Markets

Market Gains N798bn in Four Days on Continuing Demand

Published

7 years ago

June 5, 2017

Nigerian Exchange Limited - Investors King

Market Gains N798bn in Four Days on Continuing Demand

The Nigerian equities market maintained its bullish trend last week with the Nigerian Stock Exchange (NSE) All-share Index crossing the 30,000 mark to hit 31,371.63, while market capitalisation added N797.6 billion to close at N10.845 trillion.

Having hit a 10-month level with a growth of 3.38 per cent the previous week, the market sustained the positive performing rising by 7.94 per cent to close on continuing higher demand by investors last week.

Analysts at Cordros Capital attributed the positive development to improved macro-economic fundamentals, herein we refer to “the improvement in the currency space, especially at the parallel and Importers and exports FX market and data suggesting economic recovery is well underway, in particular, improved Purchasing Managers’ Index (PMI) survey result for the month of May.”

“ Asides that, the federal government continued to make strides in harnessing growth in the economy, supporting this, the acting President Prof. Yemi Osinbajo signed into law two Acts of Parliaments earlier passed by the National Assembly. The New laws focus on increasing access to affordable credit, and will be beneficial to MSMEs in particular,” Cordros Capital said.

At the end of the week, all the sectoral indicators appreciated save for the NSE Oil & Gas Index that went down by4.5 per cent. The NSE Industrial Goods recorded the highest growth of 9.17 per cent trailed by the NSE Consumer Goods Index that grew by 7.68 per cent. The NSE Insurance Index closed 6.08 per cent higher just as the NSE Banking Index appreciated by 4.0 per cent.

Daily Market performance

The market remained upbeat through the four trading days, beginning with a growth of 0.7 per cent on Tuesday to close at 29,276.59. Tuesday’s performance was buoyed by appreciations in banking stocks such as Guaranty Trust Bank Plc, FBN Holdings Plc, Zenith Bank Plc and Ecobank Transnational Incorporated (ETI). The positive performance was across all the sectors except the oil and gas sector that went down by 2.0 per cent. The NSE Banking Index appreciated the most, rising by 2.2 per cent on the back of gains by GTBank (+1.5 per cent) and Zenith Bank (+1.9 per cent). Similarly, gains by AXA Mansard Insurance Plc (+9.5 per cent) and Continental Reinsurance Plc (+0.8 per cent) bolstered the NSE Insurance Index to close up 2.0 per cent higher.

Similarly, the NSE Industrial Goods Index appreciated by 0.7 per cent as a result of uptick in Dangote Cement (+0.2 per cent) and Lafarge Africa (+1.2 per cent), just as the NSE Consumer Goods Index grew by 0.3 per cent.

The market extended its uptrend for the second day and sixth consecutive session with the index appreciating 0.76 per cent to close at 29,498.31,

High demand that pushed the shares of bellwethers such as Dangote Cement Plc, Nigerian Breweries Plc, FBN Holdings Plc and Access Bank Plc Nestle Nigeria Plc were responsible for the gains.

Similarly, the market capitalisation appreciated by 0.76 per cent to close at N10.20 trillion. The total value of stocks traded on that the day stood at N3.34 billion, down by 56.02 per cent from N7.59 billion recorded the previous day, while total volume of stocks traded was 343.19 million in 4,905 deals.

The most actively traded sectors were: Financial Services (274.63million), Consumer Goods (29.01million) and Conglomerates (12.57million), while three most actively traded stocks were: FBN Holdings (61.19million), Diamond Bank (41.86 million) and Fidelity Bank (38.77 million).

Performance across sectors was mixed as three of five indices appreciated. The NSE Insurance Index led sector gainers, appreciating with 2.5 per cent, just the NSE Industrial Index and NSE Consumer Goods Indices rose 1.9 per cent and 1.5 per cent in that order.

Conversely, the NSE Banking Index shed 3.1 per cent, while the NSE Oil & Gas Index closed 2.3 per cent lower.

The Nigerian bourse remained positive on Thursday with the index rising by 2.8 per cent to cross the 30,000 for the first time since last year June to close at 30,314.14

The stocks that were responsible to the growth were: Dangote Cement, Nigerian Breweries, FBN Holdings and Zenith Bank. A further analysis of the performance indicated that four of the five sectors closed positively, save for the NSE Oil & Gas Index shed 0.2 per cent. This followed profit taking in Oando and Seplat that shed 5.3 per cent and 2.4 per cent in that order.

The NSE Consumer Index appreciated by 2.5 per cent on the back of gains in Nigerian Breweries (4.9 per cent). Similarly, the Industrial Goods Index appreciated by 2.4 per cent on the account of price gains recorded by Dangote Cement Plc.

In a similar vein, the NSE Banking Index closed 1.7 per cent higher on the back of positive sentiments in Zenith Bank, UBA, Access Bank and ETI, just as the NSE Insurance Index added 1.5 per cent.

The market recorded an unprecedented growth on Friday as the bulls consolidated their hold on the market. Consequently, the index posted its highest daily growth in the recent times, apreciated by 3.49 per cent to close at 31,371.63.

Gains in FBN Holdings, Nigerian Breweries, Access Bank, Dangote Cement and Zenith Bank were mainly responsible for the gain recorded in the index on the last day of the week.

Market turnover

Meanwhile, trading at the stock market was for four days as the Federal Government of Nigeria declared Monday 29th May, 2017 as Public Holiday to mark the 2017 Democracy Day Celebration.

Investors traded a total of 2.319 billion shares worth N23.813 billion in 22,310 deals, up from 1.877 billion shares valued at N20.055 billion that exchanged hands the previous week in 19,979 deals.

The Financial Services Industry led the activity chart with 1.950 billion shares valued at N15.479 billion traded in 14,381 deals; thus contributing 84.12% and 65.00% to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 156.358 million shares worth N2.875 billion in 2,804 deals. The third place was occupied by Conglomerates Industry with a turnover of 70.452 million shares worth N168.377 million in 739 deals.

Also traded during the week were a total of 52 units of Exchange Traded Products (ETPs) valued at N13,802.70 executed in six deals compared with a total of 65 units valued at N1,967.85 transacted the previous week in seven deals. A total of 3,786 units of Federal Government Bonds valued at N3.806 million were traded in four deals, compared with a total of 50 units valued at N43,719.69 transacted last week in one deals two weeks ago.

Price Gainers and Losers

The price movement chart showed that 61 equities appreciated higher than 44 equities of the previous week, while only 12 equities depreciated, lower than the 25 equities of the previous week. FBN Holdings Plc led the price gainers for the week, rising by 31.2 per cent. UAN Property Development Company Plc trailed with 25.2 per cent, while AXA Mansard Insurance Plc chalked up 24.7 per cent.

May & Baker Nigeria Plc garnered 22.6 per cent, just as Champion Breweries Plc and Diamond Bank Plc rose by 19.9 per cent and 19.3 per cent in that order. Other top price gainers are: Honeywell Flour Mills Plc (18.8 per cent); Fidelity Bank Plc (17.8 per cent); Access Bank Plc (17.6 per cent) and Dangote Cement Plc (15.6 per cent).

Conversely, Seven-Up Bottling Company Plc led the price losers with 14.2 per cent, followed by Linkage Assurance Plc with a decline of 12.7 per cent. Oando Plc went down by 10.3 per cent just as Seplat, Nigerian Enamelware Plc and University Press Plc shed 10.2 per cent, 4.9 per cent, and 4.9 per cent respectively. Other top price losers included: Jaiz Bank Plc (4.2 per cent) Caverton(4. 1 per cent); GTBank Plc (3.6 per cent) and Medview Airline Plc respectively.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Energy

Egypt Increases Fuel Prices by 15% Amid IMF Deal

Published

2 days ago

July 25, 2024

Samed Olukoya

Egypt has raised fuel prices by up to 15% as the country looks to cut state subsidies as part of a new agreement with the International Monetary Fund (IMF).

The oil ministry announced increases across a variety of fuel products, including gasoline, diesel, and kerosene.

However, fuel oil used for electricity and food-related industries will remain unaffected to protect essential services.

This decision comes after a pricing committee’s quarterly review, reflecting Egypt’s commitment to align with its financial obligations under the IMF pact.

Egypt is in the midst of recalibrating its economy following a massive $57 billion bailout, orchestrated with the IMF and the United Arab Emirates.

The IMF, which has expanded its support to $8 billion, emphasizes the need for Egypt to replace untargeted fuel subsidies with more focused social spending.

This is seen as a crucial component of a sustainable fiscal strategy aimed at stabilizing the nation’s finances.

Effective immediately, the cost of diesel will increase to 11.5 Egyptian pounds per liter from 10.

Gasoline prices have also risen, with 95, 92, and 80-octane types now costing 15, 13.75, and 12.25 pounds per liter, respectively.

Despite the hikes, Egypt’s fuel prices remain among the lowest globally, trailing only behind nations like Iran and Libya.

The latest increase follows recent adjustments to the price of subsidized bread, another key staple for Egyptians, underscoring the government’s resolve to navigate its economic crisis through tough reforms.

While the rise in fuel costs is expected to impact millions, analysts suggest the inflationary effects might be moderate.

EFG Hermes noted that the gradual removal of subsidies and a potential hike in power tariffs could have a relatively limited impact on overall consumer prices.

They predict that the deceleration in inflation will persist throughout the year.

Egypt’s efforts to manage inflation have shown progress, with headline inflation slowing for the fourth consecutive month in June.

This trend offers a glimmer of hope for the government as it strives to balance economic stability with social welfare.

The IMF and Egyptian officials are scheduled to meet on July 29 for a third review of the loan program. Approval from the IMF board could unlock an additional $820 million tranche, further supporting Egypt’s economic restructuring.

Crude Oil

Oil Prices Rise on U.S. Inventory Draws Despite Global Demand Worries

Published

2 days ago

July 24, 2024

Samed Olukoya

Oil prices gained on Wednesday following the reduction in U.S. crude and fuel inventories.

However, the market remains cautious due to ongoing concerns about weak global demand.

Brent crude oil, against which Nigerian crude oil is priced, increased by 66 cents, or 0.81% to $81.67 a barrel. Similarly, U.S. West Texas Intermediate crude climbed 78 cents, or 1.01%, to $77.74 per barrel.

The U.S. Energy Information Administration (EIA) reported a substantial decline in crude inventories by 3.7 million barrels last week, surpassing analysts’ expectations of a 1.6-million-barrel draw.

Gasoline stocks also fell by 5.6 million barrels, while distillate stockpiles decreased by 2.8 million barrels, contradicting predictions of a 250,000-barrel increase.

Phil Flynn, an analyst at Price Futures Group, described the EIA report as “very bullish,” indicating a potential for future crude draws as demand appears to outpace supply.

Despite these positive inventory trends, the market is still wary of global demand weaknesses. Concerns stem from a lackluster summer driving season in the U.S., which is expected to result in lower second-quarter earnings for refiners.

Also, economic challenges in China, the world’s largest crude importer, and declining oil deliveries to India, the third-largest importer, contribute to the apprehension about global demand.

Wildfires in Canada have further complicated the supply landscape, forcing some producers to cut back on production.

Imperial Oil, for instance, has reduced non-essential staff at its Kearl oil sands site as a precautionary measure.

While prices snapped a three-session losing streak due to the inventory draws and supply risks, the market remains under pressure.

Factors such as ceasefire talks between Israel and Hamas, and China’s economic slowdown, continue to weigh heavily on traders’ minds.

In recent sessions, WTI had fallen 7%, with Brent down nearly 5%, reflecting the volatility and uncertainty gripping the market.

As the industry navigates these complex dynamics, analysts and investors alike are closely monitoring developments that could further impact oil prices.

Commodities

Economic Strain Halts Nigeria’s Cocoa Industry: From 15 Factories to 5

Published

2 days ago

July 24, 2024

Samed Olukoya

Once a bustling sector, Nigeria’s cocoa processing industry has hit a distressing low with operational factories dwindling from 15 to just five.

The cocoa industry, once a vibrant part of Nigeria’s economy, is now struggling to maintain even a fraction of its previous capacity.

The five remaining factories, operating at a combined utilization of merely 20,000 metric tons annually, now run at only 8% of their installed capacity.

This stark reduction from a robust 250,000 metric tons reflects the sector’s profound troubles.

Felix Oladunjoye, chairman of the Cocoa Processors Association of Nigeria (COPAN), voiced his concerns in a recent briefing, calling for an emergency declaration in the sector.

“The challenges are monumental. We need at least five times the working capital we had last year just to secure essential inputs,” Oladunjoye said.

Rising costs, especially in energy, alongside a cumbersome regulatory environment, have compounded the sector’s woes.

Farmers, who previously sold their cocoa beans to processors, now prefer to sell to merchants who offer higher prices.

This shift has further strained the remaining processors, who struggle to compete and maintain operations under the harsh economic conditions.

Also, multiple layers of taxation and high energy costs have rendered processing increasingly unviable.

Adding to the industry’s plight are new export regulations proposed by the National Agency for Food and Drug Administration and Control (NAFDAC).

Oladunjoye criticized these regulations as duplicative and detrimental, predicting they would lead to higher costs and penalties for exporters.

“These regulations will only worsen our situation, leading to more shutdowns and job losses,” he warned.

The cocoa processing sector is not only suffering from internal economic challenges but also from a tough external environment.

Nigerian processors are finding it difficult to compete with their counterparts in Ghana and Ivory Coast, who benefit from lower production costs and more favorable export conditions.

Despite Nigeria’s potential as a top cocoa producer, with a global ranking of the fourth-largest supplier in the 2021/2022 season, the industry is struggling to capitalize on its opportunities.

The decline in processing capacity and the industry’s current state of distress highlight the urgent need for policy interventions and financial support.

The government’s export drive initiatives, aimed at boosting the sector, seem to be falling short. With the industry facing over N500 billion in tied-up investments and debts, the call for a focused rescue plan has never been more urgent.

The cocoa sector remains a significant part of Nigeria’s economy, but without substantial support and reforms, it risks falling further into disrepair.