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Tag: Nigerian equities

  • Nigerian equities lose N228b as China crisis goes global

    Nigerian equities lose N228b as China crisis goes global

    Global stock markets yesterday took a major plunge after China suffered its worst trading session in eight years.

    An unprecedented collapse in Chinese shares sent tremors through financial markets, triggering the ugliest day of global trading since the depths of the financial crisis eight years ago.

    Billions were wiped off indices across the world in a day of frenetic selling, which saw the Shanghai composite suffer an 8.5 per cent decline, its worst one-day performance since 2007. The mass panic, dubbed “Black Monday” by China’s official state news agency, was driven by investors’ dashed hopes that Beijing would inject a fresh round of stimulus into its economy following a series of disappointing data last week.

    In Nigeria, after losing N283 billion last week, equities opened this week with a whooping loss of N228 billion in the five-hour trading session. Average decline stood at 2.22 per cent as relatively higher losses by 46 stocks, including the market’s largest stocks, overwhelmed modest gains by nine stocks.

    The opening downtrend pushed the negative average year-to-date return at the Nigerian stock market to -15.71 per cent. The negative market position appeared to be increasing, unnerving the more optimistic investors, lowering demand and increasing open-order supply, which has virtually turned the market into a discount window.

    Analysts were negative on the market’s outlook in the short-term, although there was almost unanimity on the good prospects of Nigerian equities in the medium to long terms.

    “We anticipate another round of bearish trading at tomorrow`s session (today) as there are no catalysts in the horizon to spur positive sentiments. The tumbling in global oil prices at the international markets may also be taking its toll on the market,” SCM Capital, formerly Sterling Capital Markets, stated in a post-trading review.

    Aggregate market value of all quoted companies on the Nigerian Stock Exchange (NSE) almost dropped below its psychological N10 trillion position to close at N10.013 trillion as against its opening value of N10.241 trillion, representing a loss of N228 billion or 2.22 per cent.

    The All Share Index (ASI), the common value-based index that tracks prices of all quoted equities, shrank to 29,214.13 points as against its opening index of 29,878.33 points, a day-on-day decline of 2.22 per cent.

    China’s benchmark index has now lost all of its yearly gains after a relentless ascent that saw its valuation rise to record levels earlier this year. Asian markets crashed on the news, with Japan’s Nikkei closing down 4.5 per cent and entering official “correction” territory. Hong Kong’s Hang Seng sanki 5.2 per cent, its steepest sell-off in 30 years.

    Emerging markets, most exposed to a waning Chinese economy, saw their currencies continue an abysmal summer rout. Russia’s rouble fell to an all-time low of 70.74 to the dollar, despite desperate attempts by the Kremlin to prop up its value.

    Contagion quickly spread west, decimating European indices, which all suffered record post-crisis losses. The FTSE 100 dropped 4.7 per cent, wiping £74 billion off its market capitalisation and capping its worst one-day performance since March 2009.

    The index staged a minor rebound, having lost more than £55 billion in the first two hours of morning trading. Britain’s benchmark index has now collapsed by 17 per cent since hitting a high of 7,104 in April and is slipping towards official bear market territory, defined as a 20 per cent decline from its peak.

    Europe’s FTSE EuroFirst300 stocks endured a 5.6pc loss that erased €450bn from the continent’s biggest companies. Italian stocks led the falls, down 6pc, while France’s CAC 40 suffered a 5.4pc decline, closing at 4383.46. Germany’s DAX also entered correction territory, bleeding 4.7pc.

    “Stock markets are falling apart at the seams,” said Jasper Lawler at CMC Markets.

    “There was one point today when there just seemed to be no buyers and markets just went into freefall.”

    Fears soon engulfed Wall Street, where the Dow Jones lost 1,000 points, minutes after the opening bell. Pre-market futures trading in the Dow and the S&P 500 had to be suspended as investors became embroiled in a manic sell-off. The Dow later rallied to fall by 2.6 per cent in New York’s afternoon trading.

    A key measure of US equity volatility, the CBOE Volatility Index, or VIX, shot above the 50 mark for the first time since 2009 before dropping back to 33 as US investors turned their focus back to domestic US issues.

    “With those markets closed, it’s now focused more on US fundamentals. The US economy remains relatively strong compared to others around the world,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

    The Dow Jones industrial average was down 346.07 points, or 2.10 percent, at 16,113.68. The Standard & Poor’s 500 Index was down 47.72 points, or 2.42 percent, at 1,923.17. The Nasdaq Composite Index was down 94.91 points, or 2.02 percent, at 4,611.13.

    Oil prices also recovered somewhat after plunging to six-and-a-half year lows. Safe-haven US government and German bonds, as well as the yen and the euro, rallied as currency concerns kicked in due to China’s recent currency devaluation.

    US crude was last down 3.7 per cent at about $38.95 a barrel after falling as low as $37.75 earlier in the day and Brent was off 4.2 percent at $43.57 after falling as low as $42.51 to take it under January’s lows for the first time. Worries about weaker demand from normally resource-hungry China added to global supply glut concerns.

    The S&P’s energy index was the weakest performer with a 2.9 per cent decline in afternoon trading.

    With serious doubts emerging about the likelihood of a US interest rate rise this year, the dollar was down 1.5 per cent against other major currencies after falling as much as 2.5 per cent earlier in the day.

    MSCI’s broadest index of Asia-Pacific shares outside Japan fell 5.4 per cent to a more than three-year low. Tokyo’s Nikkei ended down 4.6 per cent and Australian and Indonesian shares hit two-year troughs.

    London’s FTSE 100, with its large number of global miners and oil firms, ended down 4.7 per cent for its 10th straight decline – its worst run since 2003. The MSCI all world stock index was off three per cent.

     

  • Nigerian equities lose N124b in 19,143 deals

    Nigerian equities lose N124b in 19,143 deals

    Nigerian equities fell for four consecutive trading sessions and lost about N124 billion last week as the market continued to grope for macroeconomic direction.

    The two main common benchmark indices at the Nigerian Stock Exchange (NSE) indicated a week-on-week average decline of 1.08 per cent, worsening the negative sentiments that had dominated the market this month as investors await major economic decisions and appointments by the President Muhammadu Buhari administration.

    Average year-to-date return at the stock market worsened to -4.04 per cent at the weekend, driven by a month-to-date return of -3.07 per cent in June.

    Cross-sectoral review indicated that most stocks are trading in the negative with the negative sentiments more pronounced in the oil and gas sector and the consumer goods sector, two sectors that had suffered from transitional leakages.

    The NSE 30 Index, which tracks the 30 most capitalized companies, recorded a year-to-date return of -2.91 per cent. The NSE Consumer Goods Index, which tracks large manufacturers of fast moving consuming goods, recorded average year-to-date return of -6.75 per cent. The NSE Lotus Islamic Index, which tracks Islamic compliant ethical stocks, recorded average loss of 2.39 per cent. NSE Insurance Index recorded average loss of -2.47 per cent while the NSE Oil and Gas Index opened today with average year-to-date loss of 6.19 per cent. Meanwhile, the NSE Banking Index, which tracks the most active sector, carries a positive return of 5.26 per cent while the NSE Industrial Goods Index posted average return of 3.64 per cent.

    Total turnover last week stood at 1.28 billion shares worth N31.3 billion in 19,143 deals compared with a total of 1.55 billion shares valued at N17.53 billion that were traded in 17,785 deals two weeks ago. The bank-led financial services sector remained the most active with a turnover 976.65 million shares valued at N11.27 billion in 10,121 deals; representing 76.2 per cent and 36 per cent of the total equity turnover volume and value respectively. The consumer goods sector occupied a distant second on the activity chart with a turnover of 114.14 million shares worth N7.98 million in 3,467 deals. The oil and gas sector placed third with a turnover of 70.87 million shares worth N10.49 billion in 2,016 deals.

    The trio of Access Bank Plc, Zenith International Bank Plc and Guaranty Trust Bank Plc were the most active stocks jointly accounting for 486.911 million shares worth N7.69 billion in 3,963 deals, representing 37.99 per cent and 24.56 per cent of the total equity turnover volume and value respectively.

    Further share price analysis indicated that 28 equities appreciated during the week while 46 equities depreciated. A total of 119 equities remained unchanged.

     

  • Nigerian equities gain N1tr on N103.5b turnover in April

    Nigerian equities recorded average gain of more than 9.3 per cent in April as turnover as the Nigerian Stock Exchange (NSE) swelled up to N103.5 billion within the period.

    Month-on-month market analysis showed that the stock market built on the positive momentum that trailed the successful conduct of the presidential and national assembly elections on March 28 and gubernatorial and state assemblies’ elections on April 11 to regain its upbeat.

    Aggregate market value of all quoted equities, which opened April at N10.718 trillion, closed the month at N11.787 trillion, representing a gain of N1.07 trillion, about 9.97 per cent. The benchmark index for the Nigerian stock market, the All Share Index (ASI), also indicated a month-on-month average gain of 9.3 per cent during the period, rising from the month’s opening index of 31, 744.82 points to close at 34,708.11 points. The ASI, a value-based index, tracks the prices of all quoted companies and it is thus directly related to market sentiments.

    Aggregate market turnover during the period stood at 10.72 billion shares valued at N103.54 billion in 107,932 deals. The market remained mainly equities market.  Quoted equities accounted for 10.718 billion shares valued at N103.429 billion in 107,787 deals. Exchange Traded Funds, which has four securities, contributed 3.39 million units valued at N81.5 million in 127 deals. The retail bond market also recorded modest turnover of 26,290 units valued at N28.57 million in 18 deals.

    Financial services sector also remained the main driver of activities at the stock market. Financial stocks accounted for a turnover of 8.55 billion shares worth N63.55 billion in 61,640 deals. This represented about 80 per cent and 61 per cent of aggregate turnover volume and value respectively.

    Standard Alliance Insurance was the most active stock, in terms of volume, with a turnover of 1.15 billion shares worth N573.08 million in 59 deals. Diamond Bank Plc trailed with a turnover of 1.13 billion shares worth N4.96 billion in 1,355 deals. United Bank for Africa (UBA) placed third on the monthly activity chart with 983.43 million shares worth N4.92 billion in 7,484 deals. Transnational Corporation of Nigeria recorded a turnover of 901.56 million shares worth N2.93 billion in 5,014 deals. FBN Holdings ranked fifth on the activity chart with a turnover of 855.33 million shares worth N8.25 billion in 13,852 deals. Zenith Bank followed with a turnover of 638.59 million shares worth N14.88 billion in 6,453 deals while FCMB Group recorded a turnover of 622.06 million shares valued at N2.04 billion in 3,129 deals to place seventh on the activity chart.

    The bullish rally in April helped the market to a positive, though modest, year-to-date four-month gain of 0.15 per cent. During the last trading week of the month, Nigerian equities recorded modest average gain of 0.64 per cent last week, equivalent to about N75.2 billion.

    Last week’s positive market position was largely due to gains by some highly capitalised companies. With 31 advancers to 41 decliners and declines recorded by key indices in the banking and oil and gas sectors, the market was buoyed by gains in the large-cap industrial domestic and fast moving consumer goods sectors.

    The NSE Banking Index, Nigeria’s most active sector, declined by 1.69 per cent while the NSE Insurance Index dropped by 2.34 per cent. With the re-emergence of queue at petrol stations, the NSE Oil and Gas Index saw a steep decline of 6.87 per cent. However, these losses were counterbalanced by gains recorded by the large-cap stocks. The NSE 30 Index, which tracks the 30 largest stocks, inched up by 0.16 per cent. The NSE Consumer Goods Index rose by 0.65 per cent while the NSE Industrial Goods Index, which included Dangote Cement, Nigeria’s most capitalised stock, trended upward by 2.79 per cent.

    Total turnover during the four-day trading session stood at 1.17 billion shares worth N11.96 billion in 17,769 deals. In the previous week, total turnover was 2.06 billion shares valued at N17.18 billion in 25,577 deals. The financial services sector remained the dominant sector with a turnover of 796.23 million shares valued at N6.20 billion in 10,081 deals; representing 68.13 per cent and 51.83 per cent of the total equity turnover volume and value respectively. The conglomerates sector followed with a turnover of 239.23 million shares worth N862.50 million in 1,157 deals. The consumer goods sector placed third with a turnover of 46.98 million shares worth N2.435 billion in 2,811 deals.

    The trio of Transnational Corporation of Nigeria Plc, United Bank for Africa (UBA) Plc and Access Bank Plc were the most active stocks, jointly accounting for 460.34 million shares worth N1.98 billion in 2,903 deals, representing 39.39 per cent and 16.55 per cent of the total equity turnover volume and value respectively.

    Most analysts attributed the performance in April to the renewed optimism occasioned by the successful conduct of the general elections. Major foreign and Nigerian investment firms had placed “buy” on several Nigerian stocks, a reference to the reduction in the political risk and the attractiveness of Nigerian equities, most of which had been undervalued by sustained depreciation over the past 15 months.

    Exotix, a global investment firm, described the successful conduct of the election and the emergence of Buhari as “unprecedented positive”.

    “A broadly effective voter card system, largely peaceful voting days, generally orderly announcement of results, concession of defeat and most importantly, the win for the opposition candidate, comprise a remarkable, unprecedented and positive presidential election in Nigeria,” Exotix stated.

    The firm noted that some macro level concerns which have driven Nigeria to underperform all major frontier markets have thus been removed. Exotix subsequently raised its recommendation for Nigerian stocks, especially banking and consumer goods companies.

    Analysts at Exotix noted that the political transition enhanced the potential of Nigerian equities among the frontier markets.

    “We have advocated for some time a shift in favour of Nigeria for frontier portfolios, arguing that the litany of concerns are in such plain view that the capacity for negative surprise is low and that these concerns are arguably largely reflected in a trailing price to book multiple towards the low end of its five-year range,” Exotix stated in a review.

    Also, analysts at Sterling Capital Markets said the largely peaceful conduct of the presidential elections set the market on the positive streak.

    “We expect the positive sentiment to continue as investors’ confidence returns to the market, even as the uncertainties in the polity appear doused,” Afrinvest Securities stated on the heels of the general elections.

    Analysts at GTI Securities said the general elections restored confidence in the Nigerian capital market as investors hurry to take position of cheap stocks.

    Amidst the anxieties that characterized the pre-election period, Nigerian equities had lost N1.63 trillion in January 2015. However, analysts at Vetiva Capital Management Limited braced up the investing public with a projection that Nigerian equities may earn an average double-digit return of about 16 per cent this year, in spite of the bearishness that started the year.

    Vetiva, in its outlook for 2015, stated that Nigerian equities have been significantly undervalued by the previous bearishness and would witness considerable recovery this year.

    Analysts at Vetiva noted that while the performance of the equities market will correlate with the global oil price trend, a mid-point analysis suggests that Nigerian equities can make potential average return of 16 per cent this year.

    Analysts pointed out that while valuations appear relatively cheap, sustained pressure on oil prices will likely continue to constrain investor re-entry into equities. Analysts thus anchored their 2015 return expectation for the All Share Index (ASI) of the NSE on oil price performance in the year.

    According to analysts, using 16 year data, a correlation factor of 72 per cent between Brent crude prices and the ASI was established. The assumption of Brent crude recovering to $70/bbl by year end indicates a 22 per cent recovery from 2014 end position; thus, factoring in 72 per cent correlation suggests that amidst much volatility, the ASI holds a potential 16 per cent return in 2015 to 40,201.56 points.

    “Our scenario analysis indicate that at $100/bbl level, ASI would hold a potential 54 per cent return for the year, whilst at $20/bbl price level, the return potential is -47 per cent. Given that the market selloff in the final quarter of 2014 was broad based, we believe a market recovery in 2015 will equally be broad based,” Vetiva stated.

    “We expect a moderate recovery in oil prices in 2015, driven largely by a marginal improvement in global economic growth, which should support demand, but will still be overshadowed by supply, stemming any sustained rise in the oil price. Our sense, however, is that the prospects of a sustained recovery will be based on whether price weakness triggers substantial reduction in non-OPEC supply and/or a cut in OPEC production either at the June 2015 meeting or earlier. The former could be influenced by the risk of delayed shale projects if prices stay well below projected break-even for too long, and the latter by the risks of running large budget deficits and lower growth prospects resulting from depressed oil revenues. Other risks that could trigger an uptrend in oil prices would be: supply disruptions in the Middle East, an aggressive build-up in China’s Strategic Petroleum Reserves (SPR), and a more intense winter in the US These events however need to be significant enough to alter oil market fundamentals by tightening supply in order to sustain the oil price rebound. In our core scenario, we expect the Brent to gradually rise from the current levels to US$60/bbl by first half of 2015, and up to US$70/bbl levels by year-end 2015,” Vetiva noted.

     

     

     

     

     

     

  • Nigerian equities gain N1.82tr on Buhari euphoria

    Nigerian equities gain N1.82tr on Buhari euphoria

    The negative sentiments and depreciation haunting Nigerian equities gave way to optimism and scramble for quoted equities as the successful conduct of the presidential election and emergence of General Muhammadu Buhari (rtd) as president-elect triggered a massive bullish rally that topped the market with about N1.82 trillion.

    As indications emerged on Monday that the March 28 general elections were largely peaceful and credible, and the opposition candidate of the All Progressives Congress (APC) was leading, investors upped demand for Nigerian equities. Quoted equities’ capitalisation, which opened the week at N10.319 trillion, closed Monday at N10.494 trillion. The eventual announcement of Buhari as the president-elect and the concession of defeat by President Goodluck Jonathan spurred the bullish rally.

    Market data released by the Nigerian Stock Exchange (NSE) showed that last week saw the largest gain by Nigerian equities this year. Nigerian stock market is dominated by foreign investors, who account for almost two-thirds of total transactions. Buhari had built his campaign on resolution of three core issues of corruption, insecurity and economic underdevelopment.

    Aggregate market value of all quoted equities closed the four-day trading session last week at N12.135 trillion as against the week’s opening value of N10.319 trillion, representing an increase of N1.82 trillion. The benchmark index for the Nigerian stock market, the All Share Index (ASI), also jumped by almost six steps to close at 35,728.12 points as against its opening index of 30,562.93 points. The ASI, a value-based index, tracks the prices of all quoted companies and it is thus directly related to market sentiments.

    The stock market sustained consecutive upswing, rising from N10.494 trillion on Monday to N10.718 trillion on Tuesday and N11.621 trillion and N12.135 trillion on Wednesday and Thursday respectively.  The market performance was driven by increased demand for equities as turnover rose consecutively during the four trading sessions. Investors staked N1.84 billion on 196.26 million shares in 3,638 deals on Monday and increased this to N5.05 billion for 379.45 million shares in 4,138 deals on Tuesday. By Wednesday, turnover stood at N10.94 billion for 881.58 million shares in 4,611 deals. Turnover peaked at N18.75 billion on 1.17 billion shares in 9,006 deals on Thursday. Friday was declared a public holiday in commemoration of Good Friday.

    Major foreign and Nigerian investment firms placed “buy” on several Nigerian stocks, a reference to the reduction in the political risk and the attractiveness of Nigerian equities, most of which had been undervalued by sustained depreciation over the past 15 months. Exotix, a global investment firm, described the successful conduct of the election and the emergence of Buhari as “unprecedented positive”.

    “A broadly effective voter card system, largely peaceful voting days, generally orderly announcement of results, concession of defeat and most importantly, the win for the opposition candidate, comprise a remarkable, unprecedented and positive presidential election in Nigeria,” Exotix stated.

    The firm noted that some macro level concerns which have driven Nigeria to underperform all major frontier markets have thus been removed. Exotix subsequently raised its recommendation for Nigerian stocks, especially banking and consumer goods companies.

    The renewed optimism helped the Nigerian market to reverse its dragging negative average-year-to-date return to positive, with modest average year-to-date gain of 3.09 per cent. All key indices at the NSE showed widespread positive sentiments, with most equities recording their highest gains so far this year. While the ASI indicated average week-on-week gain of 16.90 per cent, the NSE 30 Index, which tracks the 30 most capitalised stocks, indicated higher weekly gain of 17.91 per cent. The NSE Banking Index recorded the highest gain of 23.97 per cent, reflecting the scramble for banking stocks. The NSE Oil and Gas Index, NSE Industrial Goods Index, NSE Consumer Goods Index and NSE Insurance Index recorded average weekly gain of 16.42 per cent, 13.62 per cent, 15.14 per cent and 3.46 per cent respectively. The NSE Lotus Islamic Index, which tracks ethical stocks on the basis of Islamic rules, also rose by 14.30 per cent.

    Price analysis showed that 72 stocks appreciated during the week as against six stocks that depreciated. Several equities rose by almost one –third of their share price. Fidelity Bank appreciated by 38 per cent to close at N2.07. Nigerian Aviation Handling Company rose by 33.9 per cent to close at N6.75. Zenith Bank appreciated by 32.5 per cent to N25.05. Oando rose by 31.3 per cent to N17.60. Guaranty Trust Bank added 30.87 per cent to close at N31.88 while United Bank for Africa rose by 29.8 per cent to close at N4.92 per share.

    Altogether, turnover within the four days surged above average to 2.63 billion shares worth N36.58 billion in 21, 393 deals. The financial sector, driven by banking stocks, remained the dominant sector with a turnover of 2.06 billion shares valued at N21.06 billion traded in 12,133 deals; representing 78.1 per cent and 57.6 per cent of the total turnover volume and value respectively.

    The conglomerates sector was the second most active sector with a turnover of 178.25 million shares worth N2.352 billion in 1,493 deals while the consumer goods sector placed third with a turnover of 118.96 million shares worth N5.59 billion in 2,816 deals.

    The trio of FBN Holdings Plc, Guaranty Trust Bank Plc and Access Bank Plc were the most active stocks as they jointly accounted for 834.17 million shares worth N12.16 billion in 5,089 deals, representing 31.7 per cent and 33.3 per cent of the total turnover volume and value respectively.

    Market analysts said the bullish rally might help Nigeria to reverse its negative foreign portfolio investment (FPI) position. The latest FPI report by the NSE had indicated that there was “significant increase in foreign portfolio investment outflow”. The report showed that nearly three-quarters of the transactions on the Nigerian stock market were done by foreign investors during the period, highlighting the dominant negative trend orchestrated by the foreign divestments.

    The report, based on the latest available data for the period ended February 2015, showed that foreign portfolio investment outlook had so far been negative, with year-to-date deficit of more than N32 billion.

    According to the NSE, foreign outflows totaled N81.60 billion in February 2015 as against inflow of N52.35 billion, indicating a significant increase on the downtrend that started the year when foreign portfolio outflow was N51.08 billion against inflow of N48.03 billion.

    Year-to-date, total foreign inflow stood at N100.38 billion compared with outflow of N132.68 billion, representing net deficit of N32.3 billion. The report had underlined concerns that foreign investors were downsizing their portfolios. Nigeria recorded negative net foreign portfolio position of N154.14 billion in 2014 as against a positive net position of a modest N20.48 billion in 2013.

    The latest report also showed continued dominance of the foreign investors in the Nigerian market with foreign transactions accounting for 72.61 per cent of total transactions in February compared with 27.39 per cent contributed by domestic investors. Foreign investors had contributed 52.24 per cent while Nigerian investors accounted for 47.76 per cent in January. Altogether, the proportion of foreign transactions to domestic transactions so far this year stood at 62.28 per cent and 37.72 per cent respectively.

    The NSE report is generally regarded as a credible gauge of foreign portfolio investments in Nigeria as it coordinates data from nearly all active investment bankers and stockbrokers. Nigeria presently operates a mono stock exchange, which makes the NSE the sole gateway to the nation’s stock market and the NSE’s benchmark indices, the country indices for Nigeria.

    The NSE report used two key indicators-inflow and outflow, to gauge foreign investors’ mood and participation in the stock market as a barometer for the economy. Foreign portfolio investment outflow includes sales transactions or liquidation of equity portfolio investments through the stock market while inflow includes purchase transactions on the NSE.

    The 12-month foreign portfolio investment report for 2014 had shown that foreign portfolio outflow was N846.53 billion as against inflow of N692.39 billion in 2014, representing a net deficit of N154.14 billion. In 2013, total foreign inflow stood at N531.26 trillion compared with outflow of N510.78 trillion, leaving a positive balance of N20.48 billion.

    The report showed a notable spike in foreign transactions, although the negative colouration indicated that the propensity was towards divestment rather than investment. Total foreign transactions rose by 52.5 per cent to N1.54 trillion in 2014 as against N1.01 trillion in 2013.

     

     

     

  • Electoral risk shaves off N462b from Nigerian equities

    Anxieties over the March 28 presidential and national assembly elections pervaded the stock market last week as investors scrambled to lock in cash and realign their portfolios. Investors discountenanced substantial undervaluation of most quoted equities and the trickles of full-year audited results and dividend recommendations.

    With nearly five decliners for every advancer, Nigerian equities were overwhelmed by the downtrend orchestrated by inflow of unrestricted sale orders, especially from foreign investors who were anxious about the outcome of the general elections.

    Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) dropped by N462 billion to close the week at N9.789 trillion as against its opening value of N10.251 trillion for the week. The benchmark index for the Nigerian stock market, the All Share Index (ASI)- a value-based composite index that tracks prices of all quoted equities, indicated a week-on-week decline of 4.51 per cent to close the week at 29,334.23 points. The ASI had opened the week at 30,719.36 points.

    All key value-based indices at the NSE indicated widespread bearish sentiments with additional risk of assets deterioration fuelling faster decline in the banking sector. The NSE 30 Index, a large-cap index that tracks the 30 most capitalized stocks on the NSE, indicated average weekly decline of 5.58 per cent. The NSE Banking Index recorded the highest loss of 11.77 per cent. The NSE Oil and Gas Index declined by 5.08 per cent while the NSE Insurance Index, NSE Consumer Goods Index and NSE Industrial Goods Index indicated average week-on-week loss of 0.25 per cent, 2.67 per cent and 2.53 per cent respectively. The NSE Lotus Islamic Index, which tracks Shari’ah –compliant stocks, also depreciated by 2.68 per cent.

    The downtrend further worsened the negative overall market situation at the stock market. Average year-to-date return closed weekend at -15.36 per cent, implying greater losses for investors as latest inflation rate showed increase from 8.2 per cent in January to 8.4 per cent in February.

    There were 11 gainers against 53 losers last week. Also, some 132 stocks, mostly stunted insurance stocks and other long-time penny stocks, closed flat. Africa Prudential Registrars suffered the highest loss of 22.58 per cent to close at N2.40 per share. Zenith Bank followed with a drop of 19.95 per cent to close at N16.49. Dangote Flour Mills dropped by 17.85 per cent to close at N2.90. Diamond Bank depreciated by 14.82 per cent to close at N3.62 while Fidelity Bank declined by 14.57 per cent to close at N1.29 per share.

    Total turnover stood at 1.38 billion shares worth N12.05 billion in 16,877 deals. Financial services sector remained the most active with a turnover of 1.23 billion shares valued at N7.18 billion traded in 10,743 deals. This represented 88.9 per cent of total turnover.  Conglomerates sector staged a distant second with a turnover of 61.57 million shares worth N187.60 million in 814 deals while the consumer goods sector placed third with a turnover of 49.20 million shares worth N3.2 billion in 2,450 deals.

    The trio of Diamond Bank, Access Bank and FCMB Group were the most active stocks, accounting for 550.74 million shares worth N2.42 billion in 1,500 deals, representing 39.8 per cent and 20.1 per cent of the total turnover volume and value respectively.

    Also, 105,162 units of Exchange Traded Products (ETPs) valued at N1.504 million were traded in 20 deals during the week.

    The performance of the Nigerian market contrasted sharply with the predominantly bullish mood of the global markets. In the emerging markets, China Shanghai Composite Index indicated a positive return of 7.2 per cent last week. The Brazilian IBOVESPA rose by 6.1 per cent. In London, the United Kingdom FTSE indicated a week-on-week gain of 3.3 per cent while the United States’ key indices, S & P 500 and NASDAQ appreciated by 2.4 per cent and 3.2 per cent respectively.

    Analysts attributed the negative performance of the Nigerian stock market to anxieties over the forthcoming general elections.

    “While the bearish trading in the market within the past two weeks has further led to increased upside potential for equities, investors’ apprehension as the general elections approaches next week remained the only downside risk,” analysts at Afrinvest Securities stated in their weekend review.

    Analysts said the market may remain on the downside this week as more investors seek to exit their positions. They however noted the increasing upside potential being created by the continuing undervaluation of equities.

    “Selling pressures have again returned as we approach the polls on 28 March as some foreign investors think the previously unthinkable. We may have had the thoughts but do not reach the dark conclusions. FBN Capital sees a one per cent loss for the index (ASI) over the full year,” analysts at FBN Capital stated.

     

  • Nigerian equities gain N198b in February

    Nigerian equities rode on the back of increased bargain-hunting and positioning for the new earnings seasons to record a modest gain of N198 billion in February. The bullish performance in the second month contrasted sharply with the downtrend that started the year when equities lost N1.63 trillion.

    Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) closed February at N10.045 trillion as against its opening value of N9.847 trillion for the month. This represented capital gains of N198 billion.

    The benchmark index at the stock market, the All Share Index (ASI)-a value-based common index that tracks prices of all shares on the NSE, closed the month at 30,103.81 points compared with its opening index of 29,562.07 points for the month. This indicated month-on-month average gain of 1.83 per cent.

    The upswing in February moderated the negative overall market situation as average year-to-date return improved to -13.14 per cent as against -14.70 per cent recorded in January.

    Analysis of the price movement trend showed widespread bullish sentiments during the month with investors showing greater interests in undervalued banking stocks. All the group indices at the NSE closed higher, with the exception of the consumer goods index which closed on the downside.

    The NSE 30 Index, which tracks the 30 most capitalised stocks at the stock market, recorded a month-on-month average return of 2.71 per cent. The NSE Banking Index recorded the highest gain of 10 per cent. It was followed by the NSE Oil and Gas Index, which rose by 8.13 per cent. The NSE Lotus Islamic Index, which tracks stocks that comply with Islamic jurisprudence, chalked up 7.53 per cent. The NSE Industrial Goods Index showed a modest appreciation of 0.46 per cent while the NSE Insurance Index inched up by 0.11 per cent.

    Total turnover during the month stood at 7.74 billion shares worth N92.25 billion in 84,768 deals. Financial services sector continued to dominate the market with a monthly turnover of 5.94 billion shares valued at N46.28 billion in 50,330 deals.

    However, the market remained in the negative over the two-month period. Average year-to-date return remained negative at -13.14 per cent, equivalent to a loss of N1.43 trillion over the two-month period. Nigerian equities had lost about N1.63 trillion in January, indicating average month-on-month loss of 14.70 per cent.

    Aggregate market value of all quoted equities on the NSE closed January at N9.847 trillion as against its opening value of N11.478 trillion for the month. This represented a loss of N1.63 trillion. The ASI closed January at 29,562.07 points, indicating a year-to-date return of -14.70 per cent. It had opened the year at 34,657.15 points

    The performance in the first month had raised the spectre of the grueling bearishness in 2014 when Nigerian equities ranked among the worst-performing stocks globally with average full-year decline of 16.14 per cent. Aggregate market value of all quoted equities closed 2014 at N11.478 trillion as against its opening value of N13.226 trillion for the year, indicating a loss of N1.75 trillion during the year.

    Most analysts expected the market to be dominated by bearish sentiments in the first half, but the pricing trend is expected to pick up in the second half.

    Managing director, Finawell Capital Limited, Mr. Tunde Oyekunle said the market situation would improve towards the end of the first quarter as the political risks subside.

    “Specifically, the economic and political risk of the country is currently too high for multinational and foreign investors. Factors influencing this includes dwindling price of Brent Crude Oil, uncertainty of the election transformation period, decreasing value of Naira and unfavourable foreign exchange. Local investors are further affected by the increased volatility of the market due to increase in movement band from daily allowable change of five per cent to 10 per cent,” Oyekunle said.

    Group head, research, Lead Capital Plc, Mr. Sadiq Waziri, attributed the earlier downtrend to the pump and dump technique adopted by most traders at the NSE.

    According to him, traders forced the market to close high towards the end of 2014 by pumping up the share prices in order to ensure that their portfolios closed the year on a good note.

    “They all adopted the same tactics to close the market high and dump in the New Year. Since everybody has the same strategy, the market will suffer for it,” Waziri pointed out.

    He, however, noted that the market situation will moderate after the elections, adding that investors should expect stronger performance after the swearing in of the newly elected government.

    Head, Research and Intelligence, BGL Plc, Mr. Femi Ademola, said the security challenges in the North East, which is scaring away many strategic investors and the continuous decline in oil price with its effect on exchange rate stability as well as political uncertainty had created a risk scenario that is making investors to be afraid to risk their money into the market.

    He, however, added that most of the identified problems are transitory and the market may ride over remaining concerns after the elections.

    Analysts at Vetiva Capital Management Limited however said investors in Nigerian equities may earn an average double-digit return of about 16 per cent this year, in spite of the bearishness that started the year.

    Vetiva, in its outlook for 2015, stated that Nigerian equities have been significantly undervalued by the previous bearishness and would witness considerable recovery this year.

    Analysts at Vetiva noted that while the performance of the equities market will correlate with the global oil price trend, a mid-point analysis suggests that Nigerian equities can make potential average return of 16 per cent this year.

    Analysts pointed out that while valuations appear relatively cheap, sustained pressure on oil prices will likely continue to constrain investor re-entry into equities. Analysts thus anchored their 2015 return expectation for the All Share Index (ASI) of the NSE on oil price performance in the year.

    According to analysts, using 16 year data, a correlation factor of 72 per cent between Brent crude prices and the ASI was established. The assumption of Brent crude recovering to $70/bbl by year end indicates a 22 per cent recovery from 2014 end position; thus, factoring in 72 per cent correlation suggests that amidst much volatility, the ASI holds a potential 16 per cent return in 2015 to 40,201.56 points.

    “Our scenario analysis indicate that at $100/bbl level, ASI would hold a potential 54 per cent return for the year, whilst at $20/bbl price level, the return potential is -47 per cent. Given that the market selloff in the final quarter of 2014 was broad based, we believe a market recovery in 2015 will equally be broad based,” Vetiva stated.

    “We expect a moderate recovery in oil prices in 2015, driven largely by a marginal improvement in global economic growth, which should support demand, but will still be overshadowed by supply, stemming any sustained rise in the oil price. Our sense, however, is that the prospects of a sustained recovery will be based on whether price weakness triggers substantial reduction in non-OPEC supply and/or a cut in OPEC production either at the June 2015 meeting or earlier. The former could be influenced by the risk of delayed shale projects if prices stay well below projected break-even for too long, and the latter by the risks of running large budget deficits and lower growth prospects resulting from depressed oil revenues. Other risks that could trigger an uptrend in oil prices would be: supply disruptions in the Middle East, an aggressive build-up in China’s Strategic Petroleum Reserves (SPR), and a more intense winter in the US These events however need to be significant enough to alter oil market fundamentals by tightening supply in order to sustain the oil price rebound. In our core scenario, we expect the Brent to gradually rise from the current levels to US$60/bbl by first half of 2015, and up to US$70/bbl levels by year-end 2015,” Vetiva noted.

  • Nigerian equities can make 16% average return in 2015, says Vetiva

    Investors in Nigerian equities may earn an average double-digit return of about 16 per cent this year, in spite of the bearishness that started the year.

    Quoted companies on the Nigerian Stock Exchange (NSE) have so far this year recorded negative average return of -16.22 per cent, according to the opening data this week. Nigerian equities had ranked among the worst-performing stocks globally in 2014 with average full-year decline of 16.14 per cent. Aggregate market value of all quoted equities closed 2014 at N13.226 trillion as against its opening value of N11.477 trillion for the year, indicating a loss of N1.75 trillion during the year.

    Leading investment and finance company, Vetiva Capital Management Limited (Vetiva), stated that Nigerian equities have been significantly undervalued by the previous bearishness and would witness considerable recovery this year.

    Analysts at Vetiva noted that while the performance of the equities market will correlate with the global oil price trend, a mid-point analysis suggests that Nigerian equities can make potential average return of 16 per cent this year.

    Analysts pointed out that while valuations appear relatively cheap, sustained pressure on oil prices will likely continue to constrain investor re-entry into equities. Analysts thus anchored their 2015 return expectation for the All Share Index (ASI) of the NSE on oil price performance in the year.

    According to analysts, using 16 year data, a correlation factor of 72 per cent between Brent crude prices and the ASI was established. The assumption of Brent crude recovering to $70/bbl by year end indicates a 22 per cent recovery from 2014 end position; thus, factoring in 72 per cent correlation suggests that amidst much volatility, the ASI holds a potential 16 per cent return in 2015 to 40,201.56 points.

    “Our scenario analysis indicate that at $100/bbl level, ASI would hold a potential 54 per cent return for the year, whilst at $20/bbl price level, the return potential is -47 per cent. Given that the market selloff in the final quarter of 2014 was broad based, we believe a market recovery in 2015 will equally be broad based,” Vetiva stated.

    “We expect a moderate recovery in oil prices in 2015, driven largely by a marginal improvement in global economic growth, which should support demand, but will still be overshadowed by supply, stemming any sustained rise in the oil price. Our sense, however, is that the prospects of a sustained recovery will be based on whether price weakness triggers substantial reduction in non-OPEC supply and/or a cut in OPEC production either at the June 2015 meeting or earlier. The former could be influenced by the risk of delayed shale projects if prices stay well below projected break-even for too long, and the latter by the risks of running large budget deficits and lower growth prospects resulting from depressed oil revenues. Other risks that could trigger an uptrend in oil prices would be: supply disruptions in the Middle East, an aggressive build-up in China’s Strategic Petroleum Reserves (SPR), and a more intense winter in the US These events however need to be significant enough to alter oil market fundamentals by tightening supply in order to sustain the oil price rebound. In our core scenario, we expect the Brent to gradually rise from the current levels to US$60/bbl by first half of 2015, and up to US$70/bbl levels by year-end 2015,” Vetiva noted.

    The investment and finance firm outlined that analyses of key sectors on the NSE revealed tough operating conditions across board noting that while the banking sector is attractive with low valuations, banks would have to navigate a difficult operating environment decline in global oil prices. Banks’ exposure to the oil & gas sector has come under the spotlight with fears of possible loan default even as the oil & gas value chain account for the biggest share, an average 25 per cent of banks loan portfolios. However Vetiva indicated that average non-performing loans for the banking industry would remain under the regulatory ceiling of 5.0 per cent at 4.6 per cent in 2015.

    “Whilst we estimate gross earnings will grow marginally in 2015, we expect the pressure on efficiency to persist. Nonetheless, we forecast an average six per cent earnings growth for our coverage banks in 2015, driven by the low 2014 base for the top tier banks,” Vetiva noted.

    Analysts said the consumer goods sector will be challenged by further hits to consumer wallets amidst declining government spending. Already, the Federal Government has announced some austerity measures including a luxury tax on private jets and spirits, a generally more aggressive stance on the collection of taxes, with other measures expected to be announced during the course of 2015.

    According to analysts, the biggest risk to consumer spending is the probable complete removal of fuel subsidy after the February 2015 general elections given the events that followed the partial removal of fuel subsidy in 2012 and possible fallouts should oil prices rebound in the second half of the year. Other events that would contribute to pressured consumer wallets in 2015 include the hike in electricity tariffs under the Multi-Year Tariff Order and tariffs on car importation.

    “We expect cost of borrowings to inch up in line with the tighter credit environment with attendant impact on earnings performance of consumer goods manufacturers in 2015. We expect low valuations in the upstream oil and gas space to trigger a couple of mergers and acquisitions in 2015. Downstream operators will be net beneficiaries of the oil price decline as the all-in cost of refined products fall; we also expect that operators will enjoy wider margins on non-regulated products. We forecast aggregate earnings growth of 18 per cent for downstream majors, boosted by reduction in financing costs,” the 2015 outlook report by Vetiva stated.

    Analysts said macro headwinds will put a dampener on demand outlook for the industrial goods sector like cement and building construction, as government and private expenditure growth come under pressure. They nonetheless noted that the low 2014 base will provide modest room for growth as cement producers diversify energy supply risk.  Vetiva estimated a 10 per cent growth for cement consumption in 2015.

    On the fixed-income market, Vetiva expected 2015 to open to healthy domestic demand for fixed income securities given the strong and positive real returns on offer and flight to safety from equities by pension funds.

    Analysts noted that along with strong domestic demand and relatively attractive re-entry levels, there is room for compression in yields in the second half of 2015 as macros become more benign. They however added that risks to this outlook include a quicker than anticipated increase in the United States Fed funds rate which could incite market sell-off and a lower-for-longer oil price which could leave the economy in a twin-deficit situation.

    “In first half 2015, we expect the Monetary Policy Rate (MPR) will remain unchanged at 13 per cent but further tightening could come by raising the Cash Reserve Ratio (CRR) on private sector deposits to 25 per cent if conditions deteriorate further. By second half of 2015, based on our expectation of a recovery in oil prices, we think monetary policy could be slightly relaxed with 100 bps reduction in the MPR,” Vetiva stated.

    Analysts noted the macro background to the financial markets’ performance citing the February 14 elections and oil revenue as major determinants of the macro outlook.

    “Amidst a global backdrop of still fragile growth and multiyear low oil prices, Nigeria will hold crucial elections in February 2015 in what is expected to be the most keenly contested in the country’s nascent democracy. With oil revenues making up c.70 per cent of Government revenues and c.80 per cent of exports, low oil prices will no doubt challenge the Nigerian economy in 2015. Following from this, we expect growth to weaken to 5.5 per cent, driven by slower growth in net exports, government consumption expenditure and private household consumption expenditure amidst modest growth in investment demand,” Vetiva indicated.

    Analysts projected that inflation rate will average 8.8 per cent in 2015, higher than the average of 8.1 per cent recorded in 2014, largely reflecting pass-through effects of higher domestic prices via imports, following the devaluation of the Naira to Dollar

    Analysts expected further devaluation in Naira noting that Nigeria is also at a risk of running a current account deficit.

    “Taking into account the elevated risks to the naira, market uncertainty in the near term, and the risks of running a current account deficit, we forecast an interbank exchange rate of Naira to Dollar at N202/$ by end 2015, with the current account deficit of 0.81 per cent of GDP in 2015 as against surplus of 2.69 per cent in 2014,” Vetiva noted.

    The pace of world growth in 2014 was disappointing, particularly in the Eurozone, Japan, China and many other emerging economies. The United States (US) economy held the bright spot, driven by an improving labour market, a modest housing market recovery and rising capital expenditures.

    In 2015, Vetiva expects a modest improvement in global economic growth supported by central banks’ efforts at sustaining the fragile recovery. The recent International Monetary Fund (IMF) World Economic Outlook (WEO) estimates reflect this cautious optimism with 2015 global growth forecast of 3.8 per cent more upbeat than the 3.3 per cent recorded in 2014, albeit a downward revision from the 4.0 per cent forecast in the October WEO publication. Other global themes are likely to revolve around low global inflation, periods of volatility associated with rising US rates and low commodity prices.

    Analysts noted that the US economy is in a cyclical upturn and is one of the few economies expected to accelerate in 2015 on the back of an improving housing sector, strengthening household consumption growth, further growth in business investments and a narrowing fiscal deficit. Reflecting this optimism, the IMF had projected US GDP growth at 3.1 per cent in 2015 as 2.2 per cent in 2014 although the pace of expansion could be tempered by slower growth in other regions, considering that projections for major trade partners such as Japan and China are modest at 0.8 per cent and 7.1 per cent respectively compared to 1.0 per cent and 7.4 per cent in 2014.

    “Following the completion of the asset purchase program in 2014 and recovery in the US economy, the question is – when will the Federal Reserve raise rates? The minutes of the recent FOMC meetings tells us that this depends on the pace of recovery in the labour market and the quickening of inflation. Market expectations are that the Fed will start tightening mid-2015 but only at a gradual pace. Overall, this points to lower global liquidity although we expect that monetary tightening in the US will be somewhat offset by expansive monetary policy in the Eurozone and Japan as these economies battle deflation,” analysts noted.

    The Benchmark Brent Crude oil price declined 48 per cent in 2014 to multi year low of $57.33/bbl. This sharp decline which happened in the second half of the year was largely on the back of oversupply triggered by an increase in non-OPEC production-US, Canada and an unexpected increase in OPEC production-Libya, Iraq. Other factors were the modest growth in emerging economies which softened demand and strengthening of the US dollar.

     

  • Analysts optimistic on Nigerian equities

    Nigerian equities may start a modest rebound towards the end of this quarter and thereafter enter a major recovery phase as investors begin to see clearer picture of the macroeconomic and political direction.

    Most analysts said they expected the stock market to start a modest recovery towards the end of this quarter after the presidential and National Assembly elections.

    Analysts said the current downtrend at the stock market was due mainly to anxieties over the political transition and the clouded outlook for fiscal and monetary directions. These concerns are however expected to reduce after the elections.

    Aggregate market value of all quoted companies on the Nigerian Stock Exchange (NSE) dropped by N1.498 trillion to close last week at a low of N9.980 trillion as against its opening value of N11.478 trillion. The benchmark index at the NSE, the All Share Index (ASI)- a value-based index that tracks prices of all quoted equities and also doubles as country index for Nigeria, indicated a week-on-week average decline of 13.05 per cent. The ASI dropped from its opening index of 34,657.15 points to close at 30,143.02 points.

    The performance in the first week of the year raised the spectre of the previous year. Nigerian equities ranked among the worst-performing stocks globally in 2014 with average full-year decline of 16.14 per cent. Aggregate market value of all quoted equities closed 2014 at N13.226 trillion as against its opening value of N11.477 trillion for the year, indicating a loss of N1.75 trillion during the year.

    Managing director, Finawell Capital Limited, Mr. Tunde Oyekunle said the bearish state of the market is due to the current state of the Nigerian economy.

    “Specifically, the economic and political risk of the country is currently too high for multinational and foreign investors. Factors influencing this includes dwindling price of Brent Crude Oil, uncertainly of the election transformation period, decreasing value of Naira and unfavourable foreign exchange. Local investors are further affected by the increased volatility of the market due to increase in movement band from daily allowable change of five per cent to 10 per cent,” Oyekunle said.

    He said the market situation would improve towards the end of the first quarter as the political risks subside.

    Group head, research, Lead Capital Plc, Mr. Sadiq Waziri, attributed the current downtrend to the pump and dump technique adopted by most traders at the NSE.

    According to him, traders forced the market to close high towards the end of 2014 by pumping up the share prices in order to ensure that their portfolios closed the year on a good note.

    “They all adopted the same tactics to close the market high and dump in the New Year. Since everybody has the same strategy, the market will suffer for it,” Waziri pointed out.

    He however noted that the market situation will moderate after the February elections, adding that investors should expect stronger performance after the swearing in of the newly elected government.

    Head, research and intelligence, BGL Plc, Mr. Femi Ademola, said the security challenges in the North East, which is scaring away many strategic investors and the continuous decline in oil price with its effect on exchange rate stability as well as political uncertainty had created a risk scenario that is making investors to be afraid to risk their money into the market.

    According to him, most investors would now rather sell down and keep their assets in cash and other more liquid form than staking on quoted equities.

    He outlined that the crude oil price outlook is not favourable to the country in the short term since this will affect Nigeria’s foreign earnings capacity and may lead to further devaluation.

    “Since we adopt a semi-fixed exchange regime, using our foreign reserve to defend the currency, the reduced earnings capacity of country will continue to put pressure on the exchange rate and may necessitate devaluation in the short term. Devaluation would lead to losses on existing investment by foreign investors in the country; hence they would rather wait until after the devaluation before they commence investment,” Ademola said.

    He however added that most of the identified problems are transitory and the market may ride over remaining concerns after the February elections.

    “The elections are five weeks away and while some skirmishes are likely, it is expected to be largely free and fair with competing parties expected to handle the fall out in matured way and seek legal redress where necessary. Once the election is favourably settled, the security challenges are expectedly to be dealt with swiftly by whoever wins the election. This is because while a new government would like to score political points by quickly resolving the problem, the continuing administration would be more assertive to combat the menace given the new mandate that it has,” Ademola said.

     

     

  • Nigerian equities open New Year with N241b loss

    Nigerian equities open New Year with N241b loss

    Quoted equities on the Nigerian Stock Exchange (NSE) opened this year with a strong bearishness, raising the spectre of the previous year when equities recorded double-digit loss.

    Equities lost N241 billion on 3,807 deals in the first trading session of 2015 with most indices at the stock market indicating widespread sell pressure. Aggregate market value of all quoted equities closed yesterday at N11.237 trillion as against its opening value of N11.478 trillion.

    The All Share Index (ASI), the benchmark index at the NSE, declined by 2.1 per cent to close at 33,943.29 points as against its opening index of 34,657.15 points. With the exception of the NSE oil and gas index, which rose by 0.42 per cent to close at 381.73 basis points, all other major market indices closed on the negative. The NSE 30 Index, which measures the performance of the 30 most capitalised companies on the NSE, fell by 1.72 per cent to close at 1,536.30 basis points; the NSE Banking Index declined by 1.28 per cent to 346.88 basis points, while the NSE Insurance Index was down by 0.60 per cent to 148.74 basis points. Also, the NSE Lotus Islamic Index dipped by 2.65 per cent to close at 2,184.46 basis points, while the NSE Industrial Index closed with a loss of 2.82 per cent at 2,097.16.

    Large-cap stocks led the bearish trading. Seplat Petroleum Development Company recorded the highes loss of N19.51 to close at N351.50. Nestle Nigeria dropped by N16.15 to close at N995.60. Dangote Cement declined by N10 to close at N190. Julius Berger Nigeria lost N3.03 to close at N57.63. Guinness Nigeria dropped by N2.85 to close at N165.30 while GlaxoSmithKline Consumer Nigeria lost N2.59 to close at N47.41.

    Analysts at Afrinvest Securities said the bearish opening was in line with expectation as investors sought to take profit on the earlier rebound.

    “Broadly, we expect the market will trade sideways with an overall bearish tone as contrarian investors continue to position in cheap value counters even as we expect simultaneous profit taking,” analysts stated.

    Total turnover yesterday stood at 299.41 million shares valued at N5.46 billion in 3,807 deals. Ecobank Transnational Incorporated was the most active stock with a turnover of 97.39 million shares worth N1.80 billion in 72 deals.

  • Nigerian equities lose N123b as investors stake N53b

    Nigerian equities lose N123b as investors stake N53b

    Nigerian equities lost N123 billion in the first week of September, sustaining a downtrend that characterized the last two months.

    Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) declined from its week’s opening value of N13.714 trillion to close the week at N13.591 trillion, representing a loss of N123 billion.

    The composite index, the All Share Index (ASI), which tracks prices of all quoted equities, declined week-on-week from 41,532.31 points to close at 41,160.62 points, representing an average decline of 0.89 per cent.

    Quoted equities had lost N186 billion in August, N58 billion more than N128 billion lost in July. Average loss in August stood at 1.34 per cent compared with average loss of 0.91 per cent recorded in July.

    The bearishness last week dragged the stock market to the negative with average year-to-date return of -0.41 per cent. Twenty eight equities appreciated as against 54 equities that depreciated.

    Total turnover last week stood at 3.28 billion shares worth N52.81 billion in 25,592 deals as against a total of 1.34 billion shares valued at N16.09 billion that were traded in 22,481 deals in the previous week.

    The financial services sector was the most active with 2.74 billion shares valued at N41.89 billion traded in 13,170 deals; representing 83.6 per cent of the total equity turnover volume. Conglomerates sector followed with a turnover of 239.06 million shares worth 1.85 billion in 2,886 deals. Oil and gas sector placed third with a turnover of 98.22 million shares worth N1.598 billion in 2,997 deals.

    The trio of Ecobank Transnational Incorporated Plc, Transnational Corporation of Nigeria Plc and Fidelity Bank Plc were the most active with 2.25 billion shares worth N37.82 billion in 3,400 deals, contributing 68.7 per cent to the total equity turnover volume.

    Also traded during the week were a total of 112,216 units of Exchange Traded Products (ETPs) valued at N2.475 million executed in 18 deals compared with a total of 40,845 units valued at N1.15 million traded in 21 deals penultimate week.