• Equities Market Rebounds after Three Weeks of Decline

The Nigerian equities market closed last week on a positive note as stocks rebounded after three weeks of decline. Following weeks of rally, the market succumbed to the bears due to profit taking. As a result, the market remained under the control of the bears for three consecutive weeks. However, the bulls resurfaced last week following bargain hunting in some bellwether stocks.

Besides, impressive full year results by leading brewer, Guinness Nigeria Plc and Stanbic IBTC Holdings Plc bolstered investors’ confidence to increase their demand for stocks. Consequently, the Nigerian Stock Exchange (NSE) All-Share Index and market capitalisation appreciated by 1.27 per cent to close the week at 35,957.24 and N12.393 trillion respectively.

Similarly, all other indices finished higher during the week with the exception of the NSE Main Board, NSE Banking, NSE Insurance, NSE Oil/Gas and NSE Industrial Goods Indices that depreciated by 0.24 per cent, 1.08 per cent, 0.10 per cent, 3.77 per cent and 1.01 per cent respectively while the NSE ASeM Index closed flat.

Daily Market Performance

When trading resumed on Tuesday, sentiments remained negative, pushing the down by 0.28 per cent. The depreciation recorded in the share prices of Lafarge Africa, Total, Unilever, GTBank, and UBA was mainly responsible for the lower close. Investors traded 230.03 million shares worth N4.77 billion in 4,188 deals. The three most actively traded sectors were: Financial Services (189.55 million shares), Consumer Goods (24.09 million shares), and Conglomerates (4.74 million shares), while the three most actively traded stocks were: Access Bank (63.29 million shares) UBA (27.61 million shares) and Zenith Bank (17.84 million shares).

In terms of sectoral performance, the NSE Oil & Gas Index recorded the highest decline of 2.99 per cent, followed by the NSE Industrial Goods Index that fell by 2.11 per cent.The NSE Consumer Index shed 0.30 per cent, while the NSE Banking Index went down by 0.06 per cent. On the positive side, the NSE Insurance Index appreciated by 0.13 per cent. Analysts at Afrinvest were, however, bullish that the market would rebound the next day.

“We believe the five days of consecutive negative returns leave some legroom for positioning, as such, we expect the market to close positive in tomorrow’s trading session,” they said.

As expected, the market halted its losing streak on Wednesday with the index rising by 0.58 per cent to close at 35,609.07, pushing the year-to-date to 32.5 per cent. The rebound was propelled by gains in Dangote Cement, Zenith Bank, Nigerian Breweries Plc and Guinness Nigeria.

Similarly, activity level improved as volume and value traded rose 22.5 per cent and 13.6 per cent to 281.8 million shares respectively. A further breakdown of the performance the NSE Oil & Gas Index led sector gainers, up 1.3 per cent as a result of bargain hunting in Seplat that went up by 3.4 per cent.

In the same vein, buy interest in Nigerian Breweries and Guinness Nigeria boosted the NSE Consumer Index 0.8 per cent. Similarly, growth in Zenith Bank and Stanbic IBTC lifted the NSE Banking Index by 0.1 per cent.

On the flip side, despite an uptick in Dangote Cement the NSE Industrial Goods Index closed 0.5 per cent lower. Also, the NSE Insurance Index fell 0.4 per cent.

The stock market sustained its positive performance on Thursday as the index rose by 1.4 per cent to close at 36,112.37, while market capitalisation added N174.8 billion to closed higher at N12.4 trillion.

Guinness Nigeria Plc led the price gainers with 10.2 per cent, trailed by Dangote Cement Plc, which rose by 4.7 per cent.

Investors have increased demand for shares of Guinness following its impressive results for the full year ended June 30, 2017.

Details of the audited showed a revenue of N125.919 billion in 2017, up from N101.973 billion in 2016. Net finance cost increased from N6.763 billion to N7.524 billion, making the brewing to end the year with an operating profit of N10.186 billion, up from N4.415 billion in 2016.

Profit after tax stood at N1.923 billion, hence the directors have recommended a dividend of N963.7 million. The company recommended a dividend of N963.7million for the year ended June 30, 2017, showing an increase of 28 per cent compared with N752.9 million in 2016.

Stanbic IBTC Holdings Plc, which also released an improved results for the half year to June 30, 2017, closed as the third highest price gainer. It chalked up 3.8 per cent. AIICO Insurance Plc, African Prudential Plc, and Dangote Sugar Refinery Plc garnered 3.6 per cent, 3.5 per cent and 3.4 per cent respectively.

Conversely, Seplat Petroleum Development Company Plc led the price losers with 5.0 per cent, trailed by NCR Nigeria Plc with 4.9 per cent. May & Baker Nigeria Plc and Skye Bank Plc shed 4.7 per cent apiece.

However, the bears returned on Friday, leading a decline of 0.44 per cent. But the decline was not enough to offset earlier gains. Hence, the market closed with a weekly gain of 1.27 per cent.

Market Turnover

Meanwhile, market turnover was 887.024 million shares worth N17.450 billion in 16,955 deals, as against 998.973 million shares valued at N11.455 billion that exchanged hands in 13,626 deals the previous week.

The Financial Services Industry maintained its number one spot on the activity chart, accounting for 729.177 million shares valued at N8.816 billion traded in 10,744 deals, thus contributing 82.20 per cent and 50.52 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry trailed with 68.153 million shares worth N6.692 billion in 2,908 deals. The third place was occupied by Conglomerates Industry with a turnover of 32.109 million shares worth N183.098 million in 687 deals.

Trading in the top three equities- Access Bank Plc, Guaranty Trust Bank Plc, Zenith Bank Plc accounted for 320.549 million shares worth N6.909 billion in 2,643 deals.

Also traded during the week were a total of 3,000 units of Exchange Traded Products (ETPs) valued at N31,590.00 executed in one deal compared with a total of 86,063 units valued at N838,754.79 transacted two weeks ago in eight deals.

A total of 8,535 units of Federal Government Bonds valued at N8.660 million were traded last week in 11 deals, compared with a total of 12,244 units valued at N12.374 million transacted the previous week in 11 deals.

Price Gainers and Losers

The price movement chart displayed 28 price gainers higher than the 19 of the previous week, while 38 equities depreciated in price, lower than 48 equities of the previous week. Guinness Nigeria Plc led the price gainers with 27.5 per cent, trailed by Caverton Offshore Support Group Plc with 6.2 per cent. C & I Leasing Plc garnered 6.0 per cent, just as African Prudential Plc and AIICO Insurance Plc chalked up 5.7 per cent and 5.3 per cent respectively. Newrest ASL Nigeria Plc and Dangote Cement Plc appreciated by 4.9 per cent and 4.8 per cent in that order. Other top price gainers included: Redstar Express Plc (4.7 per cent); Conoil Plc (4.6 per cent) and Berger Paints Plc (4.2 per cent).

Conversely, Jaiz Bank Plc and Sterling Bank Plc led the price losers with 7.7 per cent apiece. Lafarge Africa Plc shed 7.3 per cent, while Seplat Petroleum Development Plc and Fidson Healthcare Plc went down by 6.6 per cent and 5.6 per cent respectively.

Other top price losers were: Beta Glass Plc(5.0 per cent), Julius Berger Nigeria Plc, Presco Plc, PZ Cussons Nigeria Plc and Cadbury Nigeria Plc (4.9 per cent apiece).