After heading south through most of July, the Nigerian equities market took a turn for the better last week despite two days of losses
The market had in the past few weeks witnessed massive losses due to negative sentiments fuelled by weaker- than- expected second quarter 2014 results across sectors as well as profit-taking from previous gains.
But the situation changed last week when a couple of quoted companies posted improved full-year and half-year reports led by Conoil Plc and Forte Oil Plc. Forte Oil result showed that profit before income tax increased 152 per cent to N4.19 billion compared to N1.66 billion recorded in H1 2013.
Similarly, its revenue grew 33 per cent to N79.61 billion compared to N59.96 billion recorded in the same period in 2013. On its part, Conoil Plc announced a dividend of N4 per share, though details of its full-year results are still not available.
At the close of business last week, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) and market capitalisation rose by 1.58 per cent to close on Friday at 42,598.46 and N14.066 trillion respectively. Similarly, all the NSE sector indices appreciated during the week with the exception of the NSE Insurance Index that slipped during the week by 2.28 per cent. However, NSE ASeM index remained flat. Following last week's performance, some traders told THISDAY that the days ahead would be positive as the profit-taking activities slow down as more investors renew demand for undervalued stocks with strong full year results.
"We think the worst is over and we expect that this positive momentum will continue next week when profit taking reduces drastically and investors might seek to capitalise on undervalued stocks particularly the banking stocks," said a trader.
Summary of daily performance The market had last Monday started the trading week on a poor note as the Exchange's broad market index declined by 0.32 per cent. Trading had started with positive sentiments, but sell pressure on Dangote Cement Plc, Stanbic IBTC Plc and PZ Cussons Nigeria Plc drove the ASI to negative, closing at 41,801.51. Market capitalisation also declined by N43.88 billion to close at N13.80 trillion. Activity level was however mixed as the volume of trades consummated was up by 4.00 per cent, while value of transactions declined 16.90 per cent compared with previous trading figures. Banking equities (led by Guaranty Trust Bank Plc's 706 million units) accounted for 42.1 per cent of market turnover. A total of 288 million units of shares worth N4.94 billion exchanged hands in 5,480 deals. Trading on the floor of the NSE took a positive turn on Tuesday as a mid-session rally in the share prices of heavyweight tickers; Dangote Cement Plc, Nigerian Breweries Plc, Guaranty Trust Bank Plc and SEPLAT Petroleum Plc drove a market wide appreciation. As a result, the benchmark index went up by 1.18 per cent, trading within a band of 41,780.38 and 42,373.49. When the closing bell rang, the benchmark index was at 42,292.93 with a corresponding market capitalisation of N13.97 trillion. Market activity, however, did not reflect the positive movement on the bourse as trades thinned despite heavy activity in the banking subsector (45.1 per cent of market turnover). At the close of trades, about 257 million units of shares worth N3.64 billion exchanged hands. The equities market again closed on a positive note on Wednesday, as the NSE ASI appreciated by 0.11 per cent to close at 42,339.84 points, compared with the appreciation of 1.18 per cent recorded on Tuesday. The appreciation in the Index could be attributed to the gains recorded in the share prices of some highly capitalised stocks such as: UBA Plc, Zenith Bank Plc, FBN Holdings Plc, Guaranty Trust Bank Plc, and Mobil Oil Nigeria Plc. Similarly, the market capitalisation appreciated by 0.11 per cent to close at N13.98 trillion, compared with the appreciation of 1.18 per cent recorded Tuesday to close at N13.97 trillion. The market sustained its positive momentum, closing on a positive note on Thursday, with benchmark index appreciating by 0.64 per cent to close at 42,612.33 points, compared with the marginal appreciation of 0.11 per cent recorded Wednesday. The appreciation in the Index on the day could be attributed to the gains recorded in the share prices of Dangote Cement Plc, FBN Holdings Plc, Guaranty Trust Bank Plc, Nigerian Breweries Plc, and ETI Plc. Also, the market capitalisation appreciated by 0.64 per cent to close at N14.07 trillion, compared with the marginal appreciation of 0.11 per cent recorded the previous day to close at N13.98 trillion. The total value of the stocks traded on the day on the floors of the NSE was N3.01billion, down by 38.18 per cent from N4.87 billion traded on Wednesday. The three-day gaining streak was interrupted by a marginal 0.03 per cent depreciation at the close of trading for the week last Friday to be at 42,598.46 from 42,612.33 attained on Thursday. Market capitalisation also decreased to N14.06 trillion from N14.07 trillion the previous trading day.
Market turnover Meanwhile, an analysis of trading activity for the week under review showed that a total of 1.430 billion shares worth N20.185 billion in 26,289 deals were traded by investors on the floor of the Exchange in contrast to a total of 1.345 billion shares valued at N19.580 billion that exchanged hands the previous week in 17,075 deals. The financial services industry led the activity chart in volume terms with 1.071 billion shares valued at N9.937 billion traded in 12,873 deals; thus contributing 74.90 per cent and 49.23 per cent to the total equity turnover volume and value respectively. The conglomerates industry followed with a turnover of 86.116 million shares worth 694.699 million in 1,649 deals. The third place was occupied by the oil and gas industry with 83.871 million shares worth N2.163 billion in 4,056 deals. Trading in the top three equities namely- Access Bank Plc, Standard Alliance Insurance Plc and Zenith International Bank Plc (measured by volume) accounted for 446.182 million shares worth N4.506 billion in 2,123 deals, contributing 31.20 per cent and 22.33 per cent to the total equity turnover volume and value respectively. Also traded during the week were a total of 282 units of Exchange Traded Products (ETPs) valued at N251,033.40 executed in 12 deals compared with a total of 27,660 units valued at N613,729.40 million transacted the previous week in 13 deals. Similarly, 28,400 units of FGN bonds valued at N28.087 million were traded this week in 6 deals compared with a total of 77,480 units of FGN bonds valued at N90.277 million transacted the previous week in 8 deals.
Gainers and losers A look at the price movement chart of the NSE showed that 45 equities appreciated compared to 27 equities of the preceding week. Thirty-six equities depreciated as against 47 equities of the preceding week, while 119 equities remained unchanged lower than 126 recorded in the preceding week. Mobil Oil Nigeria Plc led with N13.90), followed by Conoil Plc (N13.41). Others among the top 10 include: Seven-Up Bottling Company Plc (N8.00), Okomu Oil Palm Plc (N2.76), NNFM Plc (N1.93), ETI Plc (N1.46), CCNN Plc (N1.02), Pharma-Deko Plc (18 kobo) Courtville Plc (six kobo) and Royal Exchange Plc (five kobo). On the other hand, the top 10 losers included: Champion Breweries Plc (43 kobo), Caverton Plc (32 kobo), Neimeth Pharmaceuticals Plc (13 kobo), Continental Reinsurance Plc (12 kobo), Evans Medical Plc (11 kobo), Infinity Trust Mortgage Bank Plc (eight kobo), A.G. Leventis Plc (seven kobo), WAPIC Insurance Plc (six kobo), RT Briscoe Plc (five kobo), and Prestige Assurance Plc (four kobo).