Equities Market Begins 2018 on Bullish Note

The Nigerian equities market commenced 2018 on bullish note last week as the Nigerian Stock Exchange (NSE) All-Share Index appreciated by 1.76 per cent to close at 38,916.85. Market capitalisation closed higher at N13.851 trillion, translating to N242 billion in the first week of the year.

After three years of decline, the Nigerian equities market rebounded to close last year with a growth of 42.3 per cent. Some market analysts had projected that the market would remain bullish in 2018.

Apparently in line with the projected positive trend, the market commenced 2018 with a growth of 1.76 per cent. Similarly, all other indices finished higher during the week with the exception of the NSE Premium, NSE ASeM and NSE Lotus II Indices that depreciated by 0.58 per cent, 1.44 per cent and 0.82 per cent respectively.

According to market analysts, they expect market fundamentals (which remain strong, amid improving macro economic conditions) to sustain gains.

In terms of sectoral performance for the week, the NSE Banking Index led with 6.3 per cent, followed by the NSE Insurance Index(6.32 per cent); NSE Insurance Index (+4.66 per cent), NSE Industrial Goods Index (+3.49 per cent), NSE Consumer Goods Index(+1.47 per cent), and Oil & Gas (+0.95 per cent).

Daily Performance

The market resumed for trading with a marginal growth of 0.06 per cent. The marginal appreciation recorded in the share prices of Access Bank, Zenith Bank, UBA, Dangote Sugar and Nigerian Breweries lifted the market for the day.

Sector performance was mixed as three of five indices closed northwards. The NSE Insurance Index gained the most, rising 0.9 per cent on the back of buying interest in AXA Mansard (+4.7 per cent), Linkage Assurance Plc (+4.6 per cent) and AIICO Insurance (+3.9 per cent). The NSE Consumer Goods Index trailed rising by 0.3 per cent as Dangote Sugar Refinery Plc (+1.8 per cent), PZ Cussons (+2.7 per cent) and NASCON Allied Industries Plc (+3.9 per cent) recorded gains.

The Industrial Goods Index followed, adding 0.2 per cent as investors took position in CAP Plc (+5.0 per cent).

Contrarily, the NSE Oil & Gas Index depreciated 0.4 per cent primarily due to price depreciation in Forte Oil (-3.4 per cent) while the NSE Banking Index was dragged by 0.04 per cent southward following losses in GTBank(-0.5 per cent) and ETI (-4.3 per cent).

The market closed negatively on Wednesday following decline by Dangote Cement Plc. The NSE ASI fell by 0.20 per cent. However, high demand for banking stocks at the stock market lifted their prices further.

Out of the 37 price gainers recorded yesterday, 15 where banking stocks. Diamond Bank Plc led the price overall price gainers’ chart with 9.5 per cent, trailed by FCMB Group Plc with 9.4 per cent. Fidelity Bank Plc and Wema Bank Plc chalked up 8.5 per cent and 8.0 per cent respectively.

There were also: FBN Holdings Plc (4.6 per cent); Sterling Bank Plc (4.4 per cent); Unity Bank Plc (3.6 per cent); United Bank for Africa Plc (3.4 per cent) among others.

The banking sector recorded the highest gain in 2017 with the NSE Banking Index rising by 73.3 per cent.

Commenting on the last year’s performance of the sector, analysts at Meristem Securities Limited said active investor participation was seen as investors reacted to the inflow of favourable news within the space in a bid to position adequately for short-term and long-term profits.

“The sector’s performance was largely anchored by investors’ reaction towards the financial performance and corporate benefits of sector companies. We also note the impact of portfolio rebalancing activities and the year-end rally on the sector, as this drove most counters to their year-highs. In the coming year, we envisage increased participation within the space as we note that the sector is highly suited for speculative trading as well as long-term investments,” the analysts said.

Meanwhile, a further analysis of the trading on Wednesday showed that the decline in the index was majorly caused by the depreciation in share price of Dangote Cement Plc. The stock fell by 3.0 per cent to close lower at N223 per share. However, Double 11 Plc led the 11 price losers with 9.2 per cent decline. Neimeth International Pharmaceuticals Plc trailed with 8.0 per cent, while Cutix Plc and Cadbury Nigeria Plc shed 4.9 per cent and 4.2 per cent respectively.

Commenting on the market performance, FSDH Research said the market closed on a negative note largely attributable to the decline recorded in the share price of Dangote Cement

“However, there was a sustained demand for banking stocks, most of which traded at the higher limit and closed on bid. We expect increased activity and bargain hunting in coming trading sessions driven by positioning for 2017 corporate earnings,” they said.

The bulls dominated the equity trading session on Thursday as NSE ASI appreciated by 1.28 per cent to close at 38,676.12. The appreciation recorded in the share prices of Zenith Bank, UBA, Lafarge Africa, Seplat and GTBank bolstered the Index today

.The three most actively traded stocks were Diamond Bank (169.05 million shares), FCMB Group (163.33 million shares) and Transcorp (144.92 million shares).

According to analysts at FSDH activity level and investor sentiment strengthened and remained positive.

“Performance across sectors was positive, buoyed by buying interests. Majority of the banking sector stocks traded at the upper limit and closed on bid. The market will likely remain in the positive territory in the coming trading sessions, however, with the possibility of profit taking in some stocks,” they said.

The market extended its gain on Friday with the index rising by 0.64 per cent to close at 38,923.26, influenced by appreciation recorded in the share prices of Unilever, Stanbic IBTC, Zenith Bank, Lafarge Africa and GT Bank.

The three most actively traded stocks were Transcorp (171.68 million shares), Diamond Bank (89.66 million shares) and FCMB Group (86.50 million shares)

Commenting on the performance, analysts at FSDH said the market rally continued with activity level and investor sentiments largely positive.

“Bargain hunting was broadly sustained, however, profit taking set in as expected, particularly in the banking sector stocks which rallied to the upper limit at the opening of the market. Profit taking is likely to continue in the coming sessions but the market will remain positive and active in the immediate term,” they said.

Market Turnover

It was a four-day trading week as the federal government of declared January 1, 2018 as a public holiday in commemoration of the New Year celeberation.

Consequently, a total turnover of 2.417 billion shares worth N18.813 billion were traded in 20,874 deals in the week under review as against a total of 1.310 billion shares valued at N12.635 billion that exchanged hands in 9,016 deals the previous week.

However, the Financial Services Industry led the activity chart with 1.677 billion shares valued at N8.734 billion traded in 13,033 deals, thus contributing 69.39 per cent and 46.43 per cent to the total equity turnover volume and value respectively.

The Conglomerates Industry followed with 536.922 million shares worth N1.258 billion in 1,288 deals. The third place was occupied by Consumer Goods Industry with a turnover of 100.460 million shares worth N6.951 billion in 3,426 deals. Trading in the top three equities namely – Transnational Corporation of Nigeria Plc, Diamond Bank Plc and Skye Bank Plc accounted for 1.193 billion shares worth N1.681 billion in 2,957 deals.

Price Gainers and Losers

Meanwhile, 55 equities appreciated in price during the week, higher than 32 of the previous week, while 12 equities depreciated lower than 25 equities of the previous week.

Sterling Bank Plc led the price gainers for the week with 30.5 per cent, trailed by FCMB Group Plc with 28.3 per cent. Diamond Bank Plc chalked up 26 per cent, while Skye Bank Plc and Eterna Plc added 21.2 per cent. Honeywell Flour Mills Plc and Fidelity Bank Plc garnered 20 per cent and 18.7 per cent.

Other top price gainers included: Linkage Assurance Plc (18.2 per cent); Unity Bank Plc(16.9 per cent) and Livestock Feeds Plc (16.8 per cent).

Conversely, Double 11 Plc led the price losers with 12. 6 per cent, trailed by N.E.M Insurance Plc with 7.8 per cent. Neimeth International Pharmaceuticals Plc and Omoluabi Mortgage Bank Plc shed 4.0 per cent apiece.

Other top price losers include: Transnationwide Express Plc (3.8 per cent); Nestle Nigeria Plc (3.6 per cent); Dangote Cement Plc (3.0 per cent); Presco Cussons Nigeria Plc (2.9 per cent); and Custodian and Allied Plc (2.3 per cent).