Equities market continues bearish trend, dips by N137bn

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Story by Olabode Jegede

Equities market of the Nigerian Stock Exchange (NSE) continued its bearish movement to lose N136.9 billion as most stocks listed remained undervalued.

Similarly, the stock market benchmark index, NSE All Share Index (ASI) dropped by 364.19 basis points or 1.25 per cent to close the week at 28,847.81 basis points from 29,212.00 basis points it opened for trading.

Data gathered on the NSE showed that the market capitalisation, which represents investors’ worth in the market, dropped by 1.25 per cent to close at N10.842 trillion from N10.979 trillion it opened for trading in prior week.

The ASI Year-To-Date (YTD) index return dipped to 8.22 per cent from 7.06 per cent of prior week.

Market analysts expressed that the week is expected to boost market liquidity as foreign and domestic investors’ interest in the capital market  going forward.

“Amidst expectation of the formal listing of about 4.07 billion unit ordinary shares of MTN Nigeria this week Thursday, we expect positive market reactions to this development, especially towards the tail end of the week,” GTI Securities Limited stated.

Overall, a total turnover of 1.477 billion shares worth N10.876 billion in 20,740 deals were traded this week by investors on the floor of the Exchange in contrast to a total of 1.470 billion shares valued at N15.498 billion that exchanged hands last week in 18,092 deals.

The Exchange revealed that 18 equities appreciated in price during the week, lower than 32 in the previous week. 49 equities depreciated in price, higher than 44 equities of the previous week, while 101 equities remained unchanged, higher than 92 equities recorded in the preceding week.

A total of 97,154 units of Exchange Traded Products (ETPs) valued at N1.318 million executed in 2 deals compared with a total of 1.190 million units valued at N10.967 million transacted in 12 deals two weeks ago.

Meanwhile, a total of 265 units of Federal Government Bonds valued at N281,654.91 were traded last week in 5 deals compared with a total of 14,589 units valued at N15.164 million transacted in 12 deals two week ago.

Sectoral analysis showed widespread negative sentiments as investors sell pressures extended in highly capitalized stocks. The NSE 30 index, which tracks the 30 most capitalized companies at the Exchange, posted a negative return of 1.43 per cent for the week.

The NSE Oil & Gas index was the biggest loser, dropped 5.3 per cent due to losses in Seplat (10 per cent) and Japaul Oil (33.3 per cent). The NSE Banking index trailed, declining 2.8 per cent as Zenith Bank (4.8 per cent), Guaranty Trust Bank (4.3 per cent) and United Bank for Africa (3 per cent) witnessed price depreciation.

The Insurance and Industrial Goods Indices dropped 1.7 per cent and 0.8 per cent respectively as sell-offs persisted in AXA Mansard (9.5 per cent), Goldlink Insurance (36.1 per cent), Dangote Cement (0.6 per cent) and Cement Company Northern Nigeria (3.5 per cent). Also, the Consumer Goods index declined 0.2 per cent due to profit-taking in Nigerian Breweries (1.1 per cent) and Dangote Sugar (0.4 per cent).

Beta Glass Plc recorded the highest gain, an up by N12.95 or 23.13 per cent to close N68.95 from N56 per share. Courteville Business Solutions Plc followed with a gain of 13.64 per cent or N0.03, from N0.22 to close at N0.25 per share, while NEM Insurance Plc advanced from N2.21 to N2.50, an increase of N0.29 or 13.12 per cent.

Other top gainers included Regency Assurance Plc that appreciated from N0.23 to N0.25, an up of 8.70 per cent or N0.02, and Sovereign Trust Insurance Plc gained N0.02 or 8.70 per cent from N0.23 to N0.25.

On the negative side, Goldlink Insurance Plc led with a drop of 36.11 per cent or N0.13 to close at 23 kobo. Japaul Oil & Maritime Services Plc followed with a loss of 33.33 per cent or N0.13 to close at 26 kobo from 39 kobo while Neimeth International Pharmaceuticals Plc lost N0.17 or 25.37 per cent from N0.67 to N0.50.

The share price of Caverton Offshore Support Grp Plc declined from N3 to N2.46, losing N0.54 or 18 per cent as Ikeja Hotel Plc also dropped by N0.30 or 17.14 per cent from N1.75 to N1.45.

According to NSE weekly report, “The Financial Services Industry (measured by volume) led the activity chart with 919.604 million shares valued at N7.544 billion traded in 11,975 deals; thus contributing 62.28 per cent and 69.36 per cent to the total equity turnover volume and value respectively.

“The ICT Industry followed with 204.019 million shares worth N58.786 million in 570 deals. The third place was Oil and Gas Industry with a turnover of 154.554 million shares worth N251.781 million in 1,735 deals.

“Trading in the Top Three Equities namely, Access Bank Nigeria Plc, Courtville Business Solutions Plc and United Bank for Africa Plc (measured by volume) accounted for 503.716 million shares worth N2.338 billion in 2,754 deals, contributing 34.11per cent and 21.50 per cent to the total equity turnover volume and value respectively.”

Meanwhile, Analyst at APT Securities and Fund Limited said that, “Thus, we advice investors to tread with caution and take advantage of stocks that have shed enormous weight.

“We expect the bearish tempo to moderate on long position taking by value investors to dilute exposures on fundamentally strong equities given their low prices and on expectations of positive rally.”

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