NAHCO, Guinness, Dangote Flour Lead N98bn Market Loss

• NAHCO, Guinness, Dangote Flour Lead N98bn Market Loss

The Nigerian Aviation Handling Company Plc, Guinness Nigeria Plc and Dangote Flour Plc emerged as the top three losers at the close of trading on the floor of the Nigerian stock Exchange on Thursday as the market capitalisation slid by N98bn.

A total of 137.694 million shares valued at N898.708m exchanged hands in 2,488 deals.

The NSE market capitalisation dropped to N9.018tn from N9.116tn, while the All-Share Index closed at 26,212.09 basis points from 26,495.04 basis points.

NAHCO shares dropped by N0.30 (9.49 per cent) to close at N2.86 from N3.16, while the share price of Guinness depreciated to N78.90 from N83.05, losing N4.15 (five per cent).

Similarly, Dangote Flour share price closed at N4.04 from N4.25, losing N0.21 (4.94 per cent).

The NSE continued to seek its first positive close of the year as sizeable declines in select market heavyweights pulled the NSE ASI down by 1.07 per cent.

On the global scene, major bourses across Europe traded mixed amid the release of impressive full year earnings from the United Kingdom’s house building sector and JP Morgan’s decision to revise lower its valuation on a few European insurers.

Also, the United States opened mixed as investors assessed a series of economic data and the Federal Reserve’s thoughts on President-elect Donald Trump’s policies.

At the NSE, the industrial goods sector came as the biggest loser in Thursday’s session largely on the back of a 4.01 per cent decline in Dangote Cement Plc.

The consumer goods and the oil/gas sectors also closed lower amid losses in blue-chip Guinness and Forte Oil Plc by five per cent and 3.41 per cent, respectively.

The financial services sector, however, recorded its first green close of the year, buoyed by advances across a number of tier-1 banks such as Access bank Plc, FBN Holdings Plc, Guaranty Trust Bank Plc, United Bank for Africa Plc and Ecobank Transnational Incorporated Plc by 4.96 per cent, 3.30 per cent, 2.49 per cent, 2.22 per cent and 1.99 per cent, respectively.

Market breadth turned positive with 17 advances and 16 declines.

“We highlight that today’s market closing position was largely distorted by the loss in market heavyweight – Danote Cement. Excluding the loss in the stock, the ASI would have closed in the green. Consequently, considering the improved market sentiment (as indicated by the positive market breadth), we foresee a positive close in Friday’s trading session,” analysts at Vetiva Capital Management Limited said in a draft.

Meanwhile, there was an oversubscription of Treasury bills instruments sold as the naira depreciated at the parallel market.

The results of the Primary Market Auction, which was held on Wednesday, showed oversubscription across all instruments. Treasury bills worth N172.85bn were sold in 91-day (N35bn), 182-day (N22bn) and 364-day (N115.85bn), with respective bid-to-cover ratios of 1.02, 1.05 and 1.17 and stop rates of 14 per cent, 17.5 per cent and 18.68 per cent, accordingly.

Money market rates (open-buy-back and overnight rates) increased marginally by 0.50 per cent and one per cent to close at 8.50 per cent and 9.42 per cent, respectively. As a result, the average money market rate advanced by 0.75 per cent to close at 8.96 per cent at the end of the trading day .

Mixed reaction, according to Meristem Securities Limited was witnessed in the Treasury bond space. However, significant demand was observed at the shorter end of the curve.

The April 2017, July 2017, August 2017 and May 2018 instruments all recorded declines of 0.52 per cent, 0.03 per cent, 0.10 per cent and 0.19 per cent, respectively. Consequently, the average bond yield advanced by 0.02 per cent, closing at 16.69 per cent at the end of Thursday’s trades.