The Nation Newspaper

Tag: equities

  • Equities lose N321b as panic grips investors

    The downtrend at the Nigerian stock market yesterday turned from cautious to panic trading as investors scurried for exit over concerns that the global steep decline in crude oil price could worsen Nigeria’s tenuous foreign exchange management.

    With more than 11 losers to every gainer, the Nigerian Stock Exchange (NSE) was on full sell mode. The use of open market sell orders, which mandate brokers to sell at prevailing prices, turned the market into a complete buyers’ market, piling up losses on the divesting investors.

    Aggregate market value of all quoted companies stood at N321 billion in the marked down that followed the flood of sell orders. There were 34 losers to three gainers, while several other stocks were stuck at their nominal value of 50 kobo each.

    The mid-week steep decline worsened the negative eight-day average year-to-date return to -12.4 per cent. In the past three trading sessions, the stock market has lost an average of 7.6 per cent in consecutive negative trading sessions.

    Market analysts said the steep decline was a reflection of the poor sentiments in the market amidst news about the slump in crude oil price to 12-year low. Continuing decline in crude oil price, Nigeria’s main foreign exchange source, has left the country with low forex reserves and a bleeding currency. While there have been clamour for further devaluation of Naira, the Central Bank of Nigeria (CBN) has held on tightly to its forex control management, an increasingly difficult position in the light of low forex reserves and incomes.

    Many analysts said absence of a clear-cut forex management outlook was a major factor militating against portfolio investments in the Nigerian capital market. Foreign portfolio investors account for the larger percentage of transactions on the Nigerian stock market.

    Analysts at Afrinvest Securities said there were subsisting sell pressure in the market and there could be further declines in the trading sessions ahead.

    “We also do not see an immediate recovery in sentiments as all macroeconomic indicators and weak policy responses seen so far point to a structural slowdown in growth and tougher operating environment for companies,” Afrinvest Securities stated.

    The All Share Index (ASI)-the benchmark index at the stock market, slipped to a new low at 25,103.05 points as against its opening index of 26,034.93 points, representing a drop of 3.6 per cent. Aggregate market value of all quoted equities on the NSE dropped from N8.954 trillion to close at N8.633 trillion, indicating a loss of N321 billion.

    Nestle Nigeria, Nigeria’s highest-priced stock, led the losers with a loss of N41 to close at N779. Dangote Cement followed with a loss of N7.65 to close at N145.45. Seven-Up Bottling Company dropped by N7 to close at N175. Nigerian Breweries declined by N4.84 to close at N97.18. Lafarge Africa lost N3.55 to close at N91.31 while Okomu Oil Palm dropped by N3.51 to close at N32.64 per share.

    Total turnover stood at 369.23 million shares worth N1.69 billion in 2,893 deals. Diamond Bank was the most active stock with a turnover of 88.68 million shares worth N177.37 million in 32 deals. Unity Kapital Assurance followed with a turnover of 70 million shares valued at N35 million in a deal while Zenith Bank placed third on the activities chart with a turnover of 51.44 million shares worth N564.66 million in 536 deals.

    The three contrarian advancers yesterday were Ashaka Cement, which rose by N2.26 to close at N26.50; Custodian and Allied, which added 14 kobo to close at N4.20 and NEM Insurance, which inched up by two kobo to close at 67 kobo per share.

  • Equities open 2016 with N94b loss

    Nigerian equities expectedly opened the new fiscal year with the haunting effect of the whooping losses in the past two years as investors seek to pick up the pieces to outline the outlook for the stock market in the new business year.

    After the two-day rally that closed 2015 braced up the market with N648 billion gains, the market opened 2016 with profit-taking transactions and another round of rebalancing and realignment of portfolios. With a modest turnover of about 99 million shares and 18 losers and 12 gainers, the market appeared to still be under the shadow of the long holiday.

    Opening transactions at the Nigerian Stock Exchange (NSE) were also cautious as investors grappled with large consecutive losses in the past two years. Nigerian equities slumped to their worst level in three years in 2015 after crude oil slump and badly shaped fiscal positions triggered foreign exchange crisis, which exacerbated the simmering slowdown in the capital market.

    Against all projections, the Nigerian stock market closed 2015 with a negative full-year average return of -17.36 per cent, nearly a notch above -16.14 per cent recorded in 2014. Approximately, this implied a loss of N1.63 trillion in 2015, a somewhat hard-to-bear addition on a loss of N1.75 trillion recorded in 2014. Altogether, Nigerian equities had lost N3.38 trillion in the past two years, nearly a quarter of their market value of N13.226 trillion recorded at the beginning of the period.

    The NSE reopened yesterday with a turnover of 98.97 million shares worth N700.52 million in 2,309 deals. The highest turnover was a deal on 15.71 million shares of Austin Laz Company valued at N32.84 million. FBN Holdings placed second on the activity chart with a turnover of 10.70 million shares worth N52.96 million in 246 deals. Transnational Corporation of Nigeria recorded a turnover of 8.45 million shares worth N12.77 million in 120 deals.

    Aggregate market value of all quoted equities dropped by N94 billion from N9.851 trillion to close at N9.757 trillion. The All Share Index (ASI)-the value based common index that tracks prices of all quoted companies at the NSE, declined by 0.95 per cent to 28,370.32 points as against its opening index of 28,642.25 points.

    Nestle Nigeria, NSE’s highest-priced stock, led the losers with a loss of N30 to close at N830. Nigerian Breweries followed with a loss of N6.80 to close at N129.20. GlaxoSmithKline Consumer Nigeria dropped by N1.71 to close at N32.49. Ashaka Cement dropped by N1 to close at N24 while Transcorp Hotel lost 29 kobo to close at N5.51 per share.

    On the other hand, Okomu Oil Palm led a handful of contrarian stocks with a gain of N1.48 to close at N31.78. Cement Company of Northern Nigeria rose by 31 kobo to close at N9.66. Zenith Bank added 25 kobo to close at N14.30. Guinness Nigeria chalked up 12 kobo to close at N120.52 while Oando gathered 10 kobo to close at N6 per share.

  • Fashola to power firms: Cede more equities to investors

    Fashola to power firms: Cede more equities to investors

    The 11 power distribu-tion companies (DisCos) and five power generation companies (GenCos) should reduce their ownership by forming a partnership with companies abroad if they want to achieve growth, the Minister of Power, Mr Babatunde Raji Fashola, has said.

    He said when power firms form a synergy with their counterparts abroad, they would enjoy a comparative advantage by getting what they do not have in terms of expertise, equipment manufacturing, among others.

    Speaking during an interactive session with stakeholders, including owners of Egbin Power Company in Lagos, Fashola said the energy firms stand to gain a lot when they partner with their counterparts in developed economies.

    He said: “The power distribution companies and the power generation companies should go and hire help. Egbin Power Company has done that partnering with Korean Electricity Power Corporation (KEPCO) and it efforts have paid off. The firms must be willing to come up and drive new investments; they must be willing to reduce their ownership if they really want to drive their investments.’’

    According to him, operators in the sector need to share ideas together, not minding their geographic locations, arguing that the nation’s power sector is emerging and therefore needs that kind of collaboration to succeed.

    He said the Ministry owed the operators a duty to give them direction on issues or projects that would add value to their operations and Nigeria in particular.

    “Our role as a government is to listen to the businessmen and the companies; inspire those who have not taken steps in the area of collaboration like what the management of Egbin has done; that is why we are calling on the new power investors to seek help abroad for growth,” he said.

    He said the electricity sector needs what he described as a willing buyer and a willing seller to succeed, arguing that this is the only direction that would bring out growth of the operators.

    He said once there is a willing buyer and a willing seller in the power sector, there would be growth across the electricity value chain.

     

     

  • Equities rebound as investors go for undervalued stocks

    Where were more than two advancers for every decliner yesterday at the Nigerian Stock Exchange (NSE) as a renewed demand for quoted equities spurred a major rebound. After successive declines in the previous two trading sessions, bargain-hunters returned to the stock market on Thursday, holding out higher prices for most transactions.

    From banking to consumer goods sectors, investors showed improved appetite for quoted equities. Aggregate market value of all quoted equities rode on the back of the increased demand to close at N9.354 trillion, N69 billion above its opening value of N9.285 trillion.

    The All Share Index (ASI), the benchmark index at the NSE, rose by 0.75 per cent to close at 27,205.95 points compared with its opening index of 27,004.50 points. The NSE Banking Index rose by 2.3 per cent while the NSE Consumer Goods Index appreciated by 2.0 per cent. The upturn reduced the negative average year-to-date return to -21.50 per cent.

    There were 25 gainers against 11 losers in a five-hour trading sessions that saw substantial interests in low-priced large-cap stocks as well as low-cap penny stocks. Nigerian Breweries, Nigeria’s second most capitalised stock, led the advancers with a gain of N4.30 to close at N116.31. Guinness Nigeria, the second most capitalised brewer, followed with a gain of N1.60 to close at N124.60. Presco added N1.30 to close at N32.30. Zenith Bank rose by N1.25 to close at N15.25. PZ Cussons Nigeria gathered 96 kobo to close at N27.46. Cadbury Nigeria rose by 93 kobo to close at N19.61 while Seven-Up Bottling Company added 90 kobo to close at N182.

    Total turnover stood at 179.05 million shares valued at N1.46 billion in 2,747 deals. The three most active stocks, in terms of volume, were Law and Union Rock Insurance, 32.85 million shares, United Bank for Africa, 30.87 million shares and FBN Holdings, which recorded a turnover of 16.10 million shares. The most active sectors were financial services, 147.51 million shares; conglomerates, 15.17 million shares and consumer goods sector, which recorded a turnover of 5.0 million shares.

    Analysts at Cowry Asset Management attributed the upturn to renewed bargain-hunting.

    “The rebound today was in line with our expectation of bargain hunting after many value counters fell to year lows yesterday. In our view, the fact that some stocks with low prices are still not generating enough buy-attractions suggests that aggregate market buy-appetite remains weak and the current positive sentiment might be short-lived. We continue to advise caution on the part of retail investors with a short holding period,” analysts at Afrinvest Securities stated.

    Dangote Cement recorded the highest loss of N2.19 to close at N160. Fidson Healthcare and AXA Mansard Insurance dropped by 13 kobo each to close at N2.56 and N2.61 respectively.

  • Equities slump to 37-month low amidst crude oil decline

    Nigerian equities slumped below its three-year low yesterday as global decline in crude oil price exacerbated concerns over Nigeria’s fiscal and macroeconomic outlook. After a loss of 1.08 per cent or N104 billion on Tuesday, quoted equities dropped by 1.92 per cent or N 181 billion on Wednesday as investors reacted sharply to similar decline in crude oil price.

    The average decline at the Nigerian stock market yesterday correlated with 1.95 per cent decline in the Brent Crude Oil price to $43 per barrel. Crude oil incomes account for about 85 per cent of Nigeria’s national revenue. Nigeria’s N6 trillion budget for 2016 was benchmarked against crude oil price of $38 per barrel.

    “OPEC’s decision to abandon its production quota which has led to a further decline in oil prices, seems to have fuelled the renewed sell pressure on the Nigerian Bourse,” said Afrinvest Securities- a Lagos-based dealer at the Nigerian Stock Exchange (NSE).

    Aggregate market value of all quoted equities on the NSE slumped from N9.466 trillion to close at N9.285 trillion, representing a loss of N181 billion. The All Share Index (ASI)-the value-based common index that tracks prices of all quoted companies, also dipped by 1.92 per cent from 27,533.03 points to close at 27,004.50 points, its lowest point in the past 37 months.

    The successive decline built up the negative average year-to-date return at the stock market to -22.08 per cent. With 24 losers to 15 gainers, widespread losses across the sectors and losses within the highly capitalised stocks group. The NSE Industrial Goods Index dropped by 2.6 per cent. The NSE Consumer Goods Index declined by 0.6 per cent while the NSE Insurance Index slipped by 0.3 per cent. However, the NSE Oil & Gas Index rose by 0.9 per cent.

    Dangote Cement, the most capitalised stock at the stock market, recorded the highest loss of N8.53 to close at N162.19. Guinness Nigeria followed with a loss of N1.90 to close at N123. Nigerian Breweries, the second most capitalised stock at the market, lost 99 kobo to close at N112.01. Cadbury Nigeria declined by 98 kobo to close at N18.68. GlaxoSmithKline Consumer Nigeria lost 66 kobo to close at N36. PZ Cussons Nigeria dipped by 50 kobo to close at N26.50. Guaranty Trust Bank lost 37 kobo to close at N18.53. Zenith Bank declined by 35 kobo to close at N14 while Ecobank Transnational Incorporated and Fidson Healthcare lost 14 kobo each to close at N16 and N2.69 respectively.

    Afrinvest Securities stated that the downtrend reflected the waning investors’ appetites consequent on the ongoing decline in crude oil prices that has sparked concerns on Nigeria’s fiscal viability and macroeconomic fundamentals.

    “As outlook for the oil market remains bearish, strong policy responses from fiscal and monetary mangers to adjust to the reality of a lower oil revenue environment are medium term factors that could lead to an improvement in sentiments. In the interim, our short term outlook for the market remains bearish although we anticipate that bargain hunting might result in a mild uptrend in the trading session ahead,” analysts at Afrinvest Securities stated.

    Total turnover stood at 240.8 million shares valued at N2.41 billion in 3,073 deals. Zenith Bank was the most active stock with a turnover of 64.3 million shares worth N856.04 million in 590 deals.

  • Average loss hits 20.31% as equities dwindle further

    An average investor has so far this year lost more than one-fifth of his investment portfolio in quoted equities as the downtrend at the Nigerian stock market continued last week.

    Key benchmark indices at the Nigerian Stock Exchange (NSE) indicated continuing depreciation in values of most quoted equities last week, worsening the negative average year-to-date performance of the market.

    Aggregate market value of all quoted equities dropped to N9.495 trillion at the weekend, representing a loss of N175 billion on the opening value of N9.670 trillion recorded at the beginning of the week. The All Share Index (ASI)-the common index that tracks prices of all quoted equities, declined by 1.83 per cent to close the week at 27,617.45 points as against its week’s opening index of 28,131.28 points.

    There were 41 decliners during the week as against 21 advancers while 128 stocks closed flat. The preponderance of losers to gainers and the weight of losses pushed the negative average year-to-date return to -20.31 per cent.

    Total turnover stood at 1.04 billion shares worth N13.01 billion in 13,407 deals last week compared with a total of 793.557 million shares valued at N7.15 billion traded in 12,831 deals two weeks ago. Financial services sector remained atop activity chart with a turnover of 857.05 million shares valued at N6.77 billion traded in 7,916 deals; representing 82.4 per cent of total turnover volume. The consumer goods sector followed with a turnover of 64.55 million shares worth N4.22 billion in 2,479 deals. The conglomerates industry sector placed third with a turnover of 62.745 million shares worth N585.655 million in 638 deals.

    The trio of FBN Holdings Plc, Zenith International Bank Plc and Diamond Bank Plc accounted for 475.12 million shares worth N3.68 billion in 3,026 deals, representing 45.7 per cent of total turnover volume.  Also, a total of 49,895 units of Exchange Traded Products (ETPs) valued at N916,710 were traded in 38 deals compared with a total of 2,143 units valued at N1.734 million traded in 35 deals in the previous week. A total of 8,262 units of Federal Government Bonds valued at N9.151 million were also traded in seven deals.

    Market analysts however said the market might witness gradual rebound in the weeks ahead as investors respond to Central Bank of Nigeria (CBN)’s monetary policy and year-end earnings of quoted companies.

    “Following the MPC decision to cut Monetary Policy Rate (MPR) and expand market liquidity, we envision increased participation of domestic institutional players in the stock market going forward giving plunge in yields in fixed income securities,” said Afrinvest Securities at the weekend.

    The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) had on Tuesday after its two-day meeting, slashed the MPR, which serves as benchmark for interest rates, from 13 per cent to 11 per cent, with an asymmetric corridor of +2 per cent and -7 per cent. The apex bank also reduced Cash Reserve Requirement from 25.0 per cent to 20.0 per cent.

     

     

     

  • Equities lose N114b as investors await fiscal direction

    Quoted equities lost N114 billion last week as investors remained cautious, waiting for clear fiscal and monetary direction from the newly constituted Federal Executive Council (FEC). President Muhammadu Buhari last Wednesday swore in and allocated portfolios to ministers.

    Aggregate market value of all quoted equities at the Nigerian Stock Exchange (NSE) dropped by N114 billion to close the week at N9.915 trillion as against its week’s opening value of N10.029 trillion. The All Share Index (ASI)-the value-based common index that tracks prices of all quoted equities, declined by 1.14 per cent to close at 28,841.67 points as against the week’s opening index of 29,175.35 points. There were 38 decliners against 29 gainers.

    Total turnover stood at 2.06 billion shares worth N23.4 billion in 14,992 deals last week as a total of 1.95 billion shares valued at N17.34 billion traded in 15,762 deals in previous week. The financial services sector accounted for 1.484 billion shares valued at N14.555 billion in 8,406 deals; representing 71.90 per cent and 62.21 per cent of the total equity turnover volume and value respectively.

    Analysts attributed the low market performance to lack of clear fiscal and monetary policy direction. “Although we are moderately bullish on personalities of the aforementioned ministers to drive policy initiatives, the fact that the appointments were delayed for five months in a period of deteriorating macroeconomic fundamentals has set expectations high for them. Important policy decisions lie ahead and the market would expect the Finance Minister to work out a coordinated policy framework along with monetary authorities to respond to the macroeconomic challenges of slow growth, heightened inflationary pressure, declining reserve buffers and exchange rate uncertainty,” analysts at Afrinvest Securities stated.

    Analyst noted that the new Minister of Finance during her screening at the Senate backed the CBN’s FX administrative measures in the FX market. The President, at the swearing-in ceremony also restated his support for the CBN, noting that, “the CBN has also implemented country-specific and innovative policies that have helped to stabilise the exchange rate and conserve our reserves’’.

    “It remains to be seen how the current CBN’s strategy will be balanced with the expected expansionary Fiscal 2016 budget. Already, investors in the fixed income market are already pricing in a possible tightening of liquidity by the CBN post-cabinet inauguration, resulting in sell-down pressure across FGN-bond tenors towards the end of the week. Although there has been no official communication from the CBN on resumption of OMO auctions, we do not foresee any monetary policy tightening in the short term given the deteriorating macroeconomic fundamentals,” Afrinvest Securities stated.

  • Akwa Ibom govt ready to invest in pension equities

    The Akwa Ibom State government says it is ready to invest in the pension industry to generate income for the state.

    Governor Udom Emmanuel  spoke in an interview with the News Agency of Nigeria (NAN) on the sideline of the on-going World Pension Summit in Abuja.

    He said the N5 trillion pension fund could create a lot of investment opportunities for interested investors.

    “The main reason for this is with over N5 trillion, which is over $25 billion, we have a whole lot of investment opportunities where we are doubly sure the pension fund can actually be invested and they can also realise the money because that is the essence of investment.

    “You don’t invest to lose your capital; you invest to actually get adequate return on your investment. Even in terms of road infrastructure, the economic viability of the roads in the Southsouth (zone) is being linked up by Akwa-Ibom.

    “So, we can actually earmark some of these for the investors to come under the PPP (public private partnership) model. We as a state government will also be interested in taking up some equity.“

    The governor said pensioners in the state were receiving their monthly pension on a regularly.

    According to him, the state government has been concentrating on the development of infrastructure in the past few months.

    “We have concentrated on some of this infrastructures, especially in terms of the human capital development,“ he said.

    Emmanuel told NAN that the state had the natural resources and the creativity to drive development in all sectors of the economy.

    He, however, said adequate funding was required to develop the infrastructure needed to drive the development process.

    “You could actually hear when I talked about the three Cs – cash, commodity and creativity. In this case we are creative in ideas, policies and in our approach on programmers that we invent.

    “In terms of commodity, we all know how wealthy we are in terms of the abundant natural resources. Cash could be a problem, but who owns the cash? It is either the capital market or the pension fund,“ he said.

    Emmanuel advocated the setting up of an institution that would ensure proper and accurate remittance of pension contributions.

    “Once you set up strong institutions, those things are mere administrative. We are after building those strong institutions so that processes and procedures can actually run normally.

    “So, set up strong institutions and things will happen – policies, procedures and processes will actually run,’’ he said.

     

     

  • Equities record modest gain after JP Morgan’s scare

    Nigerian equities stabilised and ended the week with a modest gain of N56 billion, riding over the initial knee-jerk reaction to the decision of JP Morgan to exclude Nigerian sovereign bonds from the JPMorgan Government Bond Index-Emerging Markets Indices (JP Morgan GBI-EM Index) by the end of October.

    After the JP Morgan announcement on Tuesday, quoted equities lost N312 billion on Wednesday and moderated with a loss of N18 billion on Thursday. The market rallied N92 billion on Friday to fully neutralise the mid-week meltdown, closing the week with a modest gain of N56 billion.

    The benchmark index at the stock market, the All Share Index (ASI) of the Nigerian Stock Exchange (NSE), recorded average week-on-week gain of 0.60 per cent to close at 29,689.08 points as against the week’s opening index of 29,511.08 points. Aggregate market value of all quoted equities on the NSE rose from N10.148 trillion to close at N10.204 trillion, representing an increase of 0.54 per cent. Average year-to-date return remained negative at -14.33 per cent.

    Price trend analysis showed a stable but tight market situation as bargain-hunting combined with intermittent profit-taking transactions. There were 32 advancers against 37 decliners while 121 stocks closed flat. Trans Nationwide Express recorded the highest gain, in percentage terms, with a gain of 23.36 per cent to close at N1.32. Guinness Nigeria followed with a gain of 18.90 per cent to close at N152.19. Okomu Oil Palm Plc rose by 14.19 per cent to close at N27.12. Evans Medical chalked up 12.50 per cent to close at 72 kobo while Costain (West Africa ) rose by 12.28 per cent to close at 64 kobo.

    Total turnover stood at 1.41 billion shares worth N13.51 billion in 19,950 deals last week as against a total of 2.44 billion shares valued at N21.07 billion that were traded in 22,736 deals in the previous week. The financial services sector led the activity chart with 1.16 billion shares valued at N8.63 billion traded in 11,999 deals; representing 82.24 per cent and 63.90 per cent of the total equity turnover volume and value respectively. The conglomerates sector followed with a turnover of 87.04 million shares worth N474.66 million in 946 deals. The third place was occupied by the information and communication technology sector which recorded a turnover of 49.82 million shares worth N28.9 million in 50 deals.

    The trio of United Bank for Africa Plc, Zenith International Bank Plc and Diamond Bank Plc were the most active stocks, jointly accounting for 588.314 million shares worth N4.667 billion in 4,235 deals, representing 41.77 per cent and 34.55 per cent of the total equity turnover volume and value respectively.

    Also traded during the week were a total of 1,526 units of Exchange Traded Products (ETPs) valued at N695,885.40 million executed in 17 deals compared with a total of 11,357 units valued at N5.868 million transacted in 24 deals two weeks ago. A total of 3,675 units of Federal Government Bonds valued at N3.611 million were traded last week in eight deals compared with a total of 3,489 units valued at N3.674 million traded in similar eight deals two weeks ago.

    “While we observed a knee-jerk reaction in the Nigerian capital market since the announcement, we expect this to stabilize in the medium to long term as we await policy direction from the Buhari’s administration,” Afrinvest Securities stated at the weekend.

    Afrinvest Securities projected that cautious trading would pervade the market for most of this week as the United States Federal Reserves’ highly anticipated September FOMC meeting is scheduled for 16th and 17th of September amid unrelenting instability in crude oil market as Saudi rejects calls to defend market price.

    Analysts at Afrinvest Securities however noted that the JP Morgan’s exclusion could lead to further depreciation in the capital market but this may not be significant.

    “We imagine that the mild reaction that greeted the JP Morgan’s announcement suggests that the risk had already been priced as most risk-averse foreign investors may have already exited the market before now. It also suggests that the level of domestic institutional investors’ participation in the market is higher than commonly acknowledged. Nevertheless, we expect borrowing cost of government to rise at the next auction as subscription level may likely reduce while investors will seek additional premium to compensate for the increased risk perception and liquidity,” Afrinvest Securities stated.

    According to analysts, a further impact is expected to be felt as the exit of foreign investors is expected to increase government’s dependence on domestic investors thereby narrowing the pool of funds in the bonds market. Ultimately, this may increase the risks of government borrowing crowding out private sector investment due to higher borrowing cost.

    “The financial market sentiment is still likely to continue to feel the impact of this news flow as the domestic investor sentiments will seem to be the new major force driving the Nigerian fixed income market whilst the equities market may still continue to enjoy a mix of foreign and domestic sentiments as Nigerian equities still remains in the MSCI (Morgan Stanley Capital Index) for frontier markets,” Afrinvest Securities stated.

    Analysts pointed out that with a weight of 1.5 per cent out of $183.8 billion in the index, $2.8bn worth of foreign holdings of Nigerian government bonds is expected to exit the market, but this is significantly lower than a total of $8.0 billion in September 2014.

    This is expected to further pressure the external reserves as these funds, which have been gradually exiting since 2014, will be expected to leave the financial system; although the effect may not be noticeable on interbank foreign exchange rate given the Central Bank of Nigeria (CBN)’s managed peg of N199/$1.

     

     

  • Equities record modest recovery on bargain-hunting

    The Nigerian stock market yesterday heaved a sigh of relief from a sustained depression that had shaken the market to new low and dropped key indices below their psychological points. Investors turned round to take advantage of the depreciation in share prices, pumping up demand that triggered modest recovery in key indices.

    The All Share Index (ASI), the value-based common index that tracks prices of all quoted companies on the Nigerian Stock Exchange (NSE), recorded a modest day-on-day gain of 0.30 per cent to close at 28,221.75 points as against its opening index of 28,137.65 points.

    Aggregate market value of all quoted equities rose marginally by N29 billion from N9.670 trillion to close at N9.699 trillion. The modest recovery moderated the negative average year-to-date return to -18.57 per cent.

    While there were still more decliners than advancers, substantial rally within the highly capitalised group buoyed the overall market position. Guinness Nigeria topped the 20-stock gainers’ list with a gain of N5.49 to close at NN115.50. Mobil Oil Nigeria rose by N4.45 to close at N147.95. Julius Berger Nigeria added N1.85 to close at N43. Dangote Cement rose by 87 kobo to close at N166.02. Guaranty Trust Bank gathered 70 kobo to close at N20.70. Vitafoam Nigeria chalked up 40 kobo to close at N6.15. Dangote Sugar Refinery rose by 26 kobo to close at N6.60. Skye Bank added 19 kobo to close at N2.13. FBN Holdings rose by 17 kobo to close at N5.40 while Diamond Bank added 13 kobo to close at N2.89 per share.

    Turnover was around average with the exchange of 333.21 million shares worth N2.81 billion in 4,449 deals. Financial services stocks accounted for 196.64 million shares worth N830.8 million in 1,719 deals. Zenith Bank was the most active stock with a turnover of 59.52 million shares valued at N824.09 million in 377 deals. United Bank for Africa followed with a turnover of 52.5 million shares worth N157.44 million in 298 deals. Skye Bank placed third with a turnover of 44.01 million shares valued at N91.14 million in 198 deals.

    “The change in the market mood today can be attributed to renewed optimism in the some largely capitalized stocks trading at attractive prices. We acknowledge that this swing in the ASI is largely driven by bargain-hunting, hence we implore investors to continue to take position on value stocks with sound fundamentals,” Afrinvest Securities stated in post trading review.

    However, the market remained with a strong negative undertone. Thirty one stocks recorded price depreciation yesterday. Total Nigeria led the losers with a loss of N4.38 to close at N142.50. Flour Mills of Nigeria lost N2.56 to close at N23.76. PZ Cussons Nigeria declined by N2.24 to close at N20.87. CAP dropped by N1.95 to close at N37.05 while International Breweries declined by 83 kobo to close at N16.17 per share.