NSE Round Up! Nigerian equities rally N261b gain, heighten investor optimism

Nigerian equities sustained an all-week rally to extend the latest streak of gains to 12 consecutive days as investors maintained positive sentiment and optimism that the corporate earnings for the first half of this year will be reassuring.

Key benchmark indices at the Nigerian Stock Exchange (NSE) at the weekend showed that investors recorded net capital gain of N261 billion during the week, equivalent to week-on-week average gain of 2.28 per cent. The rally was driven by widespread bargain-hunting, especially within the influential large-cap stocks.

Aggregate market value of all quoted equities at the NSE rose from its week’ s opening value of N11.464 trillion to close at N11.725 trillion. The All Share Index (ASI)-the value-based common index that tracks share prices at the Exchange, also rose consecutively from the week’s opening index of 33,261.66 points to close at 34,020.37 points.

Average year-to-date return for Nigerian equities now stands at 26.59 per cent, underlining the current attractiveness of quoted equities against most fixed-income securities.

Sectoral indices showed that most investors traded on the seller’s side with considerable gain. The large-cap-driven NSE Industrial Goods Index recorded the highest gain of 6.97 per cent. The NSE Consumer Goods Index followed with a gain of 2.97 per cent. The NSE 30 Index, which tracks the 30 most capitalised stocks, recorded a week-on-week return of 2.71 per cent. The NSE Banking Index posted above average return of 2.38 per cent. The NSE Oil and Gas Index inched up by 0.39 per cent. The NSE Lotus Islamic Index, which serves as gauge for Islamic portfolios, rose by 1.48 per cent while the NSE Pension Index, which tracks stocks specially screened in line with pension investment guidelines, rose by 2.42 per cent. However, the NSE Insurance Index declined by 2.81 per cent.

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There were 36 advancers against 33 decliners last week. Skye Bank Plc, which submitted executive summary of its transformation and received extension of concession from the Central Bank of Nigeria, topped the gainers’ list, in percentage terms, with a gain of 19.7 per cent to close at 73 kobo. Unilever Nigeria followed with a gain of 16.1 per cent to close at N38.32. Lafarge Africa rose by 15.4 per cent to close at N60. Neimeth Pharmaceuticals International appreciated by 13.58 per cent to close at 92 kobo while Okomu Oil Palm rose by 8.37 per cent to close at N64.50.

On the negative side, AXA Mansard Insurance led the decliners with a drop of 8.97 per cent to close at N2.03. AG Leventis followed with a drop of 7.69 per cent to close at 72 kobo. Nigerian Aviation Handling Company declined by 6.02 per cent to close at N2.81 per share. Continental Reinsurance dropped by 5.80 per cent to close at N1.30 while Presco dipped by 5.48 per cent to close weekend at N61.

Total turnover stood at 3.63 billion shares worth N34.89 billion in 19,834 deals compared with a total of 1.27 billion shares valued at N13.99 billion traded in 19,385 deals. Financial services sector, the traditional dominant sector, was again atop the activity chart with 3.39 billion shares valued at N28.71 billion in 11,237 deals; representing 93.55 per cent and 82.30 per cent of the total equity turnover volume and value respectively. The consumer goods sector occupied a distant second with 79.47 million shares worth N3.42 billion in 3,101 deals while the conglomerates sector placed third with a turnover of 70.18 million shares worth N113.49 million in 872 deals.

The three most active stocks were United Bank for Africa Plc, Continental Reinsurance Plc and Niger Insurance Plc , which jointly accounted for 2.52 billion shares worth N20.83 billion in 1,191 deals, representing 69.3 per cent and 59.7 per cent of the total equity turnover volume and value respectively.

Also traded during the week were a total of 40 units of Exchange Traded Products (ETPs) valued at N493 in four deals compared with a total of 25,540 units valued at N2.646 million traded in 10 deals in the previous week.

In the sovereign debt segment, a total of 13,465 units of Federal Government bonds valued at N14.49 million were traded in 10 deals compared with a total of 2,977 units valued at N2.946 million traded in 11 deals in the previous week.

Globally, investors showed considerable appetite for quoted equities across the global advanced and emerging markets. In United States of America, the twin indices- the S & P 500 and NASDAQ appreciated by 0.6 per cent and 1.2 per cent respectively. In United Kingdom, the UK FTSE Index rose by 1.5 per cent. China’s Shanghai Composite Index appreciated by 0.5 per cent. Russia’s RTS Index rallied 1.5 per cent gain. Hong Kong’s Hang Seng Index rose by 1.38 per cent. South Africa’s FTSE Index also climbed by 1.7 per cent while Ghana Stock Exchange Composite Index surged by 8.1 per cent. However, many other markets, especially in Europe, closed negative. France’s CAC Index dropped by 0.7 per cent. Germany’s XETRA DAX Index declined by 1.5 per cent. Japan’s NIKKEI Index slipped by 0.1 per cent. Brazil’s IBOVESPA Index dropped by 0.8 per cent. India’s Bombay Stock Exchange Index declined by 0.5 per cent while Egypt’s EGX Index dropped by 0.8 per cent.

Most analysts remained positive about the outlook of the Nigerian equities citing expected steady improvement in corporate earnings in the first half. Most quoted companies are expected to submit their half year results this week, or before the expiration of Monday July 31 deadline.

“Whilst we envisage some profit taking in the early trading sessions of next week in stocks that have witnessed continuous appreciation this week, we expect that as more positive half-year 2017 corporate scorecards are released, investor sentiment will remain largely positive,” Afrinvest Securities-a Lagos-based dealer at the NSE, stated.

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