News Column

Equities Market Sheds N186 Billion on Bearish Sentiments

September 1, 2014

Goddy Egene and Eromosele Abiodun

The equities market shed N186 billion (1.34 per cent) in August as weak half year results and profit-taking dampened investor's sentiments. The 1.34 per cent decline is higher than 0.9 per cent drop the market suffered in July. Following uninspiring results by leading manufacturing companies and some banks, demand for equities have remained weak through the month of August.

Although the market closed last Friday, which was the last trading day of the month with a marginal decline of 0.08 per cent, the overall decline for the month stood at 1.34 per cent.

An analysis of the trading showed that despite staging a come-back in the last two days of last week, the bulls were unable to suppress the bears as the market remained in negative territory.

The market witnessed massive sell pressure owing to liquidity squeeze, weaker-than-expected half year results. However, investors had heaved a sigh of relief the previous week as the market appreciated by 0.44 per cent. However, the bears reclaimed control of the market last week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) went down by 0.08 per cent to close at 41,532.31, while market capitalisation fell by same margin to close at N13.714 trillion respectively.

Four of the indices appreciated during the week with the exception of the NSE Consumer Goods Index,(0.23 per cent), NSE Lotus II (1.39 per cent) and NSE Industrial Goods Index (1.51 per cent), which fell by 0.23 per cent, 1.39 per cent and 1.51 per cent respectively. On the other hand, NSE Banking Index, NSE Oil and Gas Index, NSE 30 Index and NSE Insurance Index rose by 2.20 per cent, 0.45 per cent, 0.28 per cent and 0.23 per cent in that order.

Summary of Daily Performance Looking at the market performance on daily basis, trading on the floor of the NSE had started on a poor note on Monday as the benchmark index depreciated by a 0.54 per cent or 224.71 points to close at 41,339.48 points from 41,564.19 attained the previous Friday. Market capitalisation also decreased to N13.65 trillion from N13.72 trillion the previous trading day. Trading activities had also decreased by 10 per cent as investors bought 156.69 million shares worth N1.49 billion, in 3,956 deals, compared to 174.94 million shares worth N1.45 billon, in 3,939 deals exchanged on Friday. Transcorp Plc, Mansard Plc and First Bank Plc were the most actively traded stocks on the exchange on the day in terms of volume, while Guaranty Trust Bank Plc and Transcorp Plc, topped in terms of value. The equities market again closed on a negative note Tuesday, as the NSE ASI depreciated by 0.25 per cent to close at 41,235.25 points, compared to the depreciation of 0.54 per cent recorded on Monday. Similarly, the market capitalisation depreciated by 0.25 per cent to close at N13.62 trillion, compared to the depreciation of 0.54 per cent recorded on Tuesday to close at N13.65 trillion. The depreciation in the Index on the day could be attributed to the losses recorded in the share prices of some highly capitalised stocks such as: Guaranty Trust Bank Plc, FBN Holdings Plc, Oando Plc, Dangote Sugar Refinery Plc and UAC of Nigeria Plc amongst others. The total value of the stocks traded was N2.03 billion, up by 35.94 per cent from N1.49 billion traded Monday.

The equities market recorded another decline on Wednesday as bearish sentiments continue to dominate. The negative outcome on the bourse was as a result of profit-taking in blue chip stocks, which weighed on the index. At the close of trading, the NSE ASI settled at 41,121.12 points, down by 0.28 per cent while market capitalisation stood at N13.58 trillion, dipping N37.68 billion from the previous session. The Oil & Gas tracker led the laggards amongst the sectors recording a 1.83 per cent return for the day; the sector's performance was majorly dampened by Forte Oil Plc and Conoil Plc to profit-taking. In the same manner, the Industrial stocks marked a 0.66 per cent fall as investors' sold off on gains recorded in the previous session by Dangote Cement Plc . Performance in the banking subsector, however, showed a 1.19 per cent rise on the back of gains in Guaranty Trust Bank Plc and Access Bank Plc as investors took position for interim dividend while the Consumer sector recorded a flattish performance to end the day.

The market recovered on Thursday as the benchmark index went up by 0.58 per cent after six consecutive declines. The tier 1 banks (except Access Bank) primarily provided support for the index contributing about 205 points to the index. Market capitalisation stood at N13.66 trillion, a N78.83 billion increment from previous close. Market activity level remained modest with volume trimming by 32.2 per cent to 262.81 million units and value traded reducing by 36.6 per cent to N2.497 billion. Despite that, activity on the bourse was driven by renewed sentiment towards the banking stocks which presented attractive prices after the index had shed 1.60 per cent in the last six sessions.

The market remained positive at the close of business for the week on Friday as the benchmark index appreciated by a 0.42 per cent to close at 41,532.31 from 41,359.87 attained on Thursday. Market capitalisation also increased to N13.71 trillion from N13.65 trillion the previous trading day. Trading activities also increased by 35 per cent as investors bought 355.92 million shares worth N6.13 billion, in 4,587 deals, compared to 263.10 million shares worth N2.49 billon, in 4,617 deals exchanged on Thursday.

Market Turnover Analysis of trading activity for the week under review showed that investors traded 1.342 billion shares worth N16.086 billion in 22,481 compared with 1.031 billion shares valued at N12.284 billion that exchanged hands the previous week in 22,056 deals.

The Financial Services Industry (measured by volume) led the activity chart with 868.867 million shares valued at N7.471 billion traded in 10,992 deals; thus contributing 64.76 per cent and 46.45 per cent to the total equity turnover volume and value respectively.

The Conglomerates Industry followed with a turnover of 186.353 million shares worth 1.403 billion in 2,041 deals. The third place was occupied by Consumer Goods Industry with 84.541 million shares worth N4.235 billion in 3,439 deals.

Trading in the top three equities namely-Access Bank Plc, Transnational Corporation of Nigeria Plc and Sterling Bank Plc (measured by volume) accounted for 524.031 million shares worth N3.900 billion in 3,012 deals, contributing 39.06 per cent and 24.25 per cent to the total equity turnover volume and value respectively.

Besides, a total of 40,845 units of Exchange Traded Products (ETPs) valued at N1,147,958.30 executed in 21 deals were traded in contrast with a total of 13,804 units valued at N541,755.15 million transacted the previous week in 21 deals.

Gainers and Losers In terms of price movement, a total of 28 equities appreciated as against 34 equities of the preceding week while 44 equities depreciated compared with 42 equities of the previous week, while 128 equities remained unchanged higher than 124 recorded in the preceding week. Seven-Up Bottling Company Plc led the price gainers with N7.22. Others are: Beta Glass Plc (N1.74), GTB Plc (N1.37), Premier Breweries Plc (50 kobo), TRANSCORP Plc (38 kobo), UBA Plc (38 kobo), Portland Paints Plc (24 kobo), Red Star Express (20 kobo) and A.G. Leventis Plc (7 kobo), International Energy Insurance Plc (2 kobo). Conversely, Cadbury Nigeria Plc led the price losers with N6.85). Others on the top 10 chart include: Conoil Plc (N3.40), Okomu Oil Plc (N1.97), Northern Nigerian Flour Mills Plc (N1.05), Dangote Flour Plc (50 kobo), Caverton Plc (28 kobo), Vono Plc (20 kobo), Neimeth International Pharmaceuticals Plc (16 kobo), May & Baker Plc (16 kobo) and Royal Exchange Plc ( three kobo).

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Source: AllAfrica

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