Markets

Stock Market Maintains Positive Momentum, Closes Firmer

Published

8 years ago

September 26, 2016

The stock market maintained a positive momentum to close firmer last week despite apprehensions that the retention of the high monetary indicators by the Central Bank of Nigeria (CBN) may impact negatively on the market. The NSE ASI appreciated by 1.39 per cent to 28,247.07, thereby closing in the green for the second consecutive week. The market capitalisation closed higher at N9.703 trillion.

Similarly, all other Indices finished higher during the week, with the exception of the NSE-Main Board Index, NSE Banking Index and the NSE Consumer Goods Index that depreciated by 0.14 per cent, 0.73 per cent and 0.53 per cent respectively, while the NSE ASeM and NSE Insurance Indices closed flat.

Analysts at Afrinvest said: “Whilst a tight monetary policy environment prevails (post-MPC decision), we perceive frail sentiment towards equities may persist as investors continue to take advantage of higher yields in the fixed income market. Nonetheless, we expect the broader index to close the week within the positive territory.”

The NSE Oil & Gas Index advanced the most (+6.4 per cent) on account of strong buy sentiment in Conoil Plc (+33.5 per cent), and Total Nigeria Plc (+18.0 per cent) while the NSE Industrial Goods Index gained 1.6 per cent on the back of gains Dangote Cement PlcM (+3.4 per cent).

Conversely, the NSE Banking Index lost the most, declining by 0.7 per cent on account of price depreciation in Guaranty Trust Bank Plc(-7.2 per cent) and ETI (-1.2 per cent). The NSE Consumer Goods Index fell 0.5 per cent on weaker sentiments in Nigerian Breweries Plc (-1.0 per cent) and Unilever Nigeria (-1.0 per cent) which appreciated in the previous week.

Daily Performance summary

The market had opened on Monday on a negative note as the Nigerian Stock Exchange All Share Index (NSE ASI) declined by 0.07 per cent to close at 27,839.93 points. The negative performance was on the back of losses recorded by depreciation recorded in the share prices of PZ Cussons, Nigerian Breweries, Forte Oil, Nascon Allied Industries Plc and Nestle Nigeria Plc and Nigerian Breweries Plc. Similarly, the market capitalisation depreciated by 0.07 per cent to close at N9.56 trillion. In terms of volume of trading a total of total volume of stocks traded was 328.20 million valued at N2.89 billion in 3,215 deals. The most actively traded sectors were: Financial Services (302.77 million), Consumer Goods (8.30 million shares) and, Conglomerates (6.46 million shares), while the three most actively traded stocks were: Access Bank (84.09 million), FBN Holdings Plc (54.14 million shares) and United Bank for Africa (38.85 million).

All sector indices closed in green save for the NSE Consumer Goods index which fell 1.0 per cent on account of sell pressure in PZ (-4.9 per cent), Nigerian Breweries (-1.1 per cent) and Nestle Nigeria(-0.1 per cent). The NSE Banking index advanced the most, up 0.3 per cent on the back of improved buy interest in GTBank Plc (+0.2 per cent) and Zenith Bank (+0.2 per cent). The NSE Industrial Goods and NSE Oil & Gas indices rose 0.2 per cent apiece, driven by gains in Lafarge Africa Plc (+0.5 per cent), Conoil Plc (+10.2 per cent) and Total Nigeria (+5.0 per cent). In the same vein, the Insurance index appreciated 0.2 per cent.

The market rebounded on Tuesday, shaking off the bearish start to the week as the NSE ASI jumped by 1.3 per cent to close at 28,209.93. Market capitalisation shed N127.1 billion to be at N9.69 trillion. The market was lifted by gains in Dangote Cement Plc (+3.9 per cent), Zenith Bank (+0.5 per cent) and Access Bank Plc (+0.4 per cent).

Just like the previous day’s performance, all indices closed in green save for the Consumer Goods index which fell 0.7 per cent on account of losses in Unilever Nigeria Plc (-1.1 %) and Nigerian Breweries (-0.1 per cent). The NSE Industrial Goods led the gainers with 2.0 per cent driven by gains in Dangote Cement (3.9 per cent). Likewise, sustained buying interest in Conoil Plc (+10.2 per cent) and uptrend in Total Nigeria Plc (+2.5 per cent) drove the NSE Oil & Gas indices 1.3 per cent.

The uptrend continued at the equities market though marginally. The NSE ASI went up 0.02 per cent to close at 28,214.57. Gains in FBN Holdings, UBA, Zenith Bank, Oando and Stanbic IBTC contributed to the positive close. Investors traded 3.09 billion in 2,815 deals worth N6.24 billion in 2,815 deals. The three most actively traded stocks were: GNI (2.87 billion shares), Zenith Bank (51.22 million shares) and UBA (23.56 million shares).

Profit taking in some highly capitalised stocks halted the two-day rally with the NSE ASI falling by 0.17 per cent to close at 28,166.42. The stocks included FBN Holdings, UBA, GTBank, Dangote Cement Plc and Guinness Nigeria Plc. Although the general market mood remained negative, 1.6 per cent price decline recorded by Dangote Cement Plc the market southwards. Ex-Dangote Cement Plc, the market would have closed 0.6 per cent higher.

Performance across sectors was mixed as the NSE Banking and NSE Industrial Goods Index shed 0.2 per cent and 0.9 per cent. On the positive side, the NSE Oil & Gas Index advanced the most, rising to 3.4 per cent on the back of appreciation in Oando Plc (+7.1 per cent) and Mobil Oil Plc (+5.0 per cent) while the NSE Consumer Goods Index followed, increasing by 0.6 per cent as a result of gains in PZ Cussons (+4.9 per cent) and Nigerian Breweries Plc (+1.0 per cent).

On the last day of the week, the equity market rebounded today to close the week positively. Specifically, the NSE ASI appreciated by 0.29 per cent to close at 28,247.07 on gains recorded by FBN Holdings, Flour Mills, PZ Cussons, Dangote Cement and Guinness Nigeria.

The total value of stocks traded on the floors of the exchange on Friday was N1.56 billion, down by 56.91 per cent from N3.62bn recorded the previous day while volume was 265.07 million shares exchanged in 3,136 deals.

Market turnover

In all, the market recorded a turnover of 4.331 billion shares worth N16.803 billion in 16,797 deals in contrast to a total of 611.527 million shares valued at N5.495 billion that exchanged hands the previous week in 9,650 deals.

The Financial Services Industry remained the most active, leading with 4.177 billion shares valued at N9.788 billion traded in 9,805 deals, thus contributing 96.45 per cent and 58.25 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 65.533 million shares worth N5.017 billion in 2,855 deals. The third place was occupied by the Conglomerates Industry with a turnover of 31.751 million shares worth N125.102 million in 594 deals.

Trading in the top three equities namely – Great Nigerian Insurance Plc, FCMB Group Plc and Diamond Bank Plc accounted for 3.299 billion shares worth N3.704 billion in 1,308 deals, contributing 76.18 per cent and 22.04 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 615 units of Exchange Traded Products (ETPs) valued at N6,070.20 executed in 21 deals, compared with a total of 945 units valued at N9,541.90 transacted two weeks in 18 deals.

A total of 3,394 units of Federal Government Bonds valued at N3.263 million were traded in 5 deals compared to a total of 1,700 units of Federal Government Bonds valued at N1.591 million transacted the previous week in six deals.

Gainers and losers

Meanwhile, 33 equities appreciated in price during the week, lower than 34 equities in the previous week, while 25 equities depreciated in price, lower than 26 equities in the preceding week. A total of 122 equities remained unchanged higher than 120 equities recorded in the preceding week.

Conoil Plc led the price gainers for the week with 33.4 per cent, followed by Cutix Plc with 19.4 per cent, just as Total Nigeria Plc and Oando Plc appreciated by 18 per cent and 15.2 per cent respectively. Cadbury Nigeria Plc and Stanbic IBTC Holdings Plc went up by 14.1 per cent and 9.3 per cent in that order.

Other top price gainers include: MRS Oil Nigeria Plc (8.8 per cent); Eterna Plc (8.2 per cent); Zenith Bank Plc (7.5 per cent) and PZ Cussons Nigeria Plc (6.4 per cent).

Conversely, Caverton led the price losers, shedding 13.2 per cent, trailed by Neimeth International Pharmaceuticals Plc with 12.9 per cent, while Beta Glass Company Nigeria Plc (9.7 per cent). Guaranty Trust Bank Plc shed 7.2 per cent, just as Guinness Nigeria Plc and E-Tranzact International Plc fell by 7.0 per cent and 5.0 per cent respectively.

Other top price losers included: African Prudential Registrars Plc (4.9 per cent); Northern Nigeria Flour Mills (4.9 per cent), Airline Services & Logistics Plc (4.7 per cent) and Avon Crowncaps 7 Containers Plc (4.3 per cent).

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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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Crude Oil

Brent Plunges Below $83 Amidst Rising US Stockpiles and Middle East Uncertainty

Published

15 hours ago

May 8, 2024

Samed Olukoya

The global oil declined today as Brent crude prices plummeted below $83 per barrel, its lowest level since mid-March.

This steep decline comes amidst a confluence of factors, including a worrisome surge in US oil inventories and escalating geopolitical tensions in the Middle East.

On the commodity exchanges, Brent crude, the international benchmark for oil prices, experienced a sharp decline, dipping below the psychologically crucial threshold of $83 per barrel.

West Texas Intermediate (WTI) crude oil, the US benchmark, also saw a notable decrease to $77 per barrel.

The downward spiral in oil prices has been attributed to a plethora of factors rattling the market’s stability.

One of the primary drivers behind the recent slump in oil prices is the mounting stockpiles of crude oil in the United States.

According to industry estimates, crude inventories at Cushing, Oklahoma, the delivery point for WTI futures contracts, surged by over 1 million barrels last week.

Also, reports indicate a significant buildup in nationwide holdings of gasoline and distillates, further exacerbating concerns about oversupply in the market.

Meanwhile, geopolitical tensions in the Middle East continue to add a layer of uncertainty to the oil market dynamics.

The Israeli military’s incursion into the Gazan city of Rafah has intensified concerns about the potential escalation of conflicts in the region.

Despite efforts to broker a truce between Israel and Hamas, designated as a terrorist organization by both the US and the European Union, a lasting peace agreement remains elusive, fostering an environment of instability that reverberates across global energy markets.

Analysts and investors alike are closely monitoring these developments, with many expressing apprehension about the implications for oil prices in the near term.

The recent downturn in oil prices reflects a broader trend of market pessimism, with indicators such as timespreads and processing margins signaling a weakening outlook for the commodity.

The narrowing of Brent and WTI’s prompt spreads to multi-month lows suggests that market conditions are becoming increasingly less favorable for oil producers.

Furthermore, the strengthening of the US dollar is compounding the challenges facing the oil market, as a stronger dollar renders commodities more expensive for investors using other currencies.

The dollar’s upward trajectory, coupled with oil’s breach below its 100-day moving average, has intensified selling pressure on crude futures, exacerbating the latest bout of price weakness.

In the face of these headwinds, some market observers remain cautiously optimistic, citing ongoing supply-side risks as a potential source of support for oil prices.

Factors such as the upcoming June meeting of the Organization of the Petroleum Exporting Countries (OPEC+) and the prospect of renewed curbs on Iranian and Venezuelan oil production could potentially mitigate downward pressure on prices in the coming months.

However, uncertainties surrounding the trajectory of global oil demand, geopolitical developments, and the efficacy of OPEC+ supply policies continue to cast a shadow of uncertainty over the oil market outlook.

As traders await official data on crude inventories and monitor geopolitical developments in the Middle East, the coming days are likely to be marked by heightened volatility and uncertainty in the oil markets.

Crude Oil

Oil Prices Climb on Renewed Middle East Concerns and Saudi Supply Signals

Published

3 days ago

May 6, 2024

Samed Olukoya

As global markets continue to navigate through geopolitical uncertainties, oil prices rose on Monday on renewed concerns in the Middle East and signals from Saudi Arabia regarding its crude supply.

Brent crude oil, against which Nigeria’s oil is priced, surged by 51 cents to $83.47 a barrel while U.S. West Texas Intermediate crude oil rose by 53 cents to $78.64 a barrel.

The recent escalation in tensions between Israel and Hamas has amplified fears of a widening conflict in the key oil-producing region, prompting investors to closely monitor developments.

Talks for a ceasefire in Gaza have been underway, but prospects for a deal appeared slim as Hamas reiterated its demand for an end to the war in exchange for the release of hostages, a demand rejected by Israeli Prime Minister Benjamin Netanyahu.

The uncertainty surrounding the conflict was further exacerbated on Monday when Israel’s military called on Palestinian civilians to evacuate Rafah as part of a ‘limited scope’ operation, sparking concerns of a potential ground assault.

Analysts warned that such developments risk derailing ceasefire negotiations and reigniting geopolitical tensions in the Middle East.

Adding to the bullish sentiment, Saudi Arabia announced an increase in the official selling prices (OSPs) for its crude sold to Asia, Northwest Europe, and the Mediterranean in June.

This move signaled the kingdom’s anticipation of strong demand during the summer months and contributed to the upward pressure on oil prices.

The uptick in prices comes after both Brent and WTI crude futures posted their steepest weekly losses in three months last week, reflecting concerns over weak U.S. jobs data and the timing of a potential Federal Reserve interest rate cut.

However, with most of the long positions in oil cleared last week, analysts suggest that the risks are skewed towards a rebound in prices in the early part of this week, particularly for WTI prices towards the $80 mark.

Meanwhile, in China, the world’s largest crude importer, services activity remained in expansionary territory for the 16th consecutive month, signaling a sustained economic recovery.

Also, U.S. energy companies reduced the number of oil and natural gas rigs operating for the second consecutive week, indicating a potential tightening of supply in the near term.

As global markets continue to navigate through geopolitical uncertainties and supply dynamics, investors remain vigilant, closely monitoring developments in the Middle East and their impact on oil prices.

Crude Oil

Oil Prices Drop Sharply, Marking Steepest Weekly Decline in Three Months

Published

5 days ago

May 4, 2024

Samed Olukoya

Amidst concerns over weak U.S. jobs data and the potential timing of a Federal Reserve interest rate cut, oil prices record its sharpest weekly decline in three months.

Brent crude oil, against which Nigerian oil is priced, settled 71 cents lower to close at $82.96 a barrel.

Similarly, U.S. West Texas Intermediate crude oil fell 84 cents, or 1.06% to end the week at $78.11 a barrel.

The primary driver behind this decline was investor apprehension regarding the impact of sustained borrowing costs on the U.S. economy, the world’s foremost oil consumer. These concerns were amplified after the Federal Reserve opted to maintain interest rates at their current levels this week.

Throughout the week, Brent experienced a decline of over 7%, while WTI dropped by 6.8%.

The slowdown in U.S. job growth, revealed in April’s data, coupled with a cooling annual wage gain, intensified expectations among traders for a potential interest rate cut by the U.S. central bank.

Tim Snyder, an economist at Matador Economics, noted that while the economy is experiencing a slight deceleration, the data presents a pathway for the Fed to enact at least one rate cut this year.

The Fed’s decision to keep rates unchanged this week, despite acknowledging elevated inflation levels, has prompted a reassessment of the anticipated timing for potential rate cuts, according to Giovanni Staunovo, an analyst at UBS.

Higher interest rates typically exert downward pressure on economic activity and can dampen oil demand.

Also, U.S. energy companies reduced the number of oil and natural gas rigs for the second consecutive week, reaching the lowest count since January 2022, as reported by Baker Hughes.

The oil and gas rig count fell by eight to 605, with the number of oil rigs dropping by seven to 499, the most significant weekly decline since November 2023.

Meanwhile, geopolitical tensions surrounding the Israel-Hamas conflict have somewhat eased as discussions for a temporary ceasefire progress with international mediators.

Looking ahead, the next meeting of OPEC+ oil producers is scheduled for June 1, where the group may consider extending voluntary oil output cuts beyond June if global oil demand fails to pick up.

In light of these developments, money managers reduced their net long U.S. crude futures and options positions in the week leading up to April 30, according to the U.S. Commodity Futures Trading Commission (CFTC).