Nigerian Equities Market Rebounds on Bargain Hunting
Nigerian equities market witnessed a rebound wednesday after two days of bearish as the Nigerian Stock Exchange (NSE) All-Share Index appreciated by 0.40 per cent to close at 37933.86.
The market had been bearish Monday on profit taking. However, the trend changed yesterday as investors commence bargain hunting. Consequently, the index rose by 0.40 per cent, while the market capitalisation added N53.4 billion to settle at N13.5 trillion.
The positive performance was boosted by gains recorded in the share prices Zenith Bank Plc, United Bank for Africa Plc, Nestle, GTBank and Seplat. In all, 23 stocks appreciated while 22 depreciated.
Champion Breweries Plc, Linkage Assurance Plc and Seplat led the price gainers with 5.0 per cent apiece. NAHCO Plc trailed with 4.8 per cent, just as Learn Africa Plc, Unilever Nigeria Plc and Honeywell Flour Mills Plc added 4.7 per cent, 4.5 per cent and 2.3 per cent respectively.
Conversely, Flour Mills of Nigeria Plc led and PZ Cussons Nigeria Plc led the price 4.9 per cent apiece.
The price loss by FMN is coming despite the company’s plan to raise fresh capital. Flour Mills of Nigeria recently applied to the NSE to raise about N39.856 billion from the existing shareholders. The funds would be raised through the issuance of 1,476,142,418 ordinary shares of 50 kobo each at N27 per share Rights Issue to existing shareholders on the basis of nine new shares for every 16 shares already held.
The company had been contemplating raising fresh capital to ease the debt burden and reduce high interests. However, the company’s stockbrokers, Stanbic IBTC Stockbrokers Limited, formally applied to the NSE for the Rights Issue.
On the other hand, PZ Cussons suffered a price decline despite recording a profit for the half year ended November 30, 2017, compared with a loss in the corresponding of 2016.
The company recorded a turnover of N41.123 billion, up by 23 per cent compared with N33.302 billion in the corresponding period ended November 30, 2016.
PZ Cussons reaped the benefits of the stable foreign exchange as its forex loss declined by 47.9 per cent to N2.572 billion from N4.938 billion in 2016. However, interest paid on borrowings remain high with net cost of finance jumping by 957 per cent to N58.458 million to N501.183 million in 2016.
Consequently, profit before tax stood at N868.683 million compared with a loss of N425.177 million, while PAT improved to N589 million as against a loss of N288.9 million in 2016.
Source: THISDAY
