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Stock Market Maintains Positive Momentum, Closes Firmer

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NSE

The stock market maintained a positive momentum to close firmer last week despite apprehensions that the retention of the high monetary indicators by the Central Bank of Nigeria (CBN) may impact negatively on the market. The NSE ASI appreciated by 1.39 per cent to 28,247.07, thereby closing in the green for the second consecutive week.  The market capitalisation closed higher at N9.703 trillion.

Similarly, all other Indices finished higher during the week, with the exception of the NSE-Main Board Index, NSE Banking Index and the NSE Consumer Goods Index that depreciated by 0.14 per cent, 0.73 per cent and 0.53 per cent respectively, while the NSE ASeM and NSE Insurance Indices closed flat.

Analysts at Afrinvest said: “Whilst a tight monetary policy environment prevails (post-MPC decision), we perceive frail sentiment towards equities may persist as investors continue to take advantage of higher yields in the fixed income market. Nonetheless, we expect the broader index to close the week within the positive territory.”

The NSE  Oil & Gas Index advanced the most (+6.4 per cent) on account of strong buy sentiment in Conoil Plc (+33.5 per cent), and Total Nigeria Plc (+18.0 per cent) while the  NSE Industrial Goods Index gained 1.6 per cent on the back of gains Dangote Cement PlcM (+3.4 per cent).

Conversely,  the NSE  Banking Index lost the most, declining by  0.7 per cent on account of price depreciation in Guaranty Trust  Bank Plc(-7.2 per cent) and ETI (-1.2 per cent).  The NSE  Consumer Goods Index fell 0.5 per cent on weaker sentiments in Nigerian Breweries Plc (-1.0 per cent) and Unilever Nigeria (-1.0 per cent) which appreciated in the previous week.

Daily Performance summary

The market had opened on Monday on a negative note as the Nigerian Stock Exchange All Share Index (NSE ASI) declined by 0.07 per cent to close at 27,839.93 points. The negative performance was on the back of losses recorded by depreciation recorded in the share prices of PZ Cussons, Nigerian Breweries, Forte Oil, Nascon Allied Industries Plc and Nestle Nigeria Plc and Nigerian Breweries Plc. Similarly, the market capitalisation depreciated by 0.07 per cent to close at N9.56 trillion. In terms of volume of trading a total of total volume of stocks traded was 328.20 million valued at N2.89 billion in 3,215 deals.   The most actively traded sectors were: Financial Services (302.77 million), Consumer Goods (8.30 million shares) and, Conglomerates (6.46 million shares), while the three most actively traded stocks were: Access Bank (84.09 million), FBN Holdings Plc (54.14 million shares) and United Bank for Africa (38.85 million).

All sector indices closed in green save for the  NSE Consumer Goods index which fell 1.0 per cent on account of sell pressure in PZ (-4.9 per cent), Nigerian Breweries (-1.1 per cent) and Nestle Nigeria(-0.1 per cent). The  NSE Banking index advanced the most, up  0.3 per cent on the back of improved buy interest in GTBank Plc (+0.2 per cent) and Zenith Bank (+0.2 per cent). The NSE  Industrial Goods and  NSE Oil & Gas indices rose 0.2  per cent apiece, driven by gains in Lafarge Africa Plc (+0.5 per cent), Conoil Plc (+10.2 per cent) and Total Nigeria (+5.0 per cent).  In the same vein, the Insurance index appreciated 0.2 per cent.

The market rebounded on Tuesday, shaking off the bearish start to the week as the NSE ASI jumped by 1.3 per cent to close at 28,209.93. Market capitalisation shed N127.1 billion to be at N9.69 trillion. The market was lifted by gains in Dangote Cement Plc (+3.9 per cent), Zenith Bank  (+0.5 per cent) and Access  Bank Plc (+0.4 per cent).

Just like the previous day’s performance, all indices closed in green save for the Consumer Goods index which fell 0.7 per cent on account of losses in Unilever Nigeria Plc (-1.1 %) and Nigerian Breweries  (-0.1 per cent). The NSE Industrial Goods led the gainers with 2.0 per cent driven by gains in Dangote Cement (3.9 per cent). Likewise, sustained buying interest in Conoil Plc (+10.2 per cent) and uptrend in Total Nigeria Plc (+2.5 per cent) drove the NSE Oil & Gas indices 1.3 per cent.

The uptrend continued at the equities market  though marginally. The NSE ASI went up 0.02 per cent to close at 28,214.57. Gains in FBN Holdings, UBA, Zenith Bank, Oando and Stanbic IBTC contributed to the positive close. Investors traded 3.09 billion in 2,815 deals worth N6.24 billion in 2,815 deals.  The three most actively traded stocks were: GNI (2.87 billion shares), Zenith Bank (51.22 million shares) and UBA (23.56 million shares).

Profit taking in some highly capitalised stocks halted the two-day rally with the NSE ASI falling by 0.17 per cent to close at 28,166.42.   The stocks included FBN Holdings, UBA, GTBank, Dangote Cement Plc and Guinness  Nigeria Plc.   Although the general market mood remained negative, 1.6 per cent price decline recorded by Dangote Cement Plc the market southwards. Ex-Dangote Cement Plc, the market would have closed 0.6 per cent higher.

Performance across sectors was mixed as the NSE Banking and NSE Industrial Goods Index shed 0.2 per cent and 0.9 per cent. On the positive side, the NSE Oil & Gas Index advanced the most, rising to 3.4 per cent on the back of appreciation in Oando Plc (+7.1 per cent) and Mobil Oil Plc (+5.0 per cent) while the NSE Consumer Goods Index followed, increasing  by 0.6 per cent as a  result of gains in PZ Cussons  (+4.9 per cent) and Nigerian Breweries Plc (+1.0 per cent).

On the last day of the week, the equity market rebounded today to close the week positively. Specifically, the NSE ASI appreciated by 0.29 per cent to close at 28,247.07  on gains  recorded by  FBN Holdings, Flour Mills, PZ Cussons, Dangote Cement and Guinness  Nigeria.

The total value of stocks traded on the floors of the exchange on Friday was N1.56 billion, down by 56.91 per cent from N3.62bn recorded the previous day while  volume was 265.07 million shares exchanged in  3,136 deals.

Market turnover

In all, the market recorded a turnover of 4.331 billion shares worth N16.803 billion in 16,797 deals in contrast to a total of 611.527 million shares valued at N5.495 billion that exchanged hands the previous week in 9,650 deals.

The Financial Services Industry remained the most active, leading with 4.177 billion shares valued at N9.788 billion traded in 9,805 deals, thus contributing 96.45 per cent and 58.25 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 65.533 million shares worth N5.017 billion in 2,855 deals. The third place was occupied by the Conglomerates Industry with a turnover of 31.751 million shares worth N125.102 million in 594 deals.

Trading in the top three equities namely – Great Nigerian Insurance Plc, FCMB Group Plc and Diamond Bank Plc accounted for 3.299 billion shares worth N3.704 billion in 1,308 deals, contributing 76.18 per cent and 22.04 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 615 units of Exchange Traded Products (ETPs) valued at N6,070.20 executed in 21 deals, compared with a total of 945 units valued at N9,541.90 transacted two weeks in 18 deals.

A total of 3,394 units of Federal Government Bonds valued at N3.263 million were traded in 5 deals compared to a total of 1,700 units of Federal Government Bonds valued at N1.591 million transacted the previous week in six deals.

Gainers and losers

Meanwhile, 33 equities appreciated in price during the week, lower than 34 equities in the previous week, while 25 equities depreciated in price, lower than 26 equities in the preceding week. A total of 122 equities remained unchanged higher than 120 equities recorded in the preceding week.

Conoil Plc led the price gainers for the week with 33.4 per cent, followed by Cutix Plc with 19.4 per cent, just as Total Nigeria Plc and Oando Plc appreciated by 18 per cent and 15.2 per cent respectively. Cadbury Nigeria Plc and Stanbic IBTC Holdings Plc went up by 14.1 per cent and 9.3 per cent in that order.

Other top price gainers include: MRS Oil Nigeria Plc (8.8 per cent); Eterna Plc (8.2 per cent); Zenith Bank Plc (7.5 per cent) and PZ Cussons Nigeria Plc (6.4 per cent).

Conversely, Caverton led the price losers, shedding 13.2 per cent, trailed by Neimeth International Pharmaceuticals Plc with 12.9 per cent, while Beta Glass Company Nigeria Plc (9.7 per cent). Guaranty Trust Bank Plc shed 7.2 per cent, just as Guinness Nigeria Plc and E-Tranzact International Plc fell by 7.0 per cent and 5.0 per cent respectively.

Other top price losers included: African Prudential Registrars Plc (4.9 per cent); Northern Nigeria Flour Mills (4.9 per cent), Airline Services & Logistics Plc (4.7 per cent) and Avon Crowncaps 7 Containers Plc (4.3 per cent).

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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