Optimism on Earnings Season Drives Stocks Northwards

Investors in the Nigerian equities market smiled home last week as the market rallied for five straight days to close the week in the green. Specifically, the bullish run experienced last week on the Nigeria bourse was buoyed by investors’ drive to take position ahead of probable positive earnings release by listed companies. Already, two companies, Forte Oil Plc and Nigerian Breweries Plc have declared dividends for the 2015 financial year, while more are being expected to announce their performance in the days ahead. Also bargain hunting in bellwethers contributed to the positive run, which moderated the year-to date decline to 13.8 per cent.

At the close of trading last week, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) and market capitalisation appreciated by 5.05 per cent to close the week at 24,689.69 and N8.491 trillion respectively.

Similarly, all other indices finished higher during the week, with the exception of the NSE Banking Index, NSE Insurance Index and the NSE Consumer Goods Index that depreciated by 1.14 per cent, 1.28 per cent and 0.15 per cent respectively, while the NSE ASeM index closed flat.

The equities market had the previous week dipped by 1.73 per cent week as some investors took profit in the Banking and Consumer sectors. However, the negative trend was reversed last week as investors responded to corporate numbers coming into the market.

Daily Performance Analysis

The began the week on a positive note buoyed by late day rally in the share of Dangote Cement Plc. The composite index, NSE ASI advanced by 2.02 per cent to end the day’s session at 23,977.10 with corresponding market capitalisation on N8.24 trillion. Market outcome was also influenced by the gains in other bellwether stocks such as Guaranty Trust Bank Plc and Unilever Nigeria Plc, which outweighed the losses recorded by Nigerian Breweries Plc, Guinness Nigeria Plc and Zenith Bank Plc. A breakdown of activity chart shows marked decline in volume and value traded, declining by 45 per cent and 16 per cent respectively as investors staked N1.69 billion on over 190 million units of stocks in 2,748 deals.

The market inched up again on Tuesday as the NSE ASI increased marginally by 0.02 per cent to close at 23,981.09. The appreciation recorded in the share prices of Dangote Cement Plc, UACN Plc, Transcorp Plc, Zenith Bank Plc, and FBN Holdings Plc were mainly responsible for the gain recorded in the value of the index. Similarly, the market capitalisation marginally appreciated by 0.02 per cent to close at N8.247 trillion. The total value of stocks traded on the floors of the NSE on the day was N1.52 billion, down by 10.31 per cent from N1.69 billion traded the previous day.

The Nigerian bourse closed positive for the third consecutive day on Wednesday with the NSE ASI gaining 0.64 per cent to end the day at 24,135.40 with market capitalisation improving by N53 billion to close at N8.3 trillion. Market direction was influenced by gains in Dangote Cement Plc, Guaranty Trust Bank Plc and Nigerian Breweries Plc offsetting losses in Zenith Bank Plc, Unilever Nigeria Plc and Seven-Up Bottling Company Plc. Activity level trended upward with 89 per cent and 20 per cent increase in volume and value traded which closed at c.N1.82bn and over 320million units respectively.

Stock prices rallied further on Thursday as the NSE ASI increased by 2.19 per cent to be at 24,664.89. The appreciation recorded in the share prices of Dangote Cement Plc, Forte Oil Plc, UBA Plc, Zenith Bank Plc, and Access Bank Plc were mainly responsible for the gain recorded in the market that day.

Similarly, the market capitalisation appreciated by 2.19 per cent to close at N8.48 trillion, compared with the appreciation of 0.64 per cent recorded the prior day to close at N8.30 trillion. The total value of stocks traded on the floors of the NSE on the day was N3.29 billion, up by 80.58 per cent.

The market maintained its posi- tive momentum for the fifth day, as the NSE ASI increased by 0.10 per cent to close at 24,689.69. In the same vein, the market capitalisation appreciated by 0.10 per cent to close at N8.49 trillion

The appreciation recorded in the share prices of Dangote Cement Plc, Forte Oil Plc, Lafarge Africa Plc, Cadbury Nigeria Plc, and Guinness Nigeria Plc contributed to the positive run.

Market Turnover

Meanwhile, a total of 1.407 billion shares worth N17.277 billion in 14,914 deals were traded last week by investors on the floor of the exchange in contrast to a total of 5.087 billion shares valued at N18.488 billion that exchanged hands the previous week in 16,711 deals.

The Financial Services Industry led the activity chart with 1.252 billion shares valued at N7.169 billion traded in 8,451 deals; thus contributing 88.98 per cent and 41.49 per cent to the total equity turnover volume and value respectively.

The Oil and Gas Industry followed with 50.714 million shares worth N5.338 billion in 1,520 deals. The third place was occupied by the Consumer Goods Industry with a turnover of 37.534 million shares worth N3.117 billion in 2,473 deals.

Guaranty Trust Bank Plc, FCMB Group Plc and Wema Bank Plc, which were the top three most traded in volume terms, accounted for 667.292 million shares worth N4.256 billion in 2,114 deals, contributing 47.44 per cent and 24.63 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 115,641 units of Exchange Traded Products (ETPs) valued at N1.285 million executed in 28 deals, compared with a total of 34,089 units valued at N604,908.34 transacted the previous week in 34 deals.

A total of 39,340 units of both State (1) and Federal Government Bonds (2) valued at N44.246 million were traded in 3 deals, compared with a total of 4,190 units valued at N4.884 million transacted the previous week in 5 deals.

Gainers and Losers

Meanwhile, the price movement chart of the NSE showed that a total of 26 equities appreciated in price during the week, lower than 30 equities of the previous week. Thirty equities depreciated in price, lower than 40 equities of the previous week, while 143 equities remained unchanged, higher than 120 equities recorded in the previous week.

The top 10 gainers were: Forte Oil Plc (N42.00), Dangote Cement Plc (N22.20), Mobil Oil Nigeria Plc (N11.97), Seplat Plc (N9.11), PZ Indusries Plc (N1.00) Airline Services and Logistics Plc (10 kobo), Caverton (eight kobo), and Eterna (seven kobo), Cutix ( six kobo) FCMB Plc (four kobo).

Conversely, the top 10 losers included: Conoil Plc (N4.01), Glaxo Smithkline Plc (N2.27), UAC Nigeria Plc (N1.39), May & Baker Plc (12 kobo), Ecobank Transnational Incorporated Plc (95 kobo), Zenith Bank Plc (63 kobo), and Champion Breweries Plc (15 kobo), Parma-Deko Plc, AxaMansard Insurance (11 kobo each), Pfizer Plc ( eight kobo),