Nigerian equities surged to their highest level this year and reversed the negative overhang at the stock market as major scramble for shares by foreign and domestic investors spurred the equities market to a net capital gain of N881 billion in the past 11 days. Equities closed last week with net capital gain of N677 billion, equivalent to a week-on-week average gain of 7.46 per cent, as the rousing price appreciation that started in the last days of April gathered momentum.
Aggregate market value of all quoted companies on the Nigerian Stock Exchange (NSE), which opened on Thursday April 27, 2017 at N8.865 trillion, rose consecutively for 10 days to N9.825 trillion on Thursday May 11, 2017, representing a net capital gain of N960 billion. The market, however, witnessed a tinge of profit-taking last Friday May 12, 2017, dropping the aggregate market value of quoted companies by N79 billion to N9.746 trillion. Thus, the net capital gain for the 11-day period dropped to N881 billion.
The All Share Index (ASI)- the benchmark index for the Nigerian stock market, also rose consecutively from opening index of 25,620.94 points on Thursday April 27 to 28,423.70 points by last Thursday May 11 and dipped marginally to close at the weekend at 28,192.46 per cent. This represented average gain of 10.04 per cent over the 11-day period.
Market analysts were unanimous that three factors were the main drivers of the rally. These included the steady performance of most quoted companies in 2016 and improvement in first quarter 2017 earnings, renewed interest by foreign investors as foreign exchange crisis eases off and positive macroeconomic outlook.
Moody`s Investors Service, a leading global rating agency, in its latest reports said it expected Nigeria`s real Gross Domestic Product (GDP) to grow by 2.5 per cent in 2017, after a contraction of 1.5 per cent in 2016. Nigeria’s GDP growth is expected to double to 4.0 per cent in 2018, according to Moody. Moody also maintained its stable outlook on the Nigerian banking sector.
Investors in the Nigerian stock market, who had been wriggled under losses, are back in the green. Average year-to-date return reversed from negative to a positive return of 4.90 per cent at the weekend. All sectoral indices showed that investors have generally recovered from losing position to various gains.
The NSE 30 Index, which tracks the 30 most capitalised stocks at the Exchange, showed year-to-date return of 7.96 per cent. Banking stocks were ahead with year-to-date return of 19.51 per cent, providing positive real return on investment after adjustment for inflation. The NSE Industrial Goods Index has so far this year appreciated by 6.36 per cent. The NSE Oil and Gas Index has returned 3.07 per cent while the NSE Insurance Index and the NSE Consumer Goods Index showed modest year-to-date gain of 0.89 per cent and 0.93 per cent respectively.
With more than four gainers to every loser, the stock market was particularly on the high last week. Aggregate market value of all quoted equities rose from the week’s opening value of N9.069 trillion to close the week at N9.746 trillion. The ASI, which doubles as sovereign equities index for Nigeria, also rallied from the week’s index-on-board of 26,235.63 points to close at the week at 28,192.46 points.
There were 57 gainers against 13 losers last week compared to 43 gainers and 16 losers recorded in the previous week. May & Baker Nigeria recorded the highest gain, in percentage terms, of 32 per cent to close at N1.28. Ecobank Transnational Incorporated rose by 22.5 per cent to N9.80. Fidson Healthcare followed with a gain of 21.5 per cent to close at N1.92. PZ Cussons Nigeria appreciated by 20.4 per cent to close at N18.06. Oando rose by 20.2 per cent to close at N8.62. Unity Bank chalked up 20 per cent to close at 60 kobo. Eterna rose by 17.9 per cent to N3.89. Diamond Bank appreciated by 17.7 per cent to close at N1 while Nigerian Breweries rose by 17.1 per cent to N149 per share.
Turnover more than doubled as investors flooded the market with open orders to buy shares at whatever available prices. Total turnover last week stood at 3.26 billion shares worth N28.74 billion in 25,370 deals compared with a total of 1.15 billion shares valued at N10.44 billion traded in 16,676 deals two weeks ago.
The banking-led financial services sector remained the dominant sector with 83.4 per cent and 60 per cent of total turnover volume and value respectively. Turnover in the financial services sector stood at 2.72 billion shares valued at N17.23 billion in 15,103 deals. The consumer goods sector occupied a distant second on the activities chart with 185.75 million shares worth N6.6 billion in 3,817 deals. The conglomerates sector ranked third with 156.01 million shares worth N385.43 million in 1,340 deals.
The three most active stocks were FBN Holdings Plc, FCMB Group Plc and Zenith International Bank Plc. The three most active stocks accounted for 1.42 billion shares worth N8.19 billion in 5,117 deals, representing 43.6 per cent and 28.5 per cent of the total equity turnover volume and value respectively.
Also traded during the week were a total of 948 units of Exchange Traded Products (ETPs), valued at N16,591 in 14 deals compared with a total of 20 units valued at N110,000 traded in a deal in the previous week.
In the government bonds sector, a total of 5,201 units of Federal Government bonds valued at N5.40 million were traded in three deals compared with a total of 1,582 units valued at N1.61 million traded in 10 deals two weeks ago.
On the negative side, Jaiz Bank led the losers with a drop of 9.1 per cent to close at N1. Seplat Petroleum Development Company followed with a loss of 5.9 per cent to close at N400. Newrest ASL declined by 5.6 per cent to N4.69. Neimeth International Pharmaceuticals dropped by 5.4 per cent to 53 kobo while BOC Gases dipped by 4.8 per cent to close at N3.35 per share.
Market analysts at SCM Capital Markets said there was likelihood of a continuation of the profit-taking trend that started at the weekend in the next week as investors seek to lock in recent price gains.
Source: The Nation
