The Nation Newspaper

Tag: NSE

  • Investors hunt for penny stocks in tight market

    Investors hunt for penny stocks in tight market

    With relatively low dividend yield on highly capitalised stocks, investors appeared to be turning to low-priced stocks as the stock market dithered between profit-taking and bargain-hunting.

    Several low-priced stocks, otherwise known as penny stocks, traded at significant premium above market average last week, underlining the increased investors’ appetite for several low-priced stocks with potential for dividend-payment.

    Average gain by investors at the Nigerian Stock Exchange (NSE) stood at 0.58 per cent last week. Investors in low-priced stocks however recorded better bargains with many low-priced stocks closing with double-digit gains.

    Penny stocks dominated the top gainers’ list. Honeywell Flour Mills led the bullish stocks with a gain of 11.30 per cent to close at N3.94 per share. AG Leventis Nigeria followed with a gain of 10.49 per cent to close at N1.58. CourteVille Business Solutions rose by 9.84 per cent to close at 67 kobo. University Press returned 9.46 per cent to close at N4.05. RT Briscoe added 9.09 per cent to close at N1.20. Ikeja Hotel chalked up 7.02 per cent to close at 61 kobo while Vitafoam Nigeria’s share price rose by 5.0 per cent to N4.20. Meanwhile, three large-cap stocks made the top 10 gainers’ list, including Forte Oil, which rose by 10.14 per cent to close at N148.99; Access Bank that increased by 6.17 per cent to close at N8.26 and CAP, which added 5.96 per cent to close at N40 per share.

    The benchmark index at the NSE, the All Share Index (ASI), recorded a modest return of 0.58 per cent at 39,311.60 points as against its week’s opening index of 39,083.66 points. Aggregate market value of all quoted equities rose by N374 billion from N12.554 trillion to N12.928 trillion. The significant increase was partly due to the listing of SEPLAT Petroleum Development Company during the week. Seplat had on Monday listed about 543.28 million ordinary shares of 50 kobo each at N567 per share.

    While there were 42 decliners to 31 gainers, gains in the highly capitalised sectors boosted the overall market position. Sectoral indices for the dominant banking, oil and gas and industrial goods sectors closed on the upside. The NSE 30 Index, which tracks the 30 most capitalised stocks, recorded a week-on-week return of 0.34 per cent. The NSE Banking Index gained 1.14 per cent while the NSE Oil and Gas Index recorded the highest weekly return of 2.75 per cent. The NSE Industrial Goods Index recorded a weekly return of 1.46 per cent. The NSE Insurance Index indicated average return of 0.47 per cent. However, the NSE Consumer Goods Index depreciated by 0.76 per cent.

    Turnover during the four-day trading week stood at 1.53 billion shares worth N14.31 billion in 17,704 deals as against a total of 1.64 billion shares valued at N23.16 billion that were traded in 21,620 deals in the previous week. The market closed on Thursday. The government had declared Friday as public holiday in commemoration of Good Friday.

    Analysis of the transactions showed that the financial services sector remained the main driver of market activities. Financial services stocks accounted for 1.33 billion shares valued at N10.39 billion in 10,582 deals; representing 86.7 per cent of aggregate turnover volume.

    The conglomerates sector occupied a distant second on the activity chart with a turnover of 102.92 million shares worth N578.97 million in 1,198 deals. Consumer goods sector placed third with 28.98 million shares worth N1.73 billion in 2,218 deals.

    On stock by stock basis, the trio of United Bank for Africa Plc, UBA Capital Plc and Transnational Corporation of Nigeria Plc were the most active stocks. The three stocks accounted for 800.38 million shares worth N4.77 billion in 2,373 deals, contributing 52.3 per cent of total turnover volume.

     

     

  • NSE introduces new pricing model for large companies

    NSE introduces new pricing model for large companies

    The Nigerian Stock Exchange (NSE) has decided to replace the current single pricing methodology with a dual pricing methodology that allows variance in pricing according to the initial or subsisting price of a stock.

    The need for the new dual pricing methodology became evident last week, following the listing of the first upstream company on the stock market. The NSE recorded a milestone last week with the listing of the first upstream company, SEPLAT Petroleum Development Company Plc, an indigenous independent oil and gas company.

    The listing of Seplat activated the exploration and production subsector of the oil and gas sector and added N313 billion to the aggregate market value of quoted companies. About 543.3 million ordinary shares of 50 kobo each were listed at N576 per share.

    Manager, rules and interpretation, Nigerian Stock Exchange (NSE), Oluwatoyin Adenugba, said the listing of Seplat exposed a lacuna in Exchange’s current rule on pricing methodology.

    According to the NSE, the relevant rule on pricing, Article 100, does not set forth a pricing methodology for determining the price movement where a new security is priced above N100 at the time of listing.

    Adenugba said the NSE has then decided to take the most reasonable step in the interest of investors and the capital market by treating the newly listed Seplat as “Group B” securities.

    As a “Group B” security, a trade of 10,000 units will lead to a change in the published price of Seplat.

    Also, in order to provide for similar instances in the future, the Exchange shall seek amendment to the Article 100 of the Rules and Regulations Governing Dealing Members to include a clause on categorization of a new listing that is priced above N100 as a “Group B” stock.

    According to the proposed amendment, for purposes of calculating price movements and price limits, equity securities traded on the Exchange shall be classified as follows: “Group A” shall consist of equities with a primary market maker that are not classified in Group B; and “Group B” shall consist of equities with a primary market maker, that are priced above N100 per share for at least four of the last six months; or new security listings that are priced above N100 at the time of listing on the Exchange.

    With the amendment, the “Group A” stocks now include Dangote Cement, Nigerian Breweries, Nestle Nigeria, Seplat, Lafarge Cement Wapco Nigeria, Guinness Nigeria, Forte Oil, Total Nigeria and Mobil Oil Nigeria Plc.

     

  • Foreign investors hasten sale of Nigerian equities

    What did the foreign investors see that made them to double up on the sale of their Nigerian portfolios?

    This is the worrying question for the authorities at the Nigerian Stock Exchange (NSE) as latest official data on foreign portfolio investments indicated significant disproportionate increase in divestments and investments in stock market.

    The latest foreign portfolio investment (FPI) report by the NSE showed more than 100 per cent increase in sale transactions while there was also significant decline in buy transactions, illustrating the increasing negative foreign portfolio position in recent period.

    While the NSE had been silent on previous reports of foreign divestments, the current report drew attention to the unusual increase showed by the latest data.

    According to the report, there is need to note “the significant increase in foreign portfolio investment outflows in February compared to January and the same period last year. The outflows in February are about 107 per cent higher compared to January 2014 and about 183 per cent compared to February 2013”.

    The 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 latest report obtained at the weekend indicated for almost a kobo put in the Nigerian market in the period ended February 2014; more than three kobos were taken out. This underlined a worse divestment scenario compared with the previous month in 2014 and comparable period of 2013.

    The report proved that while foreign transactions have dominated the stock market in the recent period, these have mostly been on the divestment side rather than new investment. The report also provided the first empirical evidence of foreign investors’ reaction to the suspension of Mallam Sanusi Lamido Sanusi as the governor of the Central Bank of Nigeria (CBN), by President Goodluck Jonathan in February 2014.

    While total transactions at the NSE increased from N181.97 billion in January 2014 to N198.70 billion in February 2014, foreign outflows accounted for the increased tempo of activities and the higher proportion of foreign participation to local participation.

    Foreign portfolio outflows stood at N103.53 billion in February 2014 as against foreign inflows of N32.75 billion. These indicated that foreign investors accounted for 68.59 per cent of total transactions during the period.

    This contrasted sharply with the situation in similar earnings season of February 2013 when foreign investors had more inflows at N39.34 billion as against outflows of N36.63 billion.

    Total foreign outflow had stood at N50.14 billion in January 2014 as against inflow of N39.53 billion during the period, bringing total foreign transactions to N89.67 billion. In comparable period of January 2013, foreign inflow was higher at N40.96 billion against outflow of N20.50 billion.

    Year-to-date analysis showed that for every unit of investment, there have been two units of divestments so far this year. Total foreign portfolio inflows so far in 2014, according to the latest two-month report ended February 2014, stood at N72.28 billion compared with total foreign outflows of N153.67 billion.

    Recent reports have continued to highlight increased foreign participation, though negative. Foreign investors accounted for 49.28 per cent of total transaction value of N181.97 billion in January 2014 as against 36.89 per cent of total transactions of N166.60 billion in January 2013 and 48.91 per cent of total transactions of N142.24 billion in December 2013.

     

    Portfolio flow analysis in recent period had shown a consistent trading pattern in foreign transactions. While foreign investors flowed in more funds than they took out in the first half of 2013, they have since been taking more money out than they invested since the beginning of the second half of 2013.

    Month-on-month analysis showed that total foreign transactions closed December 2013 at N69.57 billion, consisting of inflow of N32.40 billion and outflow of N37.17 billion. Total foreign transactions rose to N88.89 billion in November, including inflow of N42.68 billion and outflow of N46.21 billion. These had closed October at N82.33 billion including inflow of N39.45 billion and outflow of N42.88 billion.

    In September, total foreign inflow was N26.14 billion as against outflow of N27.88 billion, bringing total foreign transactions to N54.02 billion. Total transactions at the stock market during the month stood at N108.19 billion, out of which domestic investors contributed N54.17 billion or 50.07 per cent.

    In August, foreign inflow had stood at N31.12 billion as against outflow of N39.76 billion. Total foreign transactions thus stood at N70.88 billion, 52.26 per cent of the total turnover of N135.63 billion recorded for the month.

    Foreign investors had took out nearly a double of every penny they invested in the Nigerian stock market in July, unusually high disparity between foreign portfolio inflow and outflow, which led to significant decline in net foreign investment in the Nigerian stock market.

    The seventh month report for July 2013 had indicated that total foreign inflow stood at N31.81 billion as against outflow of N61.90 billion in July, showing the widest divergence between inflow and outflow so far this year.

    Total foreign inflow had risen to N90.15 billion while outflow stood at N60.09 billion as total foreign transactions increased to N150.24 billion in June.

    Foreign investors had accounted for 36.89 per cent, 39.65 per cent, 52.78 per cent, 64.48 per cent, 48.68 per cent and 51.13 per cent in January, February, March, April, May and June respectively.

    Portfolio transactions by foreign investors totaled N61.46 billion, N75.97 billion, N80.14 billion, N122.97 billion, N91.86 billion and N150.24 billion in January, February, March, April, May and June respectively.

    Foreign investors staked about N4.08 trillion on quoted shares on the NSE between 2007 and 2012. Foreign investors had gradually and consecutively increased their investments in Nigerian equities from about 15 per cent of total market turnover in 2007 all through till a high of about 67 per cent in 2011.

    Foreign portfolio investors concluded deals worth about N2 trillion on publicly quoted Nigerian equities between 2012 and 2013. Value of foreign portfolio transactions on the NSE increased by 29 per cent in 2013 as domestic investors showed keener interests in listed equities.

    Value of foreign portfolio transactions increased from N808.4 billion in 2012 to N1.04 trillion in 2013. In both years, Nigeria retained net inflow from foreign investors. However, net inflow dropped considerably from N94.4 billion in 2012 to N20.48 billion in 2013, reflecting the speculative and edgy nature of foreign portfolios during the year.

    Foreign investors had accounted for about 61.4 per cent of total turnover on the NSE in 2012 while domestic investors accounted for 38.6 per cent. However, domestic investors stepped up their participation with 49.2 per cent in 2013 while foreign investors slowed down to 50.8 per cent. Foreign portfolios were the main drivers of transactions on the NSE between 2011 and 2012, with foreign investors accounting for average of two-thirds of equity transactions between 2011 and 2012.

    Total foreign inflow increased from N451.40 billion in 2012 to N531.26 billion in 2013 just as foreign outflow correspondingly increased from N357 billion in 2012 to N510.78 billion in 2013.

    Foreign investors staked about N4.08 trillion on quoted shares on the NSE between 2007 and 2012. Foreign investors had gradually and consecutively increased their investments in Nigerian equities from about 15 per cent of total market turnover in 2007 all through till a high of about 67 per cent in 2011.

    Foreign portfolio transactions increased from N615.6 billion in 2007 to N787.4 billion in 2008. These trimmed down to N424.6 billion in 2009 before rising consecutively to N577.3 billion and N847.9 billion in 2010 and 2011 respectively. Foreign portfolio trades stood at N808.4 billion in 2012. With these, the two-way flow of foreign portfolio investments showed that while foreign investors flowed in about N2.01 trillion during the period, they equally took away about N2.17 trillion.

  • Firms in last-minute rush to meet regulatory deadline

    Firms in last-minute rush to meet regulatory deadline

    • 60 per cent of quoted firms may face sanctions

    Ahead of today’s deadline for quoted companies to submit their audited reports and accounts for the year ended December 31, 2013, several firms are making last-minute efforts to scale the deadline and avoid the poor corporate governance tag and sanction of the Nigerian Stock Exchange (NSE).

    Post-listing rules at the NSE require quoted companies to submit their earnings reports, not later than three months after the expiration of the period. Most quoted companies including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year. The business year thus terminates on December 31.

    NSE’s regulatory filing calendar indicates that the deadline for submission of annual report for companies with Gregorian calendar business year is today, Monday March 31.

    The Nation’s investigation at the close of the market at the weekend indicated that less than 20 per cent of affected companies had submitted their earnings reports.

    At the last count, some 33 firms have so far submitted their reports in line with the listing requirements.

    Market sources said several companies were finalising arrangements to submit their reports today, in time to beat the close-of-business deadline.

    A spokesperson for a leading healthcare company confirmed that the annual report and accounts of the company would be submitted to the Exchange today.

    Notwithstanding the expected rush today, there are indications that more than 60 per cent of the affected companies may miss the earnings deadline.

    Market sources said they expected the momentum of submission to be high today, since compliance within deadline is generally regarded as a measure of good corporate governance. Besides, companies that failed to meet the earnings deadline will also be sanctioned by the Exchange. They are liable to monetary fines and naming-and-shaming publication of their names

    The NSE had slammed some N60.2 million as fines on 34 companies for failure to meet deadlines for 2011 audited reports. With a range of N3.8 million and N100, 000, average fine for the year was N1.77 million. NSE has since sustained the two-way sanction.

    Firms that have submitted their 2013 results included Unilever Nigeria, FCMB Group, Nigeria Aviation Handling Company (Nahco), Julius Berger Nigeria, Livestock Feeds, United Bank for Africa (UBA), First Aluminium Nigeria, Cement Company of Northern Nigeria, Sterling Bank, Dangote Cement, GlaxoSmithKline Consumer Nigeria, Berger Paints, Lafarge Cement Wapco Nigeria, Cadbury Nigeria, Zenith Bank, Transnational Corporation of Nigeria (Transcorp), Guaranty Trust Bank, Nestle Nigeria, Forte Oil and Africa Prudential Registrars among others.

    NSE tags and applies fines on companies that fail to meet earnings reports’ deadline. Under the corporate governance and rules compliance assessment report known as X-Compliance Report, NSE identified four different kinds of tags or symbols to alert investors about the status of each quoted company.

  • Stockbrokers kick against NSE’s demutualisation

    Stockbrokers kick against NSE’s demutualisation

    Stockbrokers have kicked against the decision of the National Council of the Nigerian Stock Exchange (NSE) to proceed with the demutualisation of the Exchange without a resolution to that effect from a general meeting of owner-members of the Exchange.

    A cross section of leading stockbrokers, who spoke to The Nation, said it was against the Memorandum and Articles of Association of the NSE and good corporate governance practice for the NSE to initiate any process of demutualisation without the consent of the owners of the Exchange, who are mainly stockbrokers.

    The criticism comes on the heels of announcement by the National Council of the NSE seeking to engage the services of a consortium of two financial advisers in preparation for the commencement of the demutualisation.

    The advertisement titled “Invitation for Expressions of Interest (EOIs) for Financial Advisory Services towards the Demutualization of the Nigerian Stock Exchange” indicated that the invitation was in “furtherance of the efforts of NSE to commence its demutualisation” and that the consortium of two financial advisers will advise the NSE through the process of demutualisation.

    Industry leaders, who preferred anonymity for the meantime in order not to aggravate brewing crisis of confidence at the Exchange, said the advertisement and the purported mindset on demutualisation were like putting the cart before the horse.

    The NSE has not responded to request for comment on the brewing crisis of confidence.

    While stockbrokers generally appear to be in support of the demutualisation, they said the process appeared to be under a tele-guide to achieve predetermined objective.

    “The decision to demutualise should come from the owners of the NSE, the broker-dealers. Has there been an annual general meeting (AGM) or Extraordinary General Meeting (EGM) where such decision was taken?” a leader of the industry practice regulatory group queried.

    Stockbrokers appeared to be unanimous about the absence of a valid resolution or an AGM or EGM on such issue as demutualisation.

    “That is a valid point, before anything can be done, there has to be the consent of the owners, it has to go through an EGM,” another leader of a trade group for active brokers responded when told about the concerns of other brokers.

    Stockbrokers said they suspected foul play in the manner that the council and management of the NSE have been handling the demutualisation claiming that the process might short-change the members of the Exchange who had laboured to build the platform to what it is today.

    They said by failing to organize an AGM or EGM, which would have determined the real owners with the right to vote on the affairs of the NSE; the Exchange may be working with a wrong list of members.

    “In taking a decision on demutualisation, there is the need to identify the owners, there is need for the owners to be told in clear terms what they are doing, and we all have to agree on the list of the owners. They have admitted some ordinary members in questionable circumstance in recent time, we need to determine their status because we feel that it is not right that when some people want to benefit from their sweat, then some people just pop in from nowhere,” one of the stockbrokers’ leaders said.

    Demutualisation is the process of changing a member-owned stock exchange, otherwise known as mutual exchange, to a corporate entity owned by shareholders. Established as Lagos Stock Exchange (LSE) in 1960, the NSE was conceptualized as a limited by guarantee not-for-profit organisation thriving on the goodwill, reputation and integrity of its members.

    The NSE is currently owned by its members, mainly stockbrokers and some high networth individuals and institutions. At the last count, the NSE has some 350 individual and institutional members including some 255 active dealing members. Alhaji Aliko Dangote, president of the Dangote Group, which has four listed companies including Dangote Cement, the most capitalised company on the NSE; is the president of the National Council of the NSE while Mr Oscar Onyema is the chief executive officer.

    The Securities and Exchange Commission (SEC) had two weeks ago confirmed that the Federal Government is currently reviewing the guidelines for the demutualisation of the NSE.

    Director General, Securities and Exchange Commission (SEC), Ms Arunma Oteh, said that the guidelines for the demutualization are currently undergoing the scrutiny of the Ministry of Finance to ensure they serve the best interest of the country.

    According to her, SEC had developed a framework for the demutualization of the NSE and future securities exchanges based on the work of the technical committee and inputs from Nigerian and international experts and stakeholders and submitted this to the government for review and consent.

    Oteh said the public interest is paramount in the demutualization of the NSE given the symbolic importance of the Exchange as the only equities’ Exchange in Nigeria and the historic role the government played in setting up the Exchange.

    She said the guidelines would serve the immediate purpose of the demutualization of the NSE and future demutualization of other exchanges noting that “it is guidelines for anytime that there is any demutualization exercise and not just focused on the Nigerian Stock Exchange”.

    She added that SEC was also concerned that the current owners of the NSE should get more value from the demutualization noting that the NSE has gained significant value now than it was in 2010.

    The Securities and Exchange Commission (SEC) had in 2011 set up a technical committee on the demutualisation of the NSE, which submitted a comprehensive report on the alternative processes for the demutualisation of the NSE in line with international best practices. The committee examined regulatory policies, management, operation, governance and financial issues in demutualisation of NSE as well as various demutualisation models and experience including valuation model for demutualization.

     

     

     

     

     

     

     

  • NSE’s sale: Brokers may get N200b

    NSE’s sale: Brokers may get N200b

    Members of the Nigerian Stock Exchange (NSE) may realise more than N200 billion from the demutualisation of the Exchange as government and the council of the NSE prepare the groundwork for its sale.

    Sources at the weekend estimated the value of the NSE variously at between $1 billion and N200 billion. Many analysts estimated the value of the NSE to exceed N200 billion given the recent investments in technologies and new growth initiatives.

    The NSE is owned by mainly stockbrokers and some high networth individuals and institutions. At the last count, the NSE has some 350 individual and institutional members including some 255 active dealing members.

    Demutualisation is the process of changing a member-owned stock exchange, otherwise known as mutual exchange, to a corporate entity owned by shareholders. Established as Lagos Stock Exchange (LSE) in 1960, the NSE was conceptualised as a limited by guarantee not-for-profit organisation thriving on the goodwill, reputation and integrity of its members.

    A market source said stockbrokers could make representation to the market regulators to use the net proceeds from the demutualisation to beef up their capital base.

    Securities and Exchange Commission (SEC) has confirmed that the Federal Government is currently reviewing the guidelines for the demutualisation of the Nigerian Stock Exchange (NSE) to ensure that the sale of the Exchange conforms to the international best practice.

    The demutualisation entails the allotment of shares of the NSE to existing members and subsequent or concurrent sale of similar shares to strategic and general investing public.

    Director-General, Securities and Exchange Commission (SEC), Ms Arunma Oteh, confirmed that the guidelines for the demutualisation are currently undergoing the scrutiny of the Ministry of Finance to ensure they serve the best interest of the country.

    According to her, SEC had developed a framework for the demutualisation of the NSE and future securities exchanges based on the work of the technical committee and inputs from Nigerian and international experts and stakeholders and submitted this to the government for review and consent.

    The confirmation comes on the heels of announcement last week by the National Council of the NSE seeking to engage the services of a consortium of two financial advisers in preparation for the commencement of the demutualisation.

    Ms Oteh said the public interest is paramount in the demutualisation of the NSE given the symbolic importance of the Exchange as the only equities’ Exchange in Nigeria and the historic role the government played in setting it up.

  • Investors lose N353b in three days as equities drop to lows

    Investors in Nigerian equities have lost some N353 billion to the latest bearish streak as emerging earnings failed to halt a mid-week downtrend that saw several stocks dropping to their lowest values by the weekend.

    Aggregate market value of all equities quoted on the Nigerian Stock Exchange (NSE) closed at the weekend at N12.261 trillion, down by N353 billion from the opening value of N12.614 trillion recorded on Wednesday when the bearish market started.

    The three-day consecutive decline reversed earlier gains and built up a week-on-week loss of N251 billion for investors. Aggregate market value of all equities had opened last week at N12.512 trillion. The downtrend implied an average week-on-week loss of 2.01 per cent, which further depressed the average year-to-date return at the NSE to -7.64 per cent.

    The All Share Index (ASI), the main index that tracks prices of all quoted equities, depreciated by 2.01 per cent to close at 38,171.32 points as against its opening index of 38,952.47 points for the week.

    With 65 losers to 18 gainers, the widespread downtrend also impacted negatively on all the group indices at the NSE. The NSE 30 Index, which tracks the 30 most capitalised stocks, mirrored the average market with a decline of 2.19 per cent. The NSE Banking Index depreciated by 2.62 per cent. The NSE Insurance Index dropped by 2.06 per cent. The NSE Consumer Goods Index declined by 1.52 per cent. The NSE Oil and Gas Index recorded the steepest decline with 5.02 per cent while the NSE Industrial Index recorded the least depreciation with 0.68 per cent.

    Several highly capitalised stocks dwindled to their lowest values so far this year at the weekend. These included Nestle Nigeria, at N1,026.35; PZ Cussons Nigeria, N34; FBN Holdings, N11.67; FCMB Group, N3.28; Ashaka Cement, N16.16; CAP, N45; Lafarge Cement Wapco Nigeria, N111; Oando, N16.15; MRS Oil and Gas, N54.44; Flour Mills of Nigeria, N76; National Salt Company of Nigeria, N12.35 and Dangote Sugar Refinery, N9.44 among others.

    Total turnover last week stood at 1.99 billion shares worth N15.10 billion in 21,948 deals in contrast to a total of 2.15 billion shares valued at N18.49 billion that were traded in 22,697 deals in the previous week. Financial services sector remained the most active sector with a turnover of 1.61 billion shares valued at N9.64 billion traded in 12,904 deals; thus contributing 80.83 per cent and 63.87 per cent to the total equity turnover volume and value respectively. The conglomerates sector followed with a turnover of 149.22 million shares worth N738.89 million in 1,531 deals. The consumer goods sector placed third with 64.82 million shares worth N2.47 billion in 3,334 deals.

    On stock by stock basis, the trio of UBA Capital Plc, NEM Insurance Company and Access Bank Plc were the most active. They jointly accounted for 686.25 million shares worth N2.25 billion in 1,639 deals, representing 34.50 per cent and 14.90 per cent of the total equity turnover volume and value respectively.

     

    Analysts at Cowry Asset Management said they expected a positive market situation this week as investors resume bargain-hunting for several stocks that had dropped substantially.

    “We anticipate resumption in bargain hunting activities as investors accumulate beat-down stocks on their portfolio s in expectation of more corporate actions,” Cowry Asset stated.

     

  • NSE calls for capacity programme for skills update

    NSE calls for capacity programme for skills update

    The Nigerian Society of Engineers (NSE) has called for a continuous capacity building programme to update knowledge and skills of members working with the Nigerian Institute of Transport Technology (NITT).

    This is contained in a statement issued by Mr Paul Mshelizah, the Chief Public Relations Officer of the institute, at the weekend in Abuja.

    It said the call was made when a delegation of NSE, Zaria, Kaduna State branch, visited Dr Aminu Yusuf, the Director -General, NITT, to enhance the working relationship between the two organisations.

    It, however, commended the management of NITT for initiating programmes with direct bearing on the growth of the institute and engineering profession.

    The statement acknowledged the immense contribution of the institute toward the economic development of the country.

    It assured members of the NSE of the institute’s willingness to support its activities, particularly programmes initiated by engineers serving in the institute.

    It stated that over 85 per cent of staff serving in the Transport Technology Centre (TTC) were trained engineers.

    “As part of NITT’s commitment toward enhancing the ideals of engineering, over 85 per cent of staff serving in the Transport Technology Centre (TTC) are trained engineers.

    “This is to further enable the centre achieve its noble goals of innovation, invention and other forms of technological development,” it said.

  • Foreign portfolios’ outflows rising, says NSE

    Foreign portfolios’ outflows rising, says NSE

    There has been a negative spike in foreign portfolio transactions this year, with more funds moving out than coming in, according to the latest foreign portfolio investment report by the Nigerian Stock Exchange (NSE).

    The maiden foreign portfolio investment (FPI) report in the year tracked the outflow and inflow of foreign investments at the stock market in January and compared these with January, last year and preceding period in December,last year.

    The NSE’s foreign portfolio investment report indicated that while foreign investors were relatively active in January compared with January, last year and last December, their transactions were mostly on the sell side rather than buy side.

    The 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.

    According to the report, total foreign outflow was N50.14 billion in January as against inflow of N39.53 billion during the period, bringing total foreign transactions to N89.67 billion. In January, last year, foreign inflow was higher at N40.96 billion against outflow of N20.50 billion.

    The report underlined increased foreign participation, though negative. Foreign investors accounted for 49.28 per cent of total transaction value of N181.97 billion in January 2014 as against 36.89 per cent of total transactions of N166.60 billion in January, last year and 48.91 per cent of total transactions of N142.24 billion in December 2013.

    Portfolio flow analysis in recent period had shown a consistent trading pattern in foreign transactions. While foreign investors flowed in more funds than they took out in the first half of last year, they have since been taking more money out than they invested since the beginning of the second half of last year.

    Monthly analysis showed that total foreign transactions closed December 2013 at N69.57 billion, consisting of inflow of N32.40 billion and outflow of N37.17 billion. Total foreign transactions rose to N88.89 billion in November, including inflow of N42.68 billion and outflow of N46.21 billion. These had closed October at N82.33 billion including inflow of N39.45 billion and outflow of N42.88 billion.

    In September, last year, total foreign inflow was N26.14 billion as against outflow of N27.88 billion, bringing total foreign transactions to N54.02 billion. Total transactions at the stock market during the month stood at N108.19 billion, out of which domestic investors contributed N54.17 billion or 50.07 per cent.

    In August, foreign inflow had stood at N31.12 billion as against outflow of N39.76 billion. Total foreign transactions thus stood at N70.88 billion, 52.26 per cent of the total turnover of N135.63 billion recorded for the month.

    Foreign investors had took out nearly a double of every penny they invested in the Nigerian stock market in July, unusually high disparity between foreign portfolio inflow and outflow, which led to significant decline in net foreign investment in the Nigerian stock market.

    The seventh month report for last July had indicated that total foreign inflow stood at N31.81 billion as against outflow of N61.90 billion in July, showing the widest divergence between inflow and outflow so far this year.

     

    Total foreign inflow had risen to N90.15 billion while outflow stood at N60.09 billion as total foreign transactions increased to N150.24 billion in June.

    Foreign investors had accounted for 36.89 per cent, 39.65 per cent, 52.78 per cent, 64.48 per cent, 48.68 per cent and 51.13 per cent in January, February, March, April, May and June respectively.

    Portfolio transactions by foreign investors totaled N61.46 billion, N75.97 billion, N80.14 billion, N122.97 billion, N91.86 billion and N150.24 billion in January, February, March, April, May and June respectively.

    Foreign investors staked about N4.08 trillion on quoted shares on the NSE between 2007 and 2012. Foreign investors had gradually and consecutively increased their investments in Nigerian equities from about 15 per cent of total market turnover in 2007 all through till a high of about 67 per cent in 2011.

    The Nation recently reported that foreign portfolio investors concluded deals worth about N2 trillion on publicly quoted Nigerian equities between 2012 and 2013. The report indicated that the value of foreign portfolio transactions on the NSE increased by 29 per cent in 2013 as domestic investors showed keener interests in listed equities.

    According to the report compiled by the NSE, value of foreign portfolio transactions increased from N808.4 billion in 2012 to N1.04 trillion in 2013. In both years, Nigeria retained net inflow from foreign investors. However, net inflow dropped considerably from N94.4 billion in 2012 to N20.48 billion in 2013, reflecting the speculative and edgy nature of foreign portfolios during the year.

    But while foreign investors gradually reduced their dominance, Nigerian investors regained more confidence and created a near-balance market situation. Foreign investors had accounted for about 61.4 per cent of total turnover on the NSE in 2012 while domestic investors accounted for 38.6 per cent. However, domestic investors stepped up their participation with 49.2 per cent in 2013 while foreign investors slowed down to 50.8 per cent. Foreign portfolios were the main drivers of transactions on the NSE between 2011 and 2012, with foreign investors accounting for average of two-thirds of equity transactions between 2011 and 2012.

    Total foreign inflow increased from N451.40 billion in 2012 to N531.26 billion in 2013 just as foreign outflow correspondingly increased from N357 billion in 2012 to N510.78 billion in 2013.

    Foreign investors staked about N4.08 trillion on quoted shares on the NSE between 2007 and 2012. Foreign investors had gradually and consecutively increased their investments in Nigerian equities from about 15 per cent of total market turnover in 2007 all through till a high of about 67 per cent in 2011.

    The report underlined the early positioning of the foreign investors, who had saw through the prospects of Nigerian equities amidst the downtrend and the rampant herd instinct of the domestic investors, who mostly usually look at recovering market.

    Foreign portfolio transactions increased from N615.6 billion in 2007 to N787.4 billion in 2008. These trimmed down to N424.6 billion in 2009 before rising consecutively to N577.3 billion and N847.9 billion in 2010 and 2011 respectively. Foreign portfolio trades stood at N808.4 billion in 2012. With these, the two-way flow of foreign portfolio investments showed that while foreign investors flowed in about N2.01 trillion during the period, they equally took away about N2.17 trillion.

     

     

     

     

     

  • Equities lose N195b as average return declines to -5.75%

    Nigerian equities lost about N195 billion in market value last week as four-day successive decline overshadowed last-day recovery at the weekend. Most key indices at the Nigerian Stock Exchange (NSE) indicated widespread declines across sectors.

    The benchmark index at the stock market, the All Share Index (ASI), indicated a week-on-week decline of 1.53 per cent, pushing the average year-to-date return at the stock market to -5.75 per cent. ASI closed weekend at 38,952.47 points as against its index-on-the-board of 39,558.89 points for the week.

    Most value-based indices mirrored the overall market position. The NSE 30 Index, which tracks the 30 most capitalised companies, declined by 1.66 per cent to close the week at 1,748.25 points. The NSE Insurance Index indicated average loss of2.31 per cent within the insurance sector, closing at 143.28 points. The NSE Consumer Goods Index showed the worst decline with -4.67 per cent to close at 960.71 points. The NSE Lotus II Index, which serves as benchmark for ethical stocks, indicated a weekly loss of 1.79 per cent to close at 2,789.07 while the NSE-ASeM Index, which tracks stocks on the second board, declined by 0.30 per cent to close at 956.72 points.

    Meanwhile, banking stocks rode on the back of gains by Union Bank of Nigeria and Zenith Bank to record a marginal gain of 0.26 per cent. The NSE Banking Index closed the week higher at 385.45 points. The NSE Oil and Gas Index also rode on the back of Forte Oil to lead the contrarian groups with a week-on-week average gain of 1.37 per cent to close at 305.61 points. Forte Oil had led the gainers with a gain of N15.60 to close at N104. The NSE Industrial Goods Index also closed positive with a gain of 0.52 per cent to close at 2,582.16 points.

    With 54 losers to 32 gainers, aggregate market value of all quoted equities lost N195 billion to close the week at N12.512 trillion as against its week’s opening value of N12.707 trillion. A total of 198 stocks were traded during the week, with 112 stocks marinating their opening prices.

    Total turnover stood at of 2.15 billion shares worth N18.49 billion in 22,697 deals. Financial services sector led the activity chart with 1.72 billion shares valued at N11.15 billion in 12,303 deals, representing about 80 per cent of aggregate turnover volume. The conglomerates sector placed second with a turnover of 236.71 million shares worth N1.05 billion in 1,773 deals. Consumer goods sector followed with 52.82 million shares worth N3.50 billion in 3,664 deals.

    The trio of Wema Bank Plc, Transnational Corporation of Nigeria Plc and Zenith International Bank Plc were the most active accounting for 873.34 million shares worth N6.06 billion in 2,983 deals, about 41 per cent of aggregate turnover volume.