Impressive Q1 Earnings Fail to Lift Equities Market

The Nigerian equities market remained bearish last week as investors continued to comb the market to extract profit from equities that recorded gains in the past weeks. The market, which shed 0.9 per cent the previous week, was expected to bounce back following impressive first quarter (Q1) results by some companies.

Despite the improved Q1 results, weaker appetite for industrial and consumer goods and banking bellwethers such as Dangote Cement, Nigerian Breweries and Ecobank Transnational Incorporated (ETI) dragged the market into negative territory. Consequently, the Nigerian Stock Exchange (NSE) All-Share Index declined by 1.26 per cent to close at 25,189.37, while market capitalisation closed lower at N8.716 trillion.

Similarly, all other Indices finished lower during the week with the exception the NSE ASeM, NSE Oil/Gas and the NSE Pension Indices that appreciated by 0.06 per cent, 0.60 per cent and 0.36 per cent respectively.

Daily Market performance

The Nigerian equities market ended the first trading session of the week in the red as the profit taking of the previous week persisted. The NSE ASI fell by 1.1 per cent to close at 25,218.12. Also, the market capitalisation shed N104.8 billion to close at N8.7 trillion. Dangote Cement Plc, Nestle Nigeria Plc, Ecobank Transnational Incorporated (ETI), Guaranty Trust Bank Plc (GTBank), were mainly responsible for the negative performance on Tuesday.

A further analysis of the market showed that all the sectoral indices trended southwards except the NSE Oil & Gas Index that appreciated by 0.5 per cent on the back of gains recorded by Seplat (+2.6 per cent) and Forte Oil (+1.1 per cent). Forte released its financial results for first quarter ended March 31, 2017, showing a decline of 7.3 per cent in revenue but a surge of 97.5 per cent in profit. The NSE Banking Index led the (-1.4 per cent) led losses following decline in prices of ETI (-5.0 per cent), GTBank (-0.8 per cent), UBA (-2.8 per cent), Union Bank (-5.0 per cent) and Fidelity Bank (-9.1 per cent).

Similarly, the NSE Industrial Goods Index fell 1.1 per cent due to selloffs in Dangote Cement (-2.4 per cent) while the NSE Consumer Goods Index dipped 0.7 per cent as Nestle (-2.9 per cent) and Unilever (-0.3 per cent) closed lower.

Investors traded 254.95 million shares worth N2.45 billion, up by 7.41 per cent from N2.28 billion recorded the previous trading day. The most actively traded sectors were: Financial Services (211.88 million shares), Healthcare (12.82 million shares) and Conglomerates (8.31 million shares), while the three most actively traded stocks were: Diamond Bank (51.80 million), GT Bank (40.88 million shares) and FBN Holding (20.66 million shares).

The equity market recovered on Wednesday with the NSE ASI appreciated by 0.49 per cent to close at 25,331.77, while market capitalisation ended higher at N8.77 trillion. Gains recorded by FBN Holdings, GTBank, Zenith Bank, Stanbic IBTC and Nestle lifted the market. Turnover stood at 322.29 million shares worth N2.53 billion, compared with N2.45 billion invested the previous day.

As usual, the most actively traded sector was the Financial Services (275.64 million shares). The Conglomerates followed with 29.04 million shares while Consumer Goods accounted for 7.25 million shares.

In terms of sectoral performance, two sectors appreciated. Bargain hunting in GTBank (+1.3 per cent), Zenith Bank (+0.7 per cent) and Access Bank (+1.0 per cent) drove the NSE Banking Index 0.8 per cent northwards.

Similarly, the NSE Consumer Goods Index rose 0.8 per cent on the back of Nestle (+3.0 per cent) and PZ (+4.6 per cent) while the NSE Industrial Goods Index increased by 0.01 per cent.

Conversely, the NSE Insurance Index declined 0.4 per cent due to selloffs in Continental Reinsurance Plc (2.4 per cent) and Mansard (-0.7 per cent).

The NSE ASI shed 0.19 per cent to close at 25,282.75 as the market slipped back into the bears’ territory after one day of gain. Bearish sentiments in bellwethers such as Dangote Cement (-0.6 per cent) and ETI (-4.9 per cent) offset gains in Nigerian Breweries (+0.8 per cent), Stanbic IBTC (+2.6 per cent) and Seplat (+1.3 per cent).

However, two sectoral indices closed in the green. The Oil & Gas Index rose by 0.5 per cent following appreciation in Seplat (+1.3 per cent). The NSE Consumer Goods trailed with a gain of 0.1 per cent on the back of gains in Nigerian Breweries (+0.8 per cent), Honeywell Flour Mills (+4.1 per cent) and Nestle (+0.04 per cent). On the flip side, the NSE Industrial Goods Index shed 0.3 per cent on loss by Dangote Cement (-0.6 per cent).

The NSE Banking Index depreciated by 0.3 per cent as a result of price depreciation in Zenith Bank (-0.6 per cent) and further sell pressure on ETI (-4.9 per cent) following its disappointing full year 2016 earnings reported on Tuesday. The NSE Insurance index (-0.1 per cent) also trended southwards,

Market turnover Just like the previous week, it was another four-day trading week last week as the Federal Government of Nigeria declared Monday 17th of April, 2017 as Public Holiday in commemoration of the Easter celebrations.

A total turnover of 896.748 mil- lion shares worth N5.918 billion in 11,185 deals were traded this week by investors on the floor of the Exchange in contrast to a total of 1.191 billion shares valued at N6.037 billion that exchanged hands in 11,820 deals the previous week.

The Financial Services Industry remained the most active with 688.971 million shares valued at N3.637 billion traded in 6,374 deals, thus contributing 76.83 per cent and 61.46 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 105.516 million shares worth N207.182 million in 944 deals. The third place was occupied by Consumer Goods Industry with a turnover of 45.172 million shares worth N1.139 billion in 1,569 deals.

Also traded during the week were a total of 100 units of Exchange Traded Products (ETPs) valued at N6,799.00 executed in one deal compared with a total of 16 units valued at N1,088.00 transacted the previous week in one deals.

A total of 1,311 units of Federal Government Bonds valued at N1.346 million were traded this week in 7 deals, compared with a total of 4,800 units valued at N4.892 million transacted two weeks ago in 10 deals.

Price Gainers and Losers

Meanwhile, 24 equities appreciated in price during the week, higher than the 13 equities of the previous week, while 31 equities depreciated in price, lower than the 37 equities of the previous week.

Transcorp Plc led the price gainers with 22.7 per cent, trailed by African Prudential Registrars Plc with 9.7 per cent. Stanbic IBTC Bank Plc and Diamond Bank Plc chalked up 9.1 per cent and 7.1 per cent respectively, just as Unilever Nigeria Plc and FBN Holdings Plc garnered 6.7 per cent and 6.5 per cent in that order.

Other top price gainers included: Nigerian Aviation Handling Company Plc (5.0 per cent); Newrest ASL Nigeria Plc (4.8 per cent); Jaiz Bank Plc (4.7 per cent) and PZ Cussons Nigeria Plc (4.5 per cent).

Conversely, Fidelity Bank Plc led the price losers with 20.5 per cent, followed by Seven-Bottling Company Plc with 14.2 per cent. ETI went down by 13.4 per cent, just as Okomu Oil Palm Plc, NASCON Allied Industries Plc and Union Bank of Nigeria Plc shed 9.5 per cent, 9.4 per cent, and 9.3 per cent in that order. NPF Microfinance Bank Plc, Custodian and Allied Plc, UAC of Nigeria Plc and Eterna Plc declined by 9.3 per cent, 5.6 per cent, 5.0 per cent and 4.9 per cent respectively.