Most emerging and advanced equities markets traded in the negative as the race for the presidency of United States of America (USA) narrowed to a slim margin between the former Secretary of State Hillary Clinton and real estate billionaire Donald Trump.
With large foreign portfolio participation, around an average of 45 per cent, Nigerian stock market struggled with the global anxiety over the possible change of the government in the world’s most powerful country and domestic worries over tough macroeconomic environment and resultant weak corporate earnings.
Nigerian equities lost approximately N108 billion with average week-on-week decline of 1.15 per cent as third-quarter earnings by most companies at the stock market failed to excite investors into a sustained rally. A mid-week losing streak continued till the weekend. But the weekend listing of additional shares by Lafarge Africa moderated the net decline in aggregate market value of all quoted equities to N87 billion.
Most price changes at the Nigerian Stock Exchange (NSE) remained on the downside and a marked shift from large-cap stocks to low-priced, penny stocks further depressed the overall market situation, which is highly susceptible to losses by a handful of large-cap stocks.
The All Share Index (ASI), the benchmark index that tracks prices at the NSE and doubles as Nigeria’s sovereign equities index, declined from its week’s opening index of 27,294.21 points to close the week at 26,981.60 points, representing average weekly decline of 1.15 per cent. Aggregate market value of all quoted equities on the NSE also dropped from the week’s value-on-board of N9.375 trillion to close at N9.288 trillion.
Most sectoral indices at the stock market showed widespread selling pressure as investors continued to react to weak macroeconomic and corporate data as well as global uncertainties over the shift in US governance to Republican Party. The NSE 30 Index, which tracks the 30 most capitalised stocks, declined by 1.27 per cent. The NSE Banking Index dropped by 3.22 per cent.
The NSE Consumer Goods Index declined by 0.27 per cent. The NSE Oil and Gas Index depreciated by 3.99 per cent while the NSE Pension Index slipped by 1.13 per cent. However, the NSE Insurance Index appreciated by 1.29 per cent while the NSE Industrial Goods Index rose by 2.98 per cent.
There were 24 gainers against 37 losers last week as against 21 gainers and 41 losers in the previous week. A total of 120 stocks remained unchanged, almost on the range of 118 stocks recorded in the previous week. Oando led the losers with a drop of 16.7 per cent to close at N4.33. University Press declined by 15.1 per cent to close at N3.89. UACN Property Development Company dropped by 13.9 per cent to close at N2.80. Ashaka Cement depreciated by 9.7 per cent to N11.07 while DN Meyer declined by 8.8 per cent to close at 83 kobo per share.
On the positive side, Learn Africa recorded the highest gain of 23.4 per cent to close at 79 kobo. Airline Services and Logistics followed with a gain of 15.5 per cent to close at N2.54. Okomu Oil Palm rose by 14.6 per cent to close at N47. MRS Oil Nigeria appreciated by 13.8 per cent to close at N45.51 while Dangote Flour Mills rose by 11.7 per cent to close at N3.92 per share.
Investors showed preference for low-priced equities as bargain-hunting shifted from emphasis on liquidity to stocks with potential for higher dividend yield and capital appreciation.
Total turnover stood at 873.838 million shares worth N8.024 billion in 15,944 deals last week as against a total of 678.710 million shares valued at N6.875 billion traded in 11,808 deals two weeks ago. The financial services sector led the activity chart with 654.180 million shares valued at N2.837 billion traded in 9,835 deals; thus contributing 74.86 per cent and 35.36 per cent to the total equity turnover volume and value respectively. The consumer goods sector followed with 74.722 million shares worth N4.141 billion in 2,367 deals. The third place was occupied by the conglomerates sector with a turnover of 61.617 million shares worth N93.366 million in 666 deals.
Low-priced stocks dominated transactions. Three stocks which trade around N1 were the most active last week. The trio of Sterling Bank Plc, FCMB Group Plc and Transnational Corporation of Nigeria Plc topped the activity chart, altogether accounting for 250.205 million shares worth N237.138 million in 3,654 deals, contributing 28.63 per cent and 2.96 per cent of the total equity turnover volume and value respectively.
Also traded during the week were a total of 56,688 units of Exchange Traded Products (ETPs) valued at N817,310 in 31 deals compared with a total of 5.079 million units valued at N49.828 million traded in 57 deals two weeks ago.
In the debt segment, a total of 13,020 units of Federal Government Bonds valued at N12.953 million were traded in 14 deals compared to a total of 4,100 units of Federal Government Bonds valued at N4.287 million traded in three deals two weeks ago.
Globally, quoted equities were in the red as the November 8 US presidential election draws to a tight race between Hillary and Donald. Morgan Stanley’s MSCI All Country World Index slumped to its lowest index point in four months while the US main gauge, S & P 500 Index recorded eight successive negative closing, its longest losing cycle in eight years. The S & P 500 Index declined by 1.8 per cent while its twin indicator, NASDAQ, dropped by 2.5 per cent. In United Kingdom, the UK FTSE dropped by 3.8 per cent.
In Europe, Germany’s DAX Index slumped by 4.4 per cent. France’s CAC Index dropped by 3.9 per cent while Russia’s RTS declined by 1.5 per cent.
In Asia, Japan’s NIKKEI Index fell by 3.1 per cent while Hong Kong’s HANG-SENG Index dropped by 1.4 per cent. Africa showed mixed performance. South Africa’s FTSE/JSE Index dropped by 2.1 per cent while Ghana’s GSE Composite Index closed flat. Meanwhile, Egypt’s EGX Index rallied by 5.6 per cent while Kenya’s Nairobi Stock Exchange composite index rose by 1.8 per cent.
Most analysts expected the Nigerian stock market to trade on mixed of bargain-hunting and speculations in the weeks ahead as investors seek to lock in into undervalued stocks ahead of expected December rally. With more than 90 per cent of expected third quarter earnings already released, price attraction will play more roles in determining price discovery in the next trading sessions than corporate earnings.
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