Price appreciation in Dangote cement, Zenith bank, others lift equities market by N552bn

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By Kayode Tokede

The shares price appreciation in Dangote Cement Plc, Zenith Bank Plc, among others lifted by the equities market by N552billion in one week.

The market capitalization of all listed equities on the Nigerian Stock Exchange (NSE) opened the week at N20.978trillion to close at N21.53 trillion, an increase of N552billion or 2.63per cent.

Accordingly, the NSE All-Share Index rose by 2.6 per cent week-on-week (w/w) performance to close at 41,176.14 basis points from 40,120.22 basis points it opened for trading last week.

Consequently, the equities market Year-till-Date (YtD) return swung into positive territory, settling at 2.2per cent compared to -0.4per cent in the prior week.

Sentiments remained broadly positive in the second trading week of the year, as investors continued to cherry-pick stocks with attractive dividend yields ahead of 2020 financial year results dividend declarations. Interestingly, the local bourse recorded gains in all the trading sessions of the week.

Activity levels were decent, as trading volumes rose marginally by 1.5per cent w/w while value traded jumped by 64.7per cent w/w.

Notably, bargain hunting in Flour Mill of Nigeria plc added 22.9 per cent, and Dangote Sugar Plc gained 8.6 per cent.

In addition, the shares of Dangote cement rose by 5.3 per cent and shares of Zenith bank Plc added 2.5 per cent to drive the weekly equities market gain.

The performances across the sectors were broadly positive as all sectors closed positive. The Insurance (+17.5per cent) index topped the gainers chart followed by Oil and Gas (+7.3 per cent), Consumer Goods (+3.1 per cent), Industrial Goods (+2.8 per cent) and Banking (+2.5 per cent) indices.

The weekly market report of the NSE stated that, a total turnover of 3.447 billion shares worth N32.725 billion in 30,327 deals were traded last week by investors on the floor of the Exchange, in contrast to a total of 3.394 billion shares valued at N19.867 billion that exchanged hands  in prior’s week 26,808 deals.

The report stated that, “The Financial Services Industry (measured by volume) led the activity chart with 1.714 billion shares valued at N13.352 billion traded in 15,102 deals; thus contributing 49.74per cent and 40.80 per cent to the total equity turnover volume and value respectively.

“The Construction/Real Estate Industry followed with 768.131 million shares worth N4.203 billion in 430 deals. The third place was Conglomerates Industry, with a turnover of 279.799 million shares worth N578.694 million in 1,199 deals.

“Trading in the top three equities namely UPDC Real Estate Investment Trust, Mutual Benefits Assurance Plc and Transnational Corporation of Nigeria Plc (measured by volume) accounted for 1.224 billion shares worth N4.459 billion in 929 deals, contributing 35.52 per cent and 13.63 per cent to the total equity turnover volume and value respectively.”

The report stated that a total of 413,509 units valued at N2.454 billion were traded last week in 42 deals and a  total of 11,420 units of Bonds valued at N12.325 million were traded last week in 17 deals.

“In the short term, we expect the bulls to retain dominance in the market given positioning for FY 2020 dividends amid negative real returns in the fixed income market even as we do not rule out intermittent profit-taking.

“However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings,” analysts at Cordros Research explained.