Investors to Take Position as Firms Release Q1 Results

• Investors to Take Position as Firms Release Q1 Results

capital market analysts expect investors to take position this week as more quoted companies release their financial results for the first quarter of the year.

Firms including Forte Oil Plc, Unilever Nigeria Plc, Nigerian Breweries Plc and Africa Prudential Registrars Plc have released their Q1 2017 results.

Last week, the equities segment of the Nigerian Stock Exchange closed downbeat for the second consecutive week, dragging the year-to-date loss to 6.27 per cent after shedding 1.26 per cent week-on-week.

The NSE All-Share Index dropped by 1.26 per cent to close at 25,189.37 basis points, while the market capitalisation fell to N8.716tn from N8.827tn the previous week.

Similarly, all other indices finished lower during the week with the exception of the NSE ASeM, NSE Oil/Gas and the NSE Pension Indices that appreciated by 0.06 per cent, 0.60 per cent and 0.36 per cent, respectively.

A total of 896.748 million shares worth N5.918bn in 11,185 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 1.191 billion shares valued at N6.037bn that exchanged hands the previous week in 11,820 deals.

The financial services industry (measured by volume) led the activity chart with 688.971 million shares valued at N3.637bn traded in 6,374 deals, thus contributing 76.83 per cent and 61.46 per cent to the total equity turnover volume and value respectively.

The conglomerates industry followed with 105.516 million shares worth N207.182m in 944 deals, while the third place was occupied by consumer goods industry with a turnover of 45.172 million shares worth N1.139bn in 1,569 deals.

Trading in the top three equities namely, Diamond Bank Plc, Transnational Corporation of Nigeria Plc and Law Union and Rock Insurance Plc (measured by volume), accounted for 335.346 million shares worth N312.960m in 1,176 deals, contributing 37.42 per cent and 5.29 per cent to the total equity turnover volume and value respectively.

Analysts at Vetiva Capital Management Limited said the market dug deeper into negative territory at the close of trading last week, majorly dragged by sustained losses in Ecobank Transnational Incorporated and negative market reaction to Nigerian Breweries’ Q1 2017 earnings announcement.

They said, “Having seen a number of Q1 2017 earnings in last week, we expect to see some investors positioning in this week as the first quarter earnings season opens further.

“Overall, we foresee continued mixed trading on the bourse at week open,” they added.

Analysts at Meristem Securities Limited noted that profit-taking activities persisted last week, as a number of stocks shed most of their gains recorded in recent weeks.

They further said, “Also, the price decline witnessed by market heavyweight, Dangote Cement Plc, dragged general market performance for the week.

“This week, we expect activities in the equities market to be largely driven by Q1 2017 earnings releases.”

Investors in the nation’s stock market lost N105bn last Tuesday as the NSE market capitalisation plunged to N8.722tn from the N8.827tn. It closed at the previous week.

“In the interim, we expect market performance to be dictated by investors’ reaction to Q1:2017 earnings scorecards which are due this week. Barring any negative earnings surprises, we expect the broader index to close positive as investors hunt for bargains,” said analysts at Afrinvest Securities Limited.