N70.668 million in 536 deals.

Banks dominated the top activities’ chart with the trio of Zenith International Bank Plc, Access Bank Plc and FBN Holdings Plcjointly accounting for 412.251 million shares worth N4.234 billion in 4,633 deals, contributing 40.27 per cent and 33.97 per cent of the total equity turnover volume and value respectively.

Also, a total of 1,020 units of Exchange Traded Products (ETPs) valued at N51,316 were traded in four deals while a total of 6,686 units of Federal Government Bonds valued at N5.583 million were traded in seven deals.

The market situation was boosted by corporate earnings reports from two first tier banks, Access Bank and Guaranty Trust Bank showing improvements in both top-line and bottom-line. Access Bank declared a final dividend per share of 40 kobo while Guaranty Trust Bank announced intending payment of N1.75 per share.

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