Stock Market’s Year-to-date Growth Falls to 13% on Profit Taking

It was a bearish week at the stock market as continuing profit taking drove the market to close 3.39 per cent lower. Bargain hunting had lifted the market from a negative close back to the bulls’ territory the previous week. However, the positive performance could not be sustained last week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell by 3.39 per cent to close at 43,127.92. Similarly, market capitalisation shed N541.9 billion to be at N15.4 trillion. The market recorded losses in the all the five trading days. By the close of trading last week, the month-to-date and year-to-date returns stood at -2.74 and 12.77 per cent respectively.

Despite the decline suffered last week, analysts at the Cordros Capital Limited said favourable relative valuations of the NSE, coupled with strengthening fundamentals, support attractiveness of the equities market and suggest legroom for gains.

They added that the market will be also be driven to positive territory as investors take position ahead of quarter four of 2017 earnings.

Daily Performance

The equities market opened on a bearish note with the market capitalisation declining by N72.1 billion to close at N15.88 trillion, while the NSE ASI fell by 0.85 per cent to close at 44,261.72.

But the decline was most fuelled by depreciation recorded in the share prices of Dangote Cement, Lafarge Africa, FBN Holdings, Access Bank Plc, United Bank for Africa Plc and FBN Holdings Plc.

In all, 34 stocks depreciated, while 26 others appreciated. UNIC Insurance Plc led the price losers with 8.7 per cent, followed by Consolidated Hallmark Insurance with 8.3 per cent, while Skye Bank Plc and LASACO Assurance Plc went down by 5.5 per cent each.

On the positive side, AIICO Insurance Plc led the price gainers with 10 per cent, trailed by Prestige Assurance Plc with 8.3 per cent. Linkage Assurance Plc chalked up 5.8 per cent, just Beta Glass Plc garnered 4.9 per cent.

In terms of sectoral performance, three depreciated compared with two that appreciated. The NSE Industrial Goods Index led with a decline of 1.3 per cent primarily on the back of price depreciation in Dangote Cement Plc (-2.9 per cent). It was trailed by the NSE Oil & Gas Index that went down by 1.3 per cent due to losses recorded by Forte Oil (-4.9 per cent). Similarly, profit taking in NASCON Allied Industries Plc and Dangote Flour Mills Plc dragged the NSE Consumer Goods Index down by 0.7 per cent.

On the other hand, the NSE Insurance Index led the advancers with 1.6 per cent as buy interest in AIICO Insurance Plc (+10 per cent),and African Prudential Plc (+4.0 per cent) and Linkage Assurance Plc (+5.9%) buoyed performance. The NSE Banking Index equally rose by 1.4 per cent as investors took position in Zenith Bank and GTBank.

The market depreciated further on Tuesday depressing the index by 0.87 per cent to close at as the index lost 43,877.30. The depreciation recorded in the share prices of Zenith Bank, Transcorp, FBN Holdings, Access Bank and UBA were mainly responsible for the decline.

Sector performance followed the bearish trend as all indices closed in the red. The NSE Banking Index was the biggest loser, going down by 2.1 per cent. The Industrial Goods Index followed with a fall of 1.0 per cent, while the NSE Insurance Index declined 0.5 per cent.

The NSE Oil & Gas Index shed 0.4 per cent while the NSE Consumer Goods Index closed 0.3 per cent lower.

The bears extended their control of the market for the third day on Wednesday. Consequently, the equities capitalisation depressed by N399 billion in three days. Specifically, the the NSE ASI went down by 0.77 per cent, while market capitalisation shed N121.5 billion yesterday alone.

The negative performance resulted partly from decline recorded in the share prices of Access Bank, Dangote Cement, FBN Holdings, Nigerian Breweries and International Breweries Plc.

According to analysts at Meristem Securities Limited, the negative close “can be attributed to continued sell-offs witnessed on counters across all sectors. We expect this mood to be sustained through the remaining trading days this week, pushing the market to a negative close at the end of the week.”

A total of 40 stocks depreciated while added value. UNIC Insurance Plc led the price losers with 9.5 per cent, trailed by Skye Bank Plc with 8.9 per cent, while Wema Bank Plc shed 8.8 per cent.

Law Union & Rock Insurance Plc, May & Baker Nigeria Plc, Double One Plc, ABC Transport Plc and Consolidated Hallmark Insurance Plc depreciated by 5.0 per cent apiece. Sterling Bank Plc and Learn Africa Plc closed 4.9 per cent and 4.7 per cent lower respectively.

However, the price gainers were led by Caverton Offshore Support Group Plc with 9.7 per cent, trailed by Linkage Assurance Plc with 6.7 per cent. LASACO Assurance Plc chalked up 5.8 per cent, just as Unilever Nigeria Plc and Red Star Express Plc appreciated by 4.9 per cent and 4.3 per cent in that order.

NAHCO Plc, UACN Property Development Company Plc, Champion Breweries Plc and Honeywell Flour Mills Plc garnered 3.8 per cent, 3.0 per cent and 2.8 per cent respectively.

In terms of sectoral performance, four of the sectors declined compared to one that appreciated. The lone gainer was the NSE Banking Index that appreciated by 0.6 per cent on gains recorded by in Zenith Bank Plc (+2.6 per cent) and UBA (+1.2 per cent).

Conversely, the NSE Industrial Goods Index led losers with a decline of 1.1 per cent due to losses in Dangote Cement Plc (-2.2 per cent). The NSE Insurance Index and NSE Oil & Gas Index shed 0.8 per cent each.

The bearish sentiments remained on Thursday. But the volume of trading surged at the stock market boosted by huge transaction in the shares of Sterling Bank Plc. The volume of trading jumped by 337 per cent to 2.221 billion shares worth N7.495 billion exchanged in 5,468 deals, up from506.299 million shares worth N4.571 billion traded in 6,155 deals the previous day.

Sterling Bank Plc accounted for 78.5 per cent as investors transacted 1.745 billion shares of the bank for N3.839 billion in 108 deals. The high demand for the shares of the financial institution also lifted its price by 4.6 per cent from N2.13 to N2.23.

But the market maintained its negative momentum as the NSE ASI declining 0.49 per cent to close at 43,326.89. Similarly, market capitalisation shed N75.8 billion to close lower at N15.5 trillion. Accordingly, the month-to-date and year-to-date returns fell to -2.29 per cent and 13.29 per cent in that order.

Skye Bank Plc recorded the highest price decline of 8.9 per cent, trailed by Consolidated Hallmark Insurance Plc with 4.8 per cent. Nestle Nigeria Plc shed 5.0 per cent, just as Diamond Bank Plc and AIICO Insurance Plc lost 4.8 per cent and 4.7 per cent respectively.

Unity Bank Plc led the price gainers with 9.3 per cent, trailed by Forte Oil Plc with 4.9 per cent, just as Royal Exchange Plc followed with 4.7 per cent. Sterling Bank Plc chalked up 4.6 per cent, while Cadbury Nigeria Plc and Custodian Plc garnered 4.3 per cent and 4.2 per cent respectively.

Meanwhile, sector performance was mixed as three of the five closed in the red. The NSE Consumer Goods Index led with a decline of 2.0 per cent followed by the NSE Insurance Index with 0.6 per cent.

Market Turnover

In terms of turnover, investors traded 4.426 billion shares worth N24.236 billion in 29,573 , up from 3.268 billion shares valued at N28.123 billion that exchanged hands last week in 35,761 deals.

The Financial Services Industry led the activity chart with 4.005 billion shares valued at N16.501 billion traded in 19,035 deals; thus contributing 90.49 per cent and 68.08 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 167.723 million shares worth N464.656 million in 1,568 deals. The third place was occupied by Consumer Goods Industry with a turnover of 137.657 million shares worth N5.334 billion in 4,982 deals.

Trading in the top three equities namely – Sterling Bank Plc, Skye Bank Plc and FCMB Group Plc accounted for 2.520 billion shares worth N5.277 billion in 3,000 deals, contributing 56.95 per cent and 21.77 per cent to the total equity turnover volume and value respectively.

Price Gainers and Losers

Meanwhile, a total of 64 equities depreciated compared with 42 of the previous week, while only 23 others appreciated as against 49 of the previous week.

Consolidated Hallmark Insurance Plc led the price losers with 27.1 per cent, trailed by Skye Bank Plc with 25.1 per cent. UNIC Diversified Holdings Plc shed 21.7 per cent, while Multiverse Mining & Exploration Plc went down by 16.6 per cent. WAPIC Insurance Plc and Wema Bank Plc fell by 14.6 per cent and 14 per cent respectively.

Other top price losers for the week included: FBN Holdings Plc (13.3 per cent); Japaul Oil & Maritime Services Plc (1.25 per cent); Fidelity Bank Plc (11.8 per cent) and Berger Paints Plc (9.5 per cent).

On the positive side, Linkage Assurance Plc led the price gainers, recording 25 per cent, trailed by Caverton Offshore Support Group Plc with 20.1 per cent. Prestige Assurance Plc chalked up 16.6 per cent, just as Unity Bank Plc and Transnationwide Express Plc garnered 10.2 per cent and 9.8 per cent in that order. Other top price gainers were: Red Star Express Plc (9.1 per cent); Continental Reinsurance Plc (7.2 per cent); Glaxosmithkline Consumer Nigeria Plc ( 6.3 per cent), Jaiz Bank Plc (6.06 per cent) and Eterna Plc (5.6 per cent.