NSE Roundup! Nigerian equities in top global rally with N546b gain

It was a good week for the Nigerian investors. The beleaguered Nigerian investors heaved a sigh of relief last week as a rally triggered and fuelled by dividend expectations sustained an all-week price appreciation that saw Nigerian equities closing among the best-performing stocks worldwide.

While the market sentiments continued to be weighed down by losses in the past 26 months, the earnings season has rekindled investors’ appetite for otherwise attractive undervalued Nigerian stocks. Nigerian stock market lost N1.75 trillion in 2014 and followed this with additional loss of N1.63 trillion in 2015. In the past two months in 2016, the stock market has lost about N1.4 trillion.

Key indices at the Nigerian Stock Exchange (NSE) showed a dramatic improvement in the overall market situation as equities staged their biggest rally so far this year. The benchmark index for the Nigerian stock market, the All Share Index (ASI)-a common-share value-based index that tracks prices of all quoted equities, indicated a week-on-week gain of 6.57 per cent, equivalent to a gain of N546 billion.

Nigeria’s performance ranked second on the global scale of tracked advanced and emerging stock markets, following Brazil, which Ibovespa Index recorded a gain of 18.9 per cent. Investors globally were on the push as concerns over global growth, China’s bubble, crude oil and emerging economies’ foreign exchange management eased.

Read also: NSE LIVE! Equities maintain upswing amidst bargain-hunting

Analysis of select global stock markets indicated largely positive market situation across the advanced and emerging markets. In United Kingdom, the UK FTSE Index rose by 1.8 per cent. In United States, the S&P 500 and NASDAQ rose by 2.3 per cent and 2.5 per cent. In the emerging markets, The India BSE Sens rose by 6.4 per cent. Russia RTS Index gained 4.8 per cent. South Africa’s FTSE/JSE Index rose by 5.3 per cent. In Africa, Kenya’s All Share Index rose by 2.8 per cent. Egypt’s RGX closed flat while the Ghana Stock Exchange Composite Index was a contrarian with a drop of 0.4 per cent.

Aggregate market value of all quoted equities on the NSE rose from the week’s opening value of N8.336 trillion to close at N8.882 trillion, representing an increase of N546 billion. The ASI closed at 25,820.10 points as against its week’s opening index of 24,228.79 points, indicating a week-on-week gain of 6.57 per cent.

The Nigerian stock market was boosted by dividend recommendations by three companies, especially the N136.3 billion dividend announcement by Dangote Cement Plc. The board of Dangote Cement said shareholders would receive a dividend per share of N8. Africa Prudential Registrars also announced a final dividend per share of 43 kobo. Greif Nigeria Plc also declared a dividend per share of 60 kobo during the week.

Most analysts agreed that the dividend recommendation by Dangote Cement was a major spur for the market as it brought home to many investors on the sidelines the possible dividend yields from the largely undervalued stocks.

The dividend recommendations and expectations that other companies might announce their results and dividends quickened investors’ appetite, triggering a cross-sectoral bargain-hunting for equities with prospects for high dividend yields.

Cross sectoral analysis showed widespread positive sentiments. The NSE Premium Index, which tracks Dangote Cement, FBN Holdings and Zenith Bank International, recorded the highest gain of 20.67 per cent. The NSE 30 Index, which tracks the 30 most capitalised stocks, rallied 4.39 per cent. The NSE Banking Index appreciated by 5.45 per cent. The NSE Insurance Index returned 1.42 per cent. The NSE Lotus Islamic Index, which tracks stocks that comply with Islamic investment rules, appreciated by 6.39 per cent. The NSE Industrial Goods Index rose by 11.38 per cent while the NSE Pension Index appreciated by 0.37 per cent. However, the NSE Main Board Index, NSE Consumer Goods Index and NSE Oil and Gas Index depreciated by 0.54 per cent, 1.36 per cent and 6.10 per cent respectively.

There were 35 gainers against 24 losers last week as against 21 gainers and 35 losers recorded in the previous week. A total of 130 stocks were flat as against 134 stocks that closed flat in the previous week. Tiger Branded Consumer Company recorded the highest gain, in percentage terms, with a gain of 30.3 per cent to close at N1.72. United Capital followed with a gain of 29.55 per cent to close at N1.71.
Africa Prudential Registrars rallied 27.73 per cent to close at N3.27. Dangote Cement rose by 24.44 per cent to close at N168 while Ecobank Transnational Incorporated rallied 14.35 per cent to close at N18.25 per share.

On the negative side, Forte Oil recorded the highest loss of 14.26 per cent to close at N293.23. FCMB dropped by 10.13 per cent to close at 71 kobo. Conoil dropped by 9.71 per cent to close at N16.56. Ikeja Hotel lost 9.60 per cent to close at N2.73 while Wema Bank dropped by 9.38 per cent to close at 87 kobo.

Total turnover stood at 1.48 billion shares worth N7.99 billion in 15,743 deals last week as against a total of 4.48 billion shares valued at N11.74 billion traded in 14,124 deals two weeks ago. The financial services sector remained the most active with 1.32 billion shares valued at N5.59 billion in 9,955 deals, representing 89.36 per cent and 69.94 per cent of the total equity turnover volume and value respectively. The conglomerates sector staged a distant sector with a turnover of 50.81 million shares worth N108.3 million in 557 deals. The third place was occupied by the consumer goods sector with a turnover of 49.655 million shares worth N1.376 million in 2,434 deals.

The trio of Wapic Insurance Plc, FCMB Holding Plc and Access Bank Plc were the most active, in terms of volume, jointly accounting for 578.24 million shares worth N933.53 million in 1,424 deals, representing 39.18 per cent and 11.68 per cent of the total equity turnover volume and value respectively.

Also traded last week were a total of 40,021 units of Exchange Traded Products (ETPs) valued at N1.885 million executed in 44 deals, compared with a total of 14,844 units valued at N14.134 million traded in 29 deals.

A total of 4,063 units of Federal Government Bonds valued at N4.903 million were traded in three deals compared to a total of 4,990 units of Federal Government Bonds valued at N5.799 million traded in two deals two weeks ago.

Analysts at FSDH Securities, GTI Securities, Cowry Asset Management, SCM Capital Markets and Afrinvest Securities among others were positive that earnings and dividend recommendations would continue to impact on the market situation in the days ahead.

“The improved performance of the market this week is line with our expectation of bargain hunting in blue chips with dividend payment history. We expect performance would be swayed by earnings releases next week with a positive bias to sentiment,” Afrinvest Securities, a Lagos-based member of the NSE, stated.

Meanwhile, average year-to-date return at the Nigerian stock market improved last week, though still negative, at -9.85 per cent.

 

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