Equities Gain N1.5tn On Sustained Rally

The Nigerian equities market recorded an unprecedented surge of 10.2 per cent last week against the backdrop of rising oil prices and strong portfolio flows. The Nigerian Stock Exchange (NSE) All-Share Index(ASI) hit a 10-month high of 42,898.90, while market capitalisation added N1.5 trillion to close higher at N15.368 trillion. Having recovered from a three-year decline last year, the market has remained bullish in 2018, recording gains in the first two weeks on sustained positive sentiments.

According to analysts, the bulls came out strong this week, as the market recorded a whopping 10.21 return in the week, the highest weekly gain since the third of April 2015.

“Notable gains were recorded in the banking and industrial goods space, as the sectors recorded no losers in the week. While we expect some profit taking in the week ahead, we do not rule out the possibility of bandwagon effect driving the market to a positive close,” Meristem Securities Limited said. A review of the sectoral performance of the market showed that the NSE Industrial Goods Index led with 12.98 per cent. This was followed by the NSE Banking Index, which appreciated by 12.88 per cent.

Others are: NSE Oil & Gas Index (7.46 per cent), NSE Insurance Index (6.5 per cent), and NSE Consumer Goods Index (5.6 per cent).

Daily Performance

Right from Monday, the market showed early signs of a bullish week when the market opened on a positive note with the index rising by 2.38 per cent to close at 39,849.65. The rally was sustained on Tuesday, lifting the index to cross the 40,000 threshold to close at 40,362.97. This followed persistent rally in the market on positive sentiments. The sustained demand lifted the market by 1.29 per cent to close at 40,362.97, while market capitalisation added N182.7 billion to close N14.36 trillion.

In all, 47 stocks appreciated yesterday, while only seven depreciated. Although gains recorded in the share prices of FBN Holdings, Zenith Bank, Transcorp, Access Bank and GTBank were mainly responsible for rise in the index, Dangote Flour Mills Plc led the price gainers’ chart.

Flour Mills chalked up 10 per cent, trailed by FCMB Group Plc with 9.05 per cent, while WAPIC Insurance Plc garnered 7.4 per cent. Diamond Bank Plc and Honeywell Flour Mills Plc went up by 6.5 per cent and 5.3 per cent in that order.

Diamond Bank was recently appointed as a Forum Member Adviser to the World Economic Forum (WEF). According to a statement, Diamond Bank is the first Nigerian company and only the second African company to become a WEF Adviser.

“Membership is on an invitation only basis and is extended only to the most dynamic businesses, who are using tech-driven disruption to drive growth,” the statement explained.

Commenting on the appointment, the Chief Executive Officer of Diamond Bank, Uzoma Dozie, said: “I am delighted that Diamond Bank was invited to join as a Forum Member Adviser of the WEF as it is testament to our status as one of Nigeria’s leading innovators. I am also thrilled to be attending this year’s annual meeting in Davos, where I will be presenting my views on the three key areas of financial inclusion, Nigeria’s positive outlook and the future of banking.”

Meanwhile, UACN Property Development Company Plc led the price losers with 4.7 per cent, trailed by NAHCO with 4.6 per cent. Nestle Nigeria Plc shed 3.3 per cent, while Union Bank of Nigeria Plc closed 2.6 per cent lower.

Commenting on the market performance, analysts at FSDH said: “Sector performance was largely positive with some of the banking stocks leading the gainers, majority of which traded at the upper limit and closed on bid. Although market sentiment remains strong and positive, the bullish momentum will likely slowdown in subsequent sessions with profit taking.”

Similarly, analysts at Meristem Securities said: ”Positive sentiments dominated the market today, in line with our expectations. The market performance was driven by increased investor appetite recorded across many counters, particularly on Dangote Cement and the heavily weighted stocks in the banking sector.”

The market remained upbeat on Wednesday as the index rose 3.6 per cent to close at 41,816.11. Similarly, the market capitalisation appreciated by same margin to close at N14.88 trillion.

The appreciation recorded in the share prices of Dangote Cement, Zenith Bank, GT Bank, FBN Holdings and Nigerian Breweries was mainly responsible for the gain recorded in the index.

The three most actively traded stocks were Transcorp (184.72 million shares), Diamond Bank (136.61 million shares) and Access Bank (121.95 million shares).

“Sector performance was broadly bullish as all sectorial indices closed positive. Given the significant level of price appreciation in some stocks, we expect profit taking to set in to end the week. However, market outlook remains positive in the short-term supported by bargain hunting and positive investors’ sentiment,” stockbrokers said.

The market continued with its rally, lifting the market capitalisation to an all-time high of N15.317 trillion, while the index rose to hit 42,041.54,.

A total of 56 stocks added value, while 10 depreciated. Honeywell Flour Mills Plc led the led the gainers’ chart, rising by 9.97 per cent. It was trailed by Cement Company of Northern Nigeria Plc with 9.96 per cent, while Champion Breweries Plc, Fidelity Bank Plc and Wema Bank Plc garnered 9.92 per cent, 9.92 per cent and 9.6 per cent in that order.

Conversely, University Press Plc led the price losers with 4.7 per cent, trailed by Meyer Plc with 4.4 per cent. Learn Africa Plc, NEM Insurance Plc and Berger Paints Nigeria Plc shed 4.0 per cent, 3.1 per cent and 2.6 per cent respectively.

Also, volume of trading appreciated as investors traded 1.162 billion shares worth N17.375 billion, up from 1.089 billion shares valued at N13.296 billion the previous day.

The three most actively traded stocks were Transcorp (208.77 million shares), Diamond Bank (149.70 million shares) and Zenith Bank (129.43 million shares).

Performance across sectors was bullish as all indices closed in the green. The NSE Banking Index was the top performer, rising 4.4 per cent on the back of buying interest across board.

The NSE Industrial Goods Index trailed with 3.3 per cent growth, while the NSE Consumer Goods Index rose 2.3 per cent. The NSE Oil & Gas Index went up by 2.7 per cent, while the NSE Insurance Index ended 1.7 per cent higher.

Profit taking set on Friday causing the market to halt its gaining streak. The index fell by 0.33 per cent on the last day of the week. However, that was not enough to stop the market from recording another bullish with as the index ended with a weekly gain of 10.2 per cent.

Market Turnover

Meanwhile, the equities turnover was significantly high as investors traded 5.021 billion shares worth N68.974 billion in 41,542 deals last week, up from 2.417 billion shares valued at N18.813 billion that exchanged hands the previous week in 20,874 deals.

The Financial Services Industry led the activity chart with 3.417 billion shares valued at N31.649 billion traded in 24,375 deals, thus contributing 68.06 per cent and 45.89 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 894.357 million shares worth N2.180 billion in 3,032 deals. The third place was occupied by Consumer Goods Industry with a turnover of 380.493 million shares worth N26.243 billion in 7,408 deals.

Trading in the top three equities namely – Transnational Corporation of Nigeria Plc, Diamond Bank Plc and FBN Holdings Plc accounted for 1.975 billion shares worth N7.473 billion in 8,549 deals.

Price Gainers and Losers

The price movement chart showed that 66 equities appreciated in price during the week, higher than 55 of the previous week, while Seven equities depreciated in price, lower than12 equities of the previous week.

Honeywell Flour Mills Plc led the price gainers with 39.6 per cent, trailed by Skye Bank Plc with 37.7 per cent. Champion Breweries Plc went up 36.5 per cent, just as Sterling Bank Plc and Diamond Bank Plc garnered 35.5 per cent and 34.4 per cent in that order. Eterna Plc chalked up 34.1 per cent just as Conoil Plc FMCB Group Plc, Cement Company of Northern Nigeria Plc and Unity Bank Plc 33.6 per cent, 33.4 per cent and 32.3 per cent respectively.

Conversely, Meyer Plc led the price losers with 12.8 per cent, trailed by GlaxoSmithkline Consumer Nigeria Plc with 2.7 per cent. Dangote Sugar Refinery Plc shed 2.6 per cent, while UACN Property Development Company Plc, Flour Mills of Nigeria Plc, Nestle Nigeria Plc and Nigerian Aviation Handling Company Plc fell by 2.2 per cent, 1.6 per cent, 0.6 per cent and 0.22 per cent respectively.