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Stock Market Gains N156bn on Renewed Investor Sentiment



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  • Stock Market Gains N156bn on Renewed Investor Sentiment

It was another bullish week for equities investors as the market rode on the continued positive sentiments to gain N156.2 billion. The market, which had previously recorded its highest weekly gain, rallied further last week on persistent investors’ positive reactions to first quarter (Q1) earnings reported by companies. The Nigerian Stock Exchange (NSE) All-Share Index (NSE ASI) rose by 1.85 per cent to close at 26,235.63, while market capitalisation appreciated by same margin to close higher at N9.069 trillion.

Similarly, all other Indices finished higher during the week with the exception the NSE Insurance and NSE Industrial Goods Indices that depreciated by 0.09 per cent and 1.04 per cent respectively while the NSE ASeM Index closed flat.

The NSE Banking Index appreciated by 3.6 per cent, followed by the NSE Consumer Goods and NSE Oil & Gas Indices with 3.0 per cent apiece.

However, on the contrary, the Industrial Goods Index declined 1.1 per cent, just as the NSE Insurance Index recorded 0.1 per cent.

Analysts at Afrinvest said the market performance was driven by “swirls of positive sentiment, which emanated from the impressive Q1 earnings and expectations of a rebound in economic activities following positive PMI readings for April and improved FX liquidity.”

Daily Market performance

The market commenced the week and new month on a positive note on Tuesday as the NSE ASI appreciated by 0.80 per cent to close at 25,965.18. The gain recorded could be attributed to the renewed investor sentiments witnessed in the market from last week, coupled with some impressive Q1:2017 earnings releases which drove the positive reactions. Specifically, sustained interest in market bellwethers such as Zenith Bank, Nestle Nigeria, Guaranty Trust Bank and Seplat contributed to the positive performance.

Performance across sectors was broadly positive as all indices closed in the green save for the NSE Industrial Goods Index which stagnated. The NSE Banking Index appreciated the most, rising by 1.5 per cent due to gain by Zenith Bank (+3.7 per cent) and GTBank (+1.4 per cent) while the NSE Oil & Gas Index went up 1.4 per cent followed gains by Seplat (+3.7 per cent) and Oando (+4.8 per cent). Similarly, the NSE Consumer Goods Index and NSE Insurance indices closed 0.9 per cent and 0.02 per cent higher on the back of rally in Nestle (+2.5%) and WAPIC Insurance (+4.0 per cent) in that order.

At the end of trading, 22 stocks added value compared with 12 decliners. The gainers’ chart was led by Fdison (+9.1 per cent), NPF Microfinance Bank (+9.1 per cent) and FBN Holdings Plc (+5.4%).

Conversely, UACN of Nigeria Plc, Forte Oil Plc and AIICO Insurance shed 5.0 per cent, 4.2 per cent and 3.8 per cent respectively.

The market appreciated further as the bulls consolidated their hold on the market. The NSE ASI appreciated by 0.58 per cent to close at 26,116.79. The appreciation recorded in the share prices of Zenith Bank, Nigerian Breweries, Access Bank, FBN Holdings and UBA were mainly responsible for the gain recorded in the Index.

Market performance was broadly bullish as all sector indices closed in the green. The NSE Banking Index advanced the most, chalking up 1.5 per cent on the back of price appreciation in UBA (+6.3 per cent) and Zenith Bank (+1.6 per cent).

The NSE Oil & Gas Index added 0.6 per cent on account of gains in Oando (+7.9 per cent) and Forte Oil(+2.3 per cent). Likewise, the NSE Consumer Goods Index and Insurance indices trended northwards by adding 0.4 per cent and 0.3 per cent respectively. The NSE Industrial Goods Index closed unchanged.

The stock market recorded gains for the fifth consecutive trading session on Thursday as investors continued to take position in large cap stocks on the exchange. Consequently, the NSE ASI closed 0.20 per cent higher to settle at 26,166.80, reducing the year-to-date decline to 2.6 per cent. Also, the market capitalisation added N18 billion to close at N9.Investors gained N18.0bn as market capitalisation rose to N9.0 5 trillion. The positive close was majorly driven by gains in Nigerian Breweries Plc, Zenith Bank and International Breweries Plc.

A total of 26 stocks advanced while 15 declined. International Breweries Plc led the price gainers with 9.3 per cent trailed by Fidson Healthcare with 9.1 per cent, while NAHCO appreciated by 4.8 per cent.

Conversely, Stanbic IBTC Bank Plc led the price losers with 9.6 per cent, while Unity Bank Plc shed 7.4 per cent. AXA Mansard Insurance Plc went down by 4.5 per cent.

“Considering the positive momentum witnessed since the start of the week, we expect the market to close the week positive; however, we do not rule out the possibility of some “end of the week” profit-taking by investors in the trading session ahead,” analysts at Afrinvest (W.A) said.

The recorded its fourth consecutive gain on Friday adding 0.19 per cent to bring the total growth for the week to 1.85 per cent.

Market turnover

Meanwhile, investors traded 1.154 billion shares worth N10.439 billion in 16,676 deals , compared with 1.333 billion shares valued at N9.671 billion that exchanged hands the previous week in 16,300 deals.

The Financial Services Industry maintained its lead on the activity chart with 813.016 million shares valued at N6.904 billion traded in 10,298 deals; thus contributing 70.45 per cent and 66.13 per cent to the total equity turnover volume and value respectively. The Oil and Gas Industry followed with 106.566 million shares worth N1.063 billion in 1,356 deals. The Services Industry occupied the third position with a turnover of 90.940 million shares worth N188.204 million in 660 deals.

Also traded during the week were a total of 20 units of Exchange Traded Products (ETPs) valued at N110,000.00 executed in one deal compared with a total of 533 units valued at N32,204.30 transacted in the preceding week in 15 deals.

Similarly, a total of 1,582 units of Federal Government Bonds valued at N1.608 million were traded this week in 10 deals, compared with a total of 4,705 units valued at N3.934 million transacted two weeks ago in four deals.

Price Gainers and Losers

The price movement chart showed 43 advancers higher than the 38 equities of the previous week, while 16 equities depreciated in price, lower than 25 equities of the previous week.

Fidson Healthcare Plc led the price gainers’ chart with 43.6 per cent. Oando Plc trailed with 24 per cent, while Livestock Feeds Plc appreciated by 16.2 per cent.

Nigerian Aviation Handling Company Plc, chalked up 15.2 per cent, just as Newrest ASL Nigeria Plc and FBN Holdings Plc garnered 14.2 apiece. Other top price gainers were: May & Baker Nigeria Plc (14.1 per cent); Transcorp Plc (11.3 per cent); International Breweries Plc (10.4 per cent) and Cutix Plc (9.5 per cent).

Conversely, Unity Bank Plc led the price losers with 13.7 per cent, trailed by Champion Breweries Plc with 8.9 per cent decline. Stanbic IBTC Holdings Plc went down by 6.6 per cent, just as NASCON Allied Industries Plc and AXA Mansard Insurance Plc shed 5.7 per cent each.

Medview Airline Plc and Jaiz Bank Plc declined by 4.6 per cent and 4.3 per cent respectively. Others were: Honeywell Flour Mills Plc (4.2 per cent); Sterling Bank Plc (4.1 per cent); and Total Nigeria Plc (3.04).

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


Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd




The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins



Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020




Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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