Stock Market Down 1.7% as Bears Maintain Dominance

The bears returned to the equities market Negative sentiments pervaded the equities market in the first week of the second half (H2) of the year leading to a decline of 1.71 per cent in the Nigerian Stock Exchange (NSE) All-Share Index (NSE ASI).

Having ended the first half(H1) year with a marginal growth of 0.09 per cent, it was expected that bargain hunting would set in. However, the bears dominated the market last week and led to a negative close.

Although earnings season that would see the release of H1 corporate earnings is around the corner, political concerns is making most investors to adopt cautious approach to trading.

Consequently, the NSE ASI fell by 1.71 per cent to be at 37,625.59. Similarly, market capitalisation depreciated to N13,630 trillion. All other indices finished lower with the exception of the NSE Insurance Index that appreciated by 0.53 per cent.

Daily Performance The market began the H2 2018 on a negative note on Monday with the NSE ASI declining 0.87 per cent to close at 37,946.92. Although bargain hunting was expected in anticipation of the earnings season, the bears remained in control on the first trading of the H2. The negative performance stemmed from continuous profit taking in bellwether counters, which made 21 stocks to depreciate while 16 appreciated.

However, Forte Oil Plc led the price losers with 9.7 per cent, trailed by Honeywell Flour Mills Plc with 9.6 per cent, while Cornerstone Insurance Plc shed 8.5 per cent. Daar Communications Plc and Japaul Oil & Maritime Services Plc went down by 8.3 per cent apiece. McNichols Plc and Mutual Benefits Assurance Plc declined 8.3 per cent each.

On the positive side, AIICO Insurance Plc led the price gainers with 9.8 per cent, followed by C & I Leasing Plc with 9.6 per cent. Unity Bank Plc and Double One Plc advanced by 9.2 each, just as Neimeth International Pharmaceuticals Plc and Veritas Kapital Assurance Plc chalked up 3.5 per cent and 3.4 per cent respectively. Oando Plc garnered 3.1 per cent.

“The market remained largely bearish as profit taking activities continued across most sectors in the Nigerian bourse. However, as earnings season has kicked off, we envisage a positive close this week as investors take position ahead of earnings release on counters with dividend expectation,” analysts at Meristem Securities Limited had stated on the first trading session of last week.

Also, activity level weakened as volume and value traded dipped 47.9 per cent and 68.2 per cent to 244.5 million shares and N1.9 billion respectively. The most traded stocks by volume were Sterling Bank (100.4 million shares), FBN Holdings Plc (23.7 million shares) and Wema Bank Plc (16.9 million shares) while Dangote Cement Plc (N384.3 million ), FBN Holdings (N251.1 million ) and GTBank (N236.9 million) were the top traded stocks by value

Sector performance was also bearish as four of the five indicators fell. The NSE Oil & Gas Index emerged lone gainer, rising by 0.8 per cent. Conversely, the NSE Industrial Goods Index shed the most, falling 1.0 per cent.

The bear run continued on Tuesday as the NSE ASI fell 0.90 per cent to close lower at 37, 605.12 . That followed the persisted negative sentiments among investors. The decline for the second day pushed the year-to-date(ytd) decline of the market to 1.6 per cent as at Tuesday. On the second trading session, a total of 28 stocks depreciated, while 13 appreciated. Market analysts on that day, attributed the negative performance to losses suffered by heavy counters such as Dangote Cement Plc, Zenith Bank Plc, GTBank Plc, FBN Holdings Plc among others.

However, on that day, Jaiz Bank Plc led the price losers with 10 per cent, followed by Omoluabi Mortgage Bank Plc with 9.8 per cent. Cornerstone Insurance Plc shed 9.3 per cent, while May & Baker Nigeria Plc and A.G Leventis Nigeria Plc went down by 8.8 per cent and 6.1 per cent respectively.

Other top price losers included: Fidelity Bank Plc (5.9 per cent); Cadbury Nigeria Plc and Honeywell Flour Mills Plc (5.3 per cent) Flour Mills of Nigeria Plc and Honeywell Flour Mills Plc, which have released their full year results ended March 31, 2018 were also among the price losers.

On the positive side, Prestige Assurance Plc led with 9.4 per cent as investors went bargain hunting in insurance sector. Royal Exchange Plc trailed with 9.0 per cent, just as Redstar Express Plc and Custodian Investment Plc chalked up 7.4 per cent. Mutual Benefits Assurance Plc and Beta Glass Plc and Unilever Nigeria Plc garnered 5.8 per cent, 4.8 per cent, 4.7 per cent in that order.

The sustained bearish trading at the stock market led to a decline of 2.0 per cent in the three days, from Monday to Wednesday.

Commenting on the market performance, analysts said selling pressure across counters were sustained, as investors continue to sell down on large cap stocks across the market.

“However, the losses were moderated by the buying pressures across the banking sector, as the favoured counters within the sector topped the value and volume charts for the day,” they said. Forte Oil Plc and MCNichols Plc led the price losers with 10 per cent apiece trailed by Omoluabi Mortgage Bank Plc that shed 9.3 per cent. Conoil Plc went down by 8.3 per cent, just as Caverton Offshore Support Group Plc lost 8.2 per cent.

Market analysts said lack of information from Forte Oil Plc regarding its planned business restructuring was weakening demand for the stock. According to a stockbroker, after shareholders approved to proposal, nothing has been heard on the issue.

The shareholders had approved the company’s to restructure its business by divesting its upstream services , power generating businesses in Nigeria and downstream business in Ghana.

After three days of negative performance, the bulls returned on Thursday to influence a first gain since the start of H2 of 2018.

“Counters like Nigerian Breweries Plc, Dangote Cement Plc, GTBank Plc, amongst others recorded gains that drove the market into the positive region. These gains arose, as investors bought into the tickers, given the attractive prices,” analysts at Meristem Securities Limited had commented at the end of last Thursday’s trading session.

On that day, a total of 23 stocks appreciated compared with 20 others that depreciated. Multiverse Mining Plc led the price gainers with 10 per cent, trailed by Consolidated Hallmark Insurance Plc with 9.6 per cent. Japaul Oil and Maritime Services Plc garnered 8.3 per cent.

May & Baker Nigeria Plc and Sterling Bank Plc chalked up 5.7 per cent each, just as C & I Leasing Plc, Mutual Benefits Assurance Plc and Jaiz Bank Plc added 5.3 per cent, 5.1 per cent and 4.7 per cent respectively. Cement Company of Northern Nigeria Plc and Regency Alliance Assurance Plc advanced 4.7 per cent and 4.1 per cent in that order.

Conversely, Capital Oil Plc led the bears, shedding 9.1 per cent, followed by N.E.M Insurance Plc that appreciated by 8.8 per cent. Champion Breweries Plc went down by 8.00 per cent, just as Double One Plc, Unity Bank Plc and University Press Plc depreciated by 7.8 per cent, 7.2 per cent and 6.4 per cent respectively.

Market Turnover The volume and value of investment also fell as investors staked N16.594 billion on 1.842 billion shares in 18,941 deals, down from N21.582 billion invested in 2.0 billion shares in 18,534 deals week the previous week.

However, the Financial Services Industry led the activity chart with 1.018 billion shares valued at N10.906 billion traded in 10,092 deals, thus contributing 55.3 per cent and 65.7 per cent to the total equity turnover volume and value respectively.

The Services Industry followed with 313.481 million shares worth N1.861 billion in 782 deals. The third place was occupied by Natural Resources Industry with a turnover of 304.922 million shares worth N61.366 million in 82 deals. Trading in the top three equities namely – United Bank for Africa Plc, Multiverse Mining and Exploration Plc and Nigerian Aviation Handling Company Plc (measured by volume) accounted for 912.300 million shares worth N5.308 billion in 1,025 deals, contributing 49.5 per cent and 31.9 per cent to the total equity turnover volume and value respectively. Price Gainers and Losers Meanwhile, 45 stocks depreciated during the week, higher than 32 of the previous week, while 27 equities appreciated in price during the week, lower than 32 in the previous week.

Forte Oil Plc led the price losers with 19.7 per cent, trailed by Omoluabi Mortgage Bank Plc with 18.3 per cent, while McNichols Plc went down by 17.3 per cent. Cornerstone Insurance Company Plc and MRS Oil Nigeria Plc shed 17.1 per cent and 16.6 per cent respectively.

Other top price losers included: Honeywell Flour Mills Plc (11.7 per cent); Soverign Trust Insurance Plc (10 per cent); Double One Plc (9.8 per cent);Capital Oil Plc (9.0 per cent) and Transcorp Plc (8.5 per cent).

On the other hand, Mutual Benefits Assurance Plc led the price gainers for the week, chalking up 21.6 per cent, followed by Multiverse Mining and Exploration Plc with 20 per cent.

Unity Bank Plc garnered 14 per cent, while University Press Plc added 9.4 per cent, just as Royal Exchange Plc and C & I Leasing Plc appreciated by 9.1 per cent and 8.7 per cent in that order.

Other top price gainers were: AIICO Insurance Plc (8.2 per cent); Julius Berger Nigeria Plc (7.2 per cent); Consolidated Hallmark Insurance Plc (6.9 per cent) and N.E.M Insurance Company Plc (6.2 per cent).