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Tag: Nigerian equities

  • Nigerian equities close first half flat on election fears

    From a net capital gain of about N1.7 trillion at the height of its rally in the first quarter (Q1), Nigerian equities closed the second quarter at the weekend flat as investors weighed macroeconomic uncertainties and political risks as preparations for the 2019 general elections hot up.

    A last minute rally on Friday helped the equities market to marginal average gain of 0.09 per cent for the six-month period, compared with average gain of 8.53 per cent recorded at the end of Q1. Nigerian equities recorded average loss of 7.77 per cent in the second quarter, equivalent to net capital depreciation of N1.13 trillion. Equities had netted capital gain of N1.384 trillion by the end of Q1.

    The All Share Index (ASI), the common value-based index that tracks share prices of quoted companies on the Nigerian Stock Exchange (NSE), closed the first half at 38,278.55 points as against its 2018’s opening index of 38,243.19 points. Aggregate market value of all quoted equities on the NSE closed weekend at N13.866 trillion as against N13.609 trillion recorded at the beginning of the year, representing net gain of N257 billion or 1.88 per cent. The difference between the ASI and aggregate market value was due to supplementary listings of shares.

    Aggregate market value of all quoted equities had closed the Q1 2018 at N14.993 trillion as against its year’s opening value of N13.609 trillion, representing a net increase of N1.384 trillion or 10.17 per cent. The ASI also rose from its 2018’s opening index of 38,243.19 points to close the first quarter at 41,504.51 points, representing average gain of 8.53 per cent.

    Nigerian equities had in January 2018 hit all-time high market capitalisation of N15.3 trillion while the ASI had risen to 43,041.54 points, its highest index points since October 2008. However, profit-taking fluctuations that started in March 2018 worsened considerably into a swinging selloff in May 2018. Nigerian equities lost N1.15 trillion in May 2018, equivalent to average month-on-month decline of 7.67 per cent.  Nigerian equities had lost N557 billion in March and showed restraint with a modest loss of N44 billion in April.

    Nigerian equities had closed 2017 with full-year average return of 42.30 per cent, ranking within the top 10 best-performing equities across the world. Aggregate market value of quoted equities closed 2017 with net capital appreciation of N4.36 trillion.

    Most analysts believe political risks played considerable roles in the slowdown, although profit-taking transactions were evident on several stocks that had seen substantial gains in the past 15 months.

    Afrinvest Securities Managing Director, Mr. Ayodeji Ebo, said both corporate performance and evolving political environment were major factors in the second quarter.

    “As election activity kicks in, investors may trade cautiously prompting more volatility in the equity market in second quarter relative to first quarter,” Ebo had said.

    Chief Economist, Vetiva Capital, Michael Famoroti, said election risks have increased the uncertainties in the polity.

    “Impending elections are also likely to induce greater economic uncertainty and distract policy and governance at the tail-end of the year, neither of which is positive for confidence or investment,” Famoroti said.

    In its second half  2018 outlook report on the Nigerian economy, key sectors and capital markets, Vetiva Research predicted that average full-year return for Nigerian equities this year will be between -5 per cent and +5 per cent.

    The report stated that preparations for the 2019 general elections would have pronounced impact on the Nigerian equities market.

    According to the report, despite an improving macro-economic environment and a semblance of policy stability, Nigeria’s financial markets would likely be steered by the fallout of electoral activities and rising global interest rates.

    The investment firm, however, reiterated its positive outlook on the Nigerian equities in the medium to long-term, noting that Nigerian equities have considerable underlying value.

    “Comparable multiples with peers suggest the Nigerian equity market remains undervalued. We maintain a strongly positive post-election outlook on Nigerian equities,” Vetiva stated.

  • Nigerian equities lose N200b amid global slowdown

    Nigerian equities closed at the weekend with a net capital loss of N200 billion as investors reassessed portfolio compositions ahead of the meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN). The MPC is scheduled to have its second meeting this year between Monday, May 21 and Tuesday, May 22, 2018.

    Transactions at the Nigerian stock market were marked by considerable selloffs across the sectors, echoing a global slowdown that saw most global markets closing the week on a negative note. Average decline at the Nigerian equities market stood at 1.34 per cent for the week, representing net capital depreciation of N200 billion.

    The sustained decline cut the average return on Nigerian equities so far this year to 5.83 per cent, with banking stocks providing support to the overall performance with a sectoral above-average return of 7.93 per cent.

    Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) declined from its week’s opening value of N14.860 trillion to close at N14.660 trillion. The All Share Index (ASI)-the main price index for Nigerian equities and sovereign equities index for Nigeria, dropped to 40,472.45 points at the weekend as against its opening index of 41,022.31 points for the week.

    With nearly three losers for every gainer, the negative overall market position was due to sell pressure across the sectors as a combination of profit-taking and portfolio realignment overwhelmed demand for shares.

    All sectoral indices closed in the red, with the exception of the NSE Consumer Goods Index, which recorded a marginal gain of 0.03 per cent. The NSE 30 Index-which tracks the 30 most capitalised companies at the NSE, declined by 1.54 per cent. The NSE Banking Index recorded the highest week-on-week drop of 2.80 per cent. The NSE Oil and Gas Index followed with a drop of 2.64 per cent. The NSE Industrial Goods Index posted a negative return of -1.37 per cent while the NSE Insurance Index dipped by 0.80 per cent.

    The negative market situation at the Nigerian equities market largely mirrored global equities slowdown, with negative returns across America, Europe, Middle East, Asia and Africa. In Africa, South Africa’s FTSE All Share Index indicated a drop of 0.8 per cent. Kenya’s NSE 20 Index showed average loss of 3.0 per cent. Ghana’s GSE Composite Index dropped by 1.8 per cent while Egypt’s EGX 30 Index declined by 1.6 per cent.

    United States‘ twin indices-S & P 500 and NASDAQ dropped by 0.5 per cent and 0.6 per cent respectively. Hong Kong’s Hang Seng Index dropped by 0.2 per cent. Brazil’s Ibovespa Index slipped by 3.4 per cent. Russia’s RTS Index declined by 1.7 per cent while India’s BSE Sens Index dropped by 1.9 per cent.

    However, United Kingdom’s FTSE Index appreciated by 0.7 per cent. France’s CAC 40 Index rose by 1.4 per cent. Germany’s XETRA DAX appreciated by 0.7 per cent. Japan’s Nikkei 225 Index showed positive return of 0.8 per cent while China’s Shanghai Composite Index posted average return of 0.9 per cent.

    Turnover at the Nigerian equities market stood at 1.46 billion shares worth N23.67 billion in 19,674 deals last week compared with 1.59 billion shares valued at N25.99 billion traded in 21,115 deals in the previous week. The financial services sector was the most active with a turnover of 1.22 billion shares valued at N16.83 billion in 11,092 deals; thus contributing 83.98 per cent and 71.093 per cent to the total equity turnover volume and value respectively.

    The consumer goods sector followed on the activities chart with a turnover of 76.43 million shares worth N5.19 billion in 3,425 deals while the oil and gas sector placed third with a turnover of 57.193 million shares worth N527.880 million in 2,237 deals.

    The three most active stocks were Zenith Bank International Plc, Guaranty Trust Bank Plc and United Bank for Africa Plc, which altogether accounted for 491.649 million shares worth N14.159 billion in 3,265 deals, contributing 33.75 per cent and 59.83 per cent to the total equity turnover volume and value respectively.

    Also traded during the week were a total of 153,246 units of Exchange Traded Products (ETPs) valued at N4.009 million in 22 deals, compared with a total of 444,190 units valued at N2.514 million traded in 11 deals two weeks ago.

    In the sovereign debt segment, a total of 7,508 units of Federal Government valued at N7.506 million were traded in 12 deals compared with a total of 7,647 units valued at N8.047 million traded 30 deals penultimate week.

    There were 54 losers against 20 gainers for the week. Japaul Oil & Maritime Services Plc led the losers, in percentage terms, with a drop of 25 per cent to close at 30 kobo per share. Skye Bank followed with a loss of 19.2 per cent to close at 76 kobo while Diamond Bank declined by 18.4 per cent to close at N1.55 per share.

    On the positive side, Sovereign Trust Insurance led the gainers with a gain of 30 per cent to close at 26 kobo. Mutual Benefits Assurance-which declared a dividend per share of 2.0 kobo during the week, posted a gain of 17.9 per cent to close at 33 kobo while NPF Microfinance Bank rose by 10.2 per cent to close at N1.94 per share.

    Most analysts expected the CBN to retain its rates and maintain the current policy stance. However, improving macroeconomic outlook is expected to create bargains at the equities market.

    “We opine that sentiment on oil exporting economies could potentially be boosted in the coming week,” Afrinvest Securities stated in a weekend note.

    “Despite continued selloffs in the equities market, still-strengthening macroeconomic fundamentals remain suggestive of gains on the exchange,” Cordros Capital stated.

     

  • Nigerian equities lose N1.05tr in 7 days

    Nigerian equities lost N369 billion yesterday in their highest decline in five months, increasing the total net capital depreciation over the seven days of consecutive decline to N1.05 trillion. All major indices at the Nigerian Stock Exchange (NSE) closed in the red yesterday as investors stepped up open market orders to attract bids, forcing most transactions to close at lower prices.

    The benchmark indices indicated average day-on-day decline of 2.41 per cent, equivalent to net capital loss of N369 billion. The average year-to-date return pared to a single digit at 9.06 per cent.

    The All Share Index (ASI)-the benchmark value index for Nigerian equities, closed yesterday at 41,708.15 points as against its opening index of 42,737.89 points. Aggregate market value of all quoted equities also declined from its opening value of N15.337 trillion to close at N14.968 trillion.

    Nigerian equities had lost N542 billion in five-day consecutive negative trading sessions last week, the longest downtrend so far this year. With equities reaching a high of N16 trillion two weeks ago, most analysts had attributed the recent decline to profit-taking transactions by investors seeking to monetise their capital gains. The ASI had opened last week at 44,639.99 points while the aggregate market value of all quoted equities had opened at N16.019 trillion.

    With 40 losers to 15 gainers, all sectoral indices at the NSE also closed negative yesterday. The NSE Consumer Goods Index recorded above average decline of 2.8 per cent. The NSE Industrial Goods Index dropped by 1.6 per cent. The NSE Insurance Index declined by 1.5 per cent. The NSE Oil & Gas Index depreciated by 0.6 per cent while the NSE Banking Index slid by 0.2 per cent.

    “Following seven consecutive days of decline in the market, we do not rule out the possibility of an upswing in performance before the end of the week. Our view is buttressed by the fact that the current 14-day RSI stands at 38.8 points, which is closer to the oversold region,” Afrinvest Securities stated.

    Large-cap stocks headlined the losing streak. Nestle Nigeria-Nigeria’s highest-priced stock, led the losers with a loss of N40 to close at N1, 320. Dangote Cement-Nigeria’s most capitalised stock followed with a loss of N13.30 to close at N258.70. Nigerian Breweries-the second most capitalised quoted company dropped by N5.20 to close at N127.80. Guinness Nigeria declined by N5 to close at N105. International Breweries lost N2.50 to close at N57.50 while Forte Oil declined by N2.40 to close at N45.80 per share.

    On the positive side, Lafarge Africa led the gainers with a gain of N1 to close at N51. Zenith Bank followed with a gain of 60 kobo to close at N30. Access Bank and Berger Paints rose by 45 kobo each to close at N12 and N9.45 respectively. Dangote Sugar Refinery added 30 kobo to close at N21 while Eterna chalked up 27 kobo to close at N5.69 per share.

    Total turnover stood at 470.5 million shares valued at N3.68 billion in 6,309 deals. Diamond Bank was the most active stock with a turnover of 67.7 million shares valued at N181.14 million. FCMB Group followed with a turnover of 49.22 million shares worth N126.18 million while Fidelity Bank ranked third with 42.78 million shares valued at N129.55 million.

    Market analysts at FSDH Securities said they expected that the market performance may remain soft in the days ahead, but there is a possibility of a rebound at the end of the week, driven by bargain hunting.

     

  • Nigerian equities down as global stock market plunges

    Nigerian equities down as global stock market plunges

    Nigerian equities declined for the second consecutive trading session yesterday as investors stepped up profit-taking amidst concerns that global equities slowdown may negatively impact the domestic market.

    Most advanced and emerging global markets have witnessed contractions in recent days.

    With nearly three losers for every gainer, the benchmark index at the Nigerian Stock Exchange (NSE) showed average decline of 0.87 per cent yesterday, equivalent to net capital loss of N138 billion. Nigerian equities had lost N135 billion on Monday.

    The sustained decline moderated the average year-to-date return to 14.73 per cent, which also reflected the market-wide decline in returns across sectors.

    US stock markets swung rapidly yesterday amid frantic Wall Street trading triggered by earlier losses.

    Shares opened about two per cent down, and have shuttled in between positive and negative territory throughout the day.

    The Dow Jones and Nasdaq are now nearly two per cent  ahead, while the S&P 500 is up by nearly one per cent.

    Investors are fretting over the prospect of rising interest rates, which push up borrowing costs for companies and consumers.

    The gyrations followed steep declines on Wall Street on Monday, which sparked a sell-off in Asia and Europe.

    Analysts have been forecasting for months that the financial markets were due a correction after a long period of rising prices.

    Earlier yesterday, markets in London, Frankfurt and Paris had initial losses of up to three per cent, before recovering some ground. Japan’s Nikkei 225 closed down 4.7 per cent.

    The steep sell-off began last week after data in the US showed stronger than expected wage growth.

    The report came amid other shifts, including new tax cuts, trade tensions, and a sinking dollar, that analysts say could lead inflation to rise faster than expected.

    The conditions pose a challenge for the Federal Reserve, which will need to raise interest rates to counter inflation without moving so aggressively that it severely curbs economic activity.

    London’s FTSE 100 closed down almost 200 points or 2.6% at 7141. Frankfurt’s Dax and Paris’s CAC were down 2.3% and 2.4% respectively.

    On Monday the FTSE 100 closed at its lowest level since April of last year.

    The falls follow some good years for investors.

    In 2017 the Dow in the US was up 25% and London’s FTSE 100 rose 7.6%

    Stock markets around the world are falling, driven by fears coming out of the United States (U.S).

    Major indexes in New York, Tokyo and London have suffered steep losses. And a key gauge of investors’ fear spiked to its highest level in more than two years.

    Analysts are trying to figure out if it’s a short-term correction for markets that had recently hit record highs or a sign of deeper concerns.

    Markets in Asia and Europe were falling yesterday. Japan’s Nikkei plunged 4.7 per cent, Hong Kong stocks plummeted 5.1 per cent and London’s FTSE 100 was down nearly two per cent.

    The U.S. is the world’s largest economy and home to the biggest financial markets on the planet. The dollar is the currency of reference for investors around the world.

    What happens on Wall Street almost inevitably ripples around the globe. Markets in other global financial centers, such as London and Tokyo, are particularly sensitive to it.

    But more closed systems, such as China, are often less heavily affected. Stocks in Shanghai have been down 2.2 per cent since Thursday compared with eight per cent in Tokyo.

    How worried should you be?

    It depends who you ask. But assuming the current stock market declines are a short-term drop rather than a sign of deeper problems, financial experts generally say you shouldn’t panic.

    Even if stocks continue to decline over the next few days, market corrections are normal, Greg McBride, Bankrate.com’s chief financial analyst, said.

    The U.S. and other major economies are growing healthily at the moment.

    CEO of Gerber Kawasaki Wealth and Investment Management, Ross Gerber, said on CNN: “I caution investors to really be patient here and look for opportunities and not to panic. It’s really not a time to be worried about the long-term prospects of the market.”

    The Trump connection

    The plunging stock market is awkward for President Trump. He’s frequently taken credit for the big run-up in U.S. share prices during his presidency.

    “It’s a risky game to talk about the markets. But it seems like Trump is going to live or die by the stock market,” said Greg Valliere, chief global strategist at Horizon Investments.

    The White House said in a statement that Trump was focused on “our long-term economic fundamentals, which remain exceptionally strong.” The statement cited strengthening economic growth, low unemployment and increasing wages for workers.

    But some of Trump’s policies also feed into the concerns weighing stocks at the moment.

    The recent huge tax cuts for businesses were initially cheered by investors. But they also prescribed expensive medicine to an already healthy U.S. economy.

    Stimulating a strong economy could be too much of a good thing. Morgan Stanley warned in the fall that “overheating” the economy may backfire by causing stocks to “boom then bust.”

    And the current stresses in the bond market reflect the concerns that the U.S. Treasury needs to take on more debt to pay for the tax cuts.

  • Nigerian equities hit all-time N15.78tr high

    Nigerian equities hit all-time N15.78tr high

    Nigerian equities scored a double yesterday as sustained scramble for quoted shares ballooned the aggregate market value of all quoted equities  to N15.783 trillion, the highest in the 57 years of trading at the stock market.

    The All Share Index (ASI)-the benchmark index that tracks share prices at the Nigerian Stock Exchange (NSE), also rallied to its nine-year high at 44,054.72 points. The ASI had hit 66,000 points at the height of the unprecedented stock bubble in 2008.

    The NSE was established as Lagos Stock Exchange in 1960 but it started formal trading in 1961. The NSE began trading with 19 securities; there are more than 160 quoted companies now.

    With nearly three gainers to every loser, bullish trend gathered momentum as the management of the NSE yesterday unfolded its strategic plan for the new business year. The ASI recorded a day-on-day increase of 2.17 per cent to close at 44,054.72 points as against its opening index of 43,119.00 points. Aggregate market value of all quoted equities also rose from its opening value of N15.447 trillion to close at N15.783 trillion, representing a net capital gain of N336 billion.

    With this, the average year-to-date return jumped to 15.2 per cent, equivalent to net capital gain of about N2.17 trillion so far this year.

    At a review of 2017 and preview of 2018 yesterday at the NSE, Chief Executive Officer  Mr Oscar Onyema said the outlook for the Nigerian capital market is encouraging.

    ”Indeed, to some extent, political activities and currency movements will have some effect on the market, but we expect that such impacts will be short lived and the performance of the underlying business activities will ultimately determine market performance,” Onyema said.

    He added that the NSE was on track to become a more agile and flexible demutualised securities exchange.

    “We are hopeful that the Demutualization Bill will be signed into law in 2018, and are working assiduously with our advisers to fine-tune outstanding aspects of the demutualization project as well as providing clarity and transparency on the process via regular engagement with all our valued stakeholders,” Onyema said.

    In 2018, Onyema said the NSE will launch Exchange Traded Derivative instruments and continue to engage with the government on privatization and listing of state owned enterprises in collaboration with the private sector.

    The Exchange will also maintain its role as an advocate for the adoption and implementation of market friendly policies.

    According to him, in keeping with its objective of taking a vigorous and adaptive approach to strategy execution, the NSE re-assessed its strategic agenda in the light of changing dynamics in both the operating environment and the global exchange landscape against the backdrop of the fourth industrial revolution. This culminated in a new corporate strategy for the 2018 – 2021 period.

    “Our efforts will be geared at satisfying our customers, boosting our domestic retail segment, and enhancing our organisation for a demutualized structure,” Onyema said.

     

  • Subdued foreign interests shave N606b from Nigerian equities

    Nigerian equities lost N606 billion over the past six trading sessions as foreign investors hesitated to wait for the clear results of the Nigerian foreign exchange (forex) amidst global uncertainties on the heels of the decision of the United Kingdom (UK)’s decision to withdraw from European Union (EU).

    Nigerian equities traded in the negative in five of the last six trading sessions as the excitements that trailed the change by the Central Bank of Nigeria (CBN) from fixed forex policy to market-driven, ‘free’ currency melted into the whirlwinds created by the UK’s decision to exit the EU.

    Aggregate market value of all quoted companies on the Nigerian Stock Exchange (NSE), which had opened penultimate Friday at a high of N10.671 trillion, closed this weekend at N10.065 trillion, representing a loss of N606 billion. In the five-day trading session last week, equities recorded a net loss of N462 billion, trading in four negative trading sessions against one recovery.  Market capitalisation had opened last week at N10.527 trillion.

    The benchmark index for the Nigerian stock market, the All Share Index (ASI), which had peaked at 31,071.25 points, depreciated to 29,305.40 points, indicating average six-day loss of 5.68 per cent. The ASI, Nigeria’s sovereign equities index, dropped by 4.39 per cent last week. It had opened at 30,649.66 points.

    Market analysts attributed the decline in recent trading sessions to the spillovers from the UK’s EU exit referendum, popularly known as Brexit, month-end rebalancing and gap between the forex change and flow of portfolio investments.

    A dealing member at the NSE told The Nation that the stock market witnessed massive sell-off immediately after the Brexit decision, a downturn that was compounded by the reluctance of foreign portfolio investors.

    Total turnover last week slowed down to 1.47 billion shares worth N17.06 billion in 21,246 deals as a total of 2.39 billion shares valued at N26.38 billion traded in 28,072 deals two weeks ago. The financial services industry led the activity chart with 1.17 billion shares valued at N10.24 billion in 12,697 deals; contributing 79.6 per cent and 60.0 per cent of the total equity turnover volume and value respectively. The three most active stocks were Guaranty Trust Bank Plc, FBN Holdings Plc and Transnational Corporation of Nigeria Plc, which altogether accounted for 523.549 million shares worth N6.539 billion in 5,223 deals, representing 35.65 per cent and 38.32 per cent of the total equity turnover volume and value respectively.

    There were 22 gainers and 52 losers last week as against 40 gainers and 32 losers recorded in the previous week. A total of 106 equities remained unchanged last week compared with 108 equities recorded in the previous week. Julius Berger Nigeria led the gainers with a gain of 15.75 per cent to close at N50.93. Conoil followed with a gain of 15.68 per cent to close at N25.45 while Union Dicon Salt rose by 15.67 per cent to close at N17.35. On the negative side, Smart Products Nigeria recorded the highest percentage loss of 25.49 per cent to close at 76 kobo. Honeywell Flour Mills dropped by 22.60 per cent to close at N1.61 while Champion Breweries declined by 14.86 per cent to close at N4.24 per share.

     

     

  • Our position on Nigerian equities, by MSCI

    MSCI, the global provider of research-based indexes and analytics, is consulting global institutional investors on the ease of capital flows in Nigeria and is not proposing exclusion of Nigeria from its composite indexes.

    Contrary to insinuations in some quarters that MSCI plans to exclude Nigeria from its indexes later this month, MSCI in a statement stated that it is monitoring the market accessibility due to the foreign exchange constraints in Nigeria and would take into consideration opinions of market participants and any potential mitigation plan before deciding on the treatment of MSCI Nigerian indexes.

    While ease of capital inflows and outflows is one of the key criteria in the MSCI Market Classification Framework, only a material deterioration of equity market accessibility may result in the exclusion of such market from the MSCI Frontier Markets Indexes and a reclassification to Standalone Market status.

    MSCI said after the introduction of restrictions on foreign currency trading and the resulting continuous deterioration of foreign exchange market liquidity, it is closely monitoring the situation in Nigeria with regards to market accessibility.

    In relation to the foreign exchange situation, MSCI stated that it is proposing to not implement changes resulting from the upcoming May 2016 semi-yearly index review and from selective corporate events for the MSCI Nigeria Indexes, as well as selected composite indexes of which Nigeria is a component.

    Thus, the expected announcement on April 29, this year would not be to exclude Nigeria from MSCI Frontier Markets Index but to decide if Nigerian constituents in the index will be part of the semi-annual index reviews or rebalancing due by May, 2016. Besides, the feedback from the consultations with market participants and its institutional clients will form part of the basis for MSCI’s next country reclassification due by June, 2016. Usually, MSCI will give considerable time in the event of any decision on any country.

    “MSCI welcomes feedback from market participants on the current level of accessibility of the Nigerian equity market as well as any potential mitigation plan,” MSCI stated.

     

  • Nigerian equities gain N546b in dividend rally

    Nigerian equities sustained an all-week rally last week as dividend recommendations tickled a scramble for quoted equities. Key indices at the Nigerian Stock Exchange (NSE) showed the stock market with its biggest rally so far this year, with a week-on-week gain of 6.57 per cent, equivalent to a gain of N546 billion.

    With more advancers than decliners, the market showed widespread gains across the sectors as investors sought to lock in into equities with prospects for high dividend yields. The momentum of trading was boosted by dividend recommendations by three companies, especially the N136.3 billion dividend announcement by Dangote Cement Plc.

    The board of Dangote Cement said shareholders would receive a dividend per share of N8. Africa Prudential Registrars also announced a dividend per share of 43 kobo. Greif Nigeria Plc also declared a dividend per share of 60 kobo during the week.

    The dividend recommendations and expectations that other companies might announce their results and dividends quickened investors’ appetite. Aggregate market value of all quoted equities rose from the week’s opening value of N8.336 trillion to close at N8.882 trillion, representing a gain of N546 billion.

    The benchmark index for the Nigerian stock market, the All Share Index (ASI), rallied to close at 25,820.10 points as against its week’s opening index of 24,228.79 points, indicating a week-on-week gain of 6.57 per cent.

    Cross sectoral analysis showed widespread positive sentiments. The NSE Premium Index, which tracks the trio of Dangote Cement, FBN Holdings and Zenith Bank International, recorded the highest gain of 20.67 per cent. The NSE 30 Index, which tracks the 30 most capitalised stocks, rallied 4.39 per cent. The NSE Banking Index appreciated by 5.45 per cent. The NSE Insurance Index returned 1.42 per cent. The NSE Lotus Islamic Index, which tracks stocks that comply with Islamic investment rules, appreciated by 6.39 per cent. The NSE Industrial Goods Index rose by 11.38 per cent while the NSE Pension Index appreciated by 0.37 per cent.

    However, the NSE Main Board Index, NSE Consumer Goods Index and NSE Oil and Gas Index depreciated by 0.54 per cent, 1.36 per cent and 6.10 per cent respectively. Average year-to-date return improved to -9.85 per cent.

    There were 35 gainers against 24 losers last week as against 21 gainers and 35 losers recorded in the previous week. A total of 130 stocks were flat as against 134 stocks that closed flat in the previous week. Tiger Branded Consumer Company recorded the highest gain, in percentage terms, with a gain of 30.3 per cent to close at N1.72. United Capital followed with a gain of 29.55 per cent to close at N1.71. Africa Prudential Registrars rallied 27.73 per cent to close at N3.27. Dangote Cement rose by 24.44 per cent to close at N168 while Ecobank Transnational Incorporated rallied 14.35 per cent to close at N18.25 per share.

    On the negative side, Forte Oil recorded the highest loss of 14.26 per cent to close at N293.23. FCMB dropped by 10.13 per cent to close at 71 kobo. Conoil dropped by 9.71 per cent to close at N16.56. Ikeja Hotel lost 9.60 per cent to close at N2.73 while Wema Bank dropped by 9.38 per cent to close at 87 kobo.

    Total turnover stood at 1.48 billion shares worth N7.99 billion in 15,743 deals last week as against a total of 4.48 billion shares valued at N11.74 billion traded in 14,124 deals two weeks ago. The financial services sector remained the most active with 1.32 billion shares valued at N5.59 billion in 9,955 deals, representing 89.36 per cent and 69.94 per cent of the total equity turnover volume and value respectively. The conglomerates sector staged a distant sector with a turnover of 50.81 million shares worth N108.3 million in 557 deals. The third place was occupied by the consumer goods sector with a turnover of 49.655 million shares worth N1.376 million in 2,434 deals.

    The trio of Wapic Insurance Plc, FCMB Holding Plc and Access Bank Plc were the most active, in terms of volume, jointly accounting for 578.24 million shares worth N933.53 million in 1,424 deals, representing 39.18 per cent and 11.68 per cent of the total equity turnover volume and value respectively.

    Also traded last week were a total of 40,021 units of Exchange Traded Products (ETPs) valued at N1.885 million executed in 44 deals, compared with a total of 14,844 units valued at N14.134 million traded in 29 deals.

    A total of 4,063 units of Federal Government Bonds valued at N4.903 million were traded in three deals compared to a total of 4,990 units of Federal Government Bonds valued at N5.799 million traded in two deals two weeks ago.

    Global stock analysis indicated largely bullish trading across the advanced and emerging markets. In United Kingdom, the UK FTSE Index rose by 1.8 per cent. In United States, the S&P 500 and NASDAQ rose by 2.3 per cent and 2.5 per cent.

    In the emerging markets of Brazil, Russia, India, China and South Africa, equities were largely on the upswing. The Brazil Ibovespa rallied 18.9 per cent. The India BSE Sens rose by 6.4 per cent. Russia RTS Index gained 4.8 per cent. South Africa’s FTSE/JSE Index rose by 5.3 per cent. In Africa, Kenya’s Nairobi Stock Exchange All Share Index rose by 2.8 per cent. Egypt’s RGX closed flat while the Ghana Stock Exchange Composite Index dropped by 0.4 per cent.

    “The improved performance of the market this week is line with our expectation of bargain hunting in blue chips with dividend payment history. We expect performance would be swayed by earnings releases next week with a positive bias to sentiment,” Afrinvest Securities, which trades on the NSE, stated in a weekend note to investors.

  • Nigerian equities have prospects for huge future gains, says Afrinvest

    Nigerian equities have prospects for huge future gains, says Afrinvest

    Inspite of the steep declines that started this year, Nigerian equities have prospects to deliver considerable long-term return to investors, Afrinvest Securities has stated.

    In a preview of the market in 2016, Afrinvest Securities said the equities market has huge opportunities that could surmount the present slowdown and deliver better returns to investors over the long-term.

    The investment firm noted that investors must not be discouraged by the current cloudy and disquieting moment but rather should focus on the long-term potential of the equities.

    “Nevertheless, we maintain that the equities market presents a huge opportunity for long term positioning at the moment despite the obvious pessimism and difficulties,” Afrinvest Securities stated.

    According to the report, the financial market is currently going through a turbulent time as a reflection of the intensity of instability in the global and domestic environment. From slowing growth concerns in China and plunging commodity prices in the global market to fiscal and currency crises in the domestic economy.

    The report outlined that the key concerns affecting investor sentiments were broadly the revenue structure of government which is mainly skewed to oil, the structure of foreign exchange earnings and foreign exchange restrictions and policy flip-flops that have rendered the operating environment for existing businesses and large companies decidedly negative and, tragically, increasingly hostile to the sorely needed foreign capital inflows.

    “Whilst a blurry fiscal direction as well as instability in the global oil market kept investors watching, the scale and frequency of policy reversals by the apex bank have effectively doused any remaining morsel of investor optimism towards investing in Nigeria in the present time despite enticingly depressed asset prices. This has been amplified by the position to sustain an unrealistic exchange rate at the official/interbank market relative to the parallel market,” Afrinvest Securities stated.

    The report projected three possible scenarios playing out in the equities market in 2016. Firstly, the bull case scenario with 20 per cent probability which sees the benchmark index at the Nigerian Stock Exchange (NSE), the All Share Index (ASI), recording a marginal gain of 1.2 per cent in 2016. The second scenario, the base scenario, with 50 per cent probability which sees the NSE ASI declining by 5.9 per cent and the third scenario, the bear case scenario, with 30 per cent probability which sees the NSE ASI dropping by 9.4 per cent in 2016.

    “Our overall expectation is a negative return of 5.9 per cent for the NSE ASI in 2016 bringing the index to close at 26,951 points by year-end,” Afrinvest Securities concluded.

    The investment firm advised investors with short-term outlook to reduce exposure to equities and amass fixed income securities by adopting an active fixed income trading strategy in 2016.

     

     

  • Nigerian equities lose N1.45tr in 10 months

    Nigerian equities lose N1.45tr in 10 months

    Investors in the Nigerian stock market have lost  N1.45 trillion in accrued capital gains in the past 10 months as share prices at the Nigerian Stock Exchange (NSE) continued to drop. Several quoted companies opened at the weekend at their lowest prices in the past one year while a large segment of stocks have stagnated at nominal value, underlining widespread downtrend at the  market.

    Year-to-date analysis indicated that average investors might have lost 15.81 per cent of their investments in the first 10 months of this year, which aggregated to a total market loss of approximately N1.5 trillion. Aggregate market value of quoted companies on the NSE closed October at N10.028 trillion, representing a loss of N1.45 trillion or 12.63 per cent from the year’s opening value of N11.478 trillion.

    The benchmark index at the NSE, the All Share Index (ASI) closed  at 29,177.72 points at the weekend as against its opening index of 34,657.15 points for the year, representing a decline of 15.81 per cent. The ASI, a value-based common index that tracks prices of all quoted equities on the NSE, doubles as Nigeria’s sovereign equity index and is used in competitive global evaluation of stock market returns.

    With inflation at 9.4 per cent, inflation-adjusted average year-to-date return at the stock market now stands at -25.21 per cent, simply implying that average investors have lost more than a quarter of the real value of their investments.

    Several equities across the sectors have closed at their lowest prices in the past one year including Julius Berger Nigeria, Oando, Eterna, Northern Nigerian Flour Mills, MRS Oil and Gas, Scoa Nigeria, Transnational Corporation of Nigeria, Dangote Flour Mills, International Breweries and UACN Property Development Company (UPDC) among others.

    Most stocks in the top-league sectors of banking, insurance, healthcare, oil and gas, and food and beverages sectors are trading around their lowest prices over the 52-week period. These included leading stocks such as UAC of Nigeria, Flour Mills of Nigeria, Cadbury Nigeria, Access Bank, FBN Holdings, Union Bank of Nigeria, Diamond Bank, Fidelity Bank, Seplat Petroleum Development Company, May & Baker Nigeria and Skye Bank Plc among others. More than a quarter of quoted stocks, especially in the largely dormant insurance and other non-banking financial services sectors, have stagnated at nominal value, in most cases 50 kobo.

    The performance so far is hitting investors who had been at the top-end of the global decline last year. Nigerian equities had ranked among the worst-performing stocks globally last year with average full-year decline of 16.14 per cent.

    Aggregate market value of all quoted equities closed 2014 at N11.477 trillion as against its opening value of N13.226 trillion for the year, indicating a loss of N1.75 trillion during the year.

    Against the opening value for 2014, the current market value of all quoted equities represents a loss of N3.2 trillion over the 22-month period.

     

     

    Sectoral analysis showed widespread losses. The NSE Premium Index, which tracks the trio of Dangote Cement, FBN Holdings and Zenith Bank International, indicated a 10-month return of -14.10 per cent. The NSE 30 Index, which tracks the 30 most capitalised stocks on the NSE, recorded average decline of 15.57 per cent. The NSE Pension Index, which tracks 40 stocks specially screened for pension investments, indicated average return of -13.70 per cent. Others returns included NSE Banking Index, -12.15 per cent; NSE Insurance Index, -6.63 per cent; NSE Consumer Goods Index, -17.20 per cent; NSE Oil and Gas Index, -10.54 per cent; NSE Industrial Goods Index, -1.67 per cent while NSE Main Board Index and NSE Lotus Islamic Index recorded -15.09 per cent and -12.64 per cent respectively.

    Group head, financial advisory, GTI Capital, Mr. Hassan Kehinde, said the stock market, which had been bogged down by political and policy risks during the political transition period, was affected by post-transition uncertainties and foreign exchange crisis, which led to the exit of influential foreign investors.