The Nation Newspaper

Tag: banking stocks

  • Investors scout for banking stocks amidst tight trading

    Banking stocks dominated trading yesterday at the Nigerian Stock Exchange (NSE) as investors continued the tit-for-tat bargain-hunting and profit-taking that usually precedes earnings season. With 19 gainers and losers each, benchmark indices at the Exchange showed average decline of 0.34 per cent, equivalent to net capital loss of N42 billion.

    The momentum of activities however remained above average, driven by transactions in banking stocks. Banking stocks accounted for some three-quarters of turnover within the five-hour trading session.

    Aggregate market value of all quoted equities closed at N12.617 trillion as against its opening value of N12.659 trillion. The All Share Index (ASI)-the main price index for the Nigerian stock market, declined from its opening index of 36,776.60 points to close at 36,652.82 points. The average year-to-date return dipped to 36.38 per cent.

    Most sectoral indices however closed on the upside, underlining the fact that the negative overall market position was largely due to losses by highly capitalised stocks. The NSE Insurance Index appreciated by 2.4 per cent. The NSE Oil & Gas Index rose by 0.6 per cent while the NSE Industrial Goods Index inched up by 0.2 per cent. However, the NSE Consumer Goods Index dropped by 1.1 per cent while the NSE Banking Index slipped by 0.2 per cent.

    Nigerian Breweries-NSE’s second most capitalised stocks, led the losers with a drop of N4.90 to close at N164. Stanbic IBTC Holdings dropped by 95 kobo to close at N40.05. United Bank for Africa declined by 16 kobo to close at N9.18. Vitafoam Nigeria lost 14 kobo to close at N2.66 while University Press and Dangote Sugar Refinery dropped by 12 kobo each to close at N2.45 and N13.65 respectively.

    On the positive side, Seplat Petroleum Development Company led the gainers with a gain of N7.51 to close at N480. Nestle Nigeria rose by N2.92 to close at N1,233.12. Cement Company of Northern Nigeria added 86 kobo to close at N10.18. Guinness Nigeria rose by 75 kobo to close at N99.25 while Red Star Express appreciated by 24 kobo to close at N5.16 per share.

    Total turnover stood at 336.38 million shares valued at N1.83 billion in 3,689 deals. Diamond Bank was the most active stock with a turnover of 230.56 million shares valued at N230.24 million. Skye Bank followed with 13.44 million shares worth N6.77 million. Zenith Bank recorded a turnover of 10.5 million shares valued at N265.77 million.

    “As indicated by the market breadth, we expect sentiment to stay strong in the interim as investors take position ahead of the release of nine-month 2017 corporate earnings which are expected to be largely positive,” Afrinvest Securities stated.

  • Banking stocks’ return hits 51.2% as equities continue rally

    Banking stocks’ return hits 51.2% as equities continue rally

    Investors in banking stocks have earned as much as a double of any other average investor as equities continued their most consistent price appreciation in recent years. The NSE Banking Index, which tracks price appreciation in the most active banking sector, indicated average year-to-date return of 51.16 per cent at the weekend, a double of the average year-to-date return of 25.81 per cent for the overall stock market.

    Banking stocks led another week of sustained price appreciation last week with a week-on-week gain of 4.99 per cent by the sectoral gauge. The All Share Index (ASI)-the common index that tracks prices of all equities at the Nigerian Stock Exchange (NSE), closed the week with a gain of 1.60 per cent.

    General and sectoral indices showed that most investors are  trading on the profit side with the ASI, which serves as Nigeria’s sovereign equities return index, indicating a quarter profit for the average investors by the weekend.

    Besides banking stocks, the uptrend at the Nigerian stock market had been driven by large-cap stocks. The NSE 30 Index, which tracks the 30 most capitalised stocks, rose by 2.28 per cent last week to close the week with average year-to-date return of 29.42 per cent. The NSE Industrial Goods Index, which includes Nigeria’s most capitalised company-Dangote Cement, posted a year-to-date return of 25.09 per cent in spite of a marginal decline of 0.28 per cent during the week.

    Other tracked indices showed positive returns. The NSE Insurance Index rose by 3.57 per cent last week to increase average year-to-date return to 15.4 per cent. The NSE Consumer Goods Index inched up by 0.51 per cent last week to close average accruable capital gain so far this year at 13.68 per cent. However, a drop of 4.20 per cent last week almost halved year-to-date return in the oil and gas sector to 5.83 per cent.

    Aggregate market value of all quoted equities at the NSE rose from the week’s opening value of N11.504 trillion to close the week at N11.692 trillion, representing net capital gain of N188 billion. The ASI also rallied from its index on board of 33,276.68 points to close at 33,810.56 points.

    While highly capitalised stocks held the market against running profit-taking, there were more losers against gainers during the week as investors sought to monetise accumulated capital gains into cash. There were 38 gainers against 42 losers last week compared with 59 gainers and 21 losers in the previous week.

    Penny stocks continued to lead the rally. May & Baker Nigeria’s share price rose by 60.6 per cent to N4.56 per share last week. Skye Bank followed with a gain of 41.5 per cent to close at 75 kobo. Cement Company of Northern Nigeria rose by 33.7 per cent to N8.85. Transnational Corporation of Nigeria appreciated by 22.4 per cent to N1.86 while Ashaka Cement rose by 21.2 per cent to N14.07 per share.

    Total turnover stood at 2.737 billion shares worth N32.042 billion in 32,217 deals compared with a total of 3.100 billion shares valued at N29.180 billion that exchanged hands week in 33,677deals two weeks ago.

    The financial services industry led the activity chart with 2.189 billion shares valued at N21.792 billion traded in 18,832 deals; thus contributing 79.98 per cent and 68.01 per cent to the total equity turnover volume and value respectively. The conglomerates industry followed with 287.945 million shares worth N621.772 million in 2,031deals. The third place was occupied by Consumer Goods Industry with a turnover of 114.832 million shares worth N5.370 billion in 5,040 deals.

    The trio of Access Bank Plc, Zenith International Bank Plc and Transnational Corporation of Nigeria Plc were the most active. They accounted for 918.046 million shares worth N10.324 billion in 5,809 deals, contributing 33.53 per cent and 32.22 per cent to the total equity turnover volume and value respectively.

    Also traded during the week were a total of 16,300 units of Exchange Traded Products (ETPs) valued at N973,376 in three deals compared with a total of 40.317 million units valued at N178.841 million transacted in 12 deals in previous week.

    In the debt segment, a total of 12,193 units of Federal Government Bonds valued at N12.440 million were traded in 14 deals compared with a total of 10,860 units valued at N10.196 million traded 10 deals in previous week.

  • Investors scramble for banking stocks as equities gain N315b

    Banking stocks were the toasts of the investing public last week as the Nigerian equities rode on the back of increased demand to add N315 billion in new capital gains.

    With the release of the earnings reports and dividend recommendations of Guaranty Trust Bank and Zenith Bank, investors upped demand for banking stocks in anticipation of the earnings and dividends of the other stocks.

    Average gain in the banking sector was more than thrice the average gain the entire market just as banking stocks dominated the activity chart. The NSE Banking Index, the value-based index that tracks banking sector, recorded a week-on-week gain of 9.79 per cent, the highest by any group during the week.

    The All Share Index (ASI), the benchmark index that tracks prices of all quoted equities on the Nigerian Stock Exchange (NSE), indicated week-on-week gain of 3.14 per cent. The ASI rose from its opening index of 30,103.81 points to close the week at 31,049.37 points.

    Aggregate market value of all quoted equities closed weekend at N10.360 trillion as against N10.045 trillion recorded as opening value for the week, representing addition of capital gains of about N315 billion.

    The NSE 30 Index, which tracks the 30 most capitalized stocks on the NSE, returned average gain of 4.05 per cent during the week. Banking stocks constitute more than one third of the stocks under the NSE 30 Index. The NSE Industrial Goods Index recorded a modest gain of 1.92 per cent while the NSE Consumer Goods Index rose by 1.89 per cent. However, the NSE Oil and Gas Index dwindled by 2.0 per cent. The NSE Insurance Index dropped by 0.12 per cent while the NSE Lotus Islamic Index, which tracks stocks that comply with Islamic law, indicated a week-on-week decline of 1.75 per cent.

    Total turnover at the Nigerian Stock Exchange (NSE) last week stood at 2.13 billion shares worth N24.39 billion in 22,532 deals, representing considerable increase on a total of 1.68 billion shares valued at N21.32 billion that were traded in 21,062 deals two weeks ago.

    The turnover indicated increased demand for equities with the positive market situation leaving most equities on the gainers’ list. Price trend analysis showed that 40 equities appreciated while 30 stocks depreciated during the week.

    Financial services sector was the most active sector with a turnover of 1.8 billion shares valued at N14.19 billion traded in 14,424 deals; representing 84.24 per cent and 58.20 per cent of the total turnover volume and value respectively. Conglomerates sector followed with a turnover of 119.52 million shares worth N630.21 million in 1,216 deals. Consumer goods sectors placed third with a turnover of 100.12 million shares worth N6.6 billion in 3,307 deals.

    Banking stocks dominated activity chart as investors responded positively to the release of audited reports and accounts and dividend recommendations by leading banks. The trio of FBN Holdings Plc, Access Bank Plc and United Bank for Africa Plc were the most active stocks accounting for 966.58 million shares worth N6.79 billion in 5,901 deals. This represented 45 per cent and 27.8 per cent of the total turnover volume and value respectively.

    Besides equities, trading remained subdued in other securities. Exchange traded products (ETPs) recorded a turnover of 223,470 units valued at N3.41 million in 21 deals compared with a total of 184,927 units valued atN2.80 million traded in 29 deals two weeks ago.

    Also, a total of 426 units of Federal Government’s bond valued at N440, 065 were traded in two deals last week as against a total of 100 units valued at N103, 583 that was traded in a deal two weeks ago.

     

     

  • Analysts pick banking stocks for 2013 returns

    Investment analysts at FSDH Securities have said relatively low prices, good dividend outlook and emerging financing opportunities that may boost banks’ incomes stand banking stocks in good stead as toasts of investors this year.

    In its Banking Industry Review and Outlook made available to The Nation on Monday, FSDH Securities said the balance sheet position and operations of banks as well as their relative stock market valuations point to the attractiveness of banking stocks.

    According to the report, the drivers of investment in banking stocks in early 2013 would include good dividend payment expected from the 2012 business year and attractive valuation of banking stocks as banks are still trading at low multiples.

    Banks have common financial year, ending December 31. Early audited report and accounts for the year ended December 31, 2012 are expected in late February or early March. Quoted companies are expected to file in their audited reports not later than three months after their year-end, according to the best practice rules of the Nigerian Stock Exchange (NSE).

    Analysts at FSDH said emerging financing opportunities in the economy, especially in power, transportation, agriculture, wholesale and retail trade, and oil and gas sectors, should drive banks’ earnings going forward.

    “The economic reform in the country presents a huge opportunity for the banks operating in the country. The Central Bank of Nigeria and other regulators in the financial market have taken proactive steps to implement a number of policies to make banks focus on their core banking business, develop specialisation and safeguard the Nigerian banking system,” the report highlighted.

    Investment pundits noted that banking sector’s robust balance sheet, after the bad loans purchase by Asset Management Corporation of Nigeria (AMCON) has strengthened the capacity of banks to increase their risk assets in the near-to-medium term, a major plank for expected future growth.

    According to the report, banks need to grow their risk assets to earn more income going forward, especially given the comfortable capital base of banks as the industry’s average capital adequacy ratio is above the minimum regulatory requirement.

    Analysts, however, said that banks need to put in place additional strategies to reduce their cost to income ratio adding that in spite of the comfortable capital base, banks could do more with additional tier two funding.