In A Month On Continuing Investor Apathy, Equities Market Declines
The persistent bear run at the stock market led the Nigerian Stock Exchange (NSE) All-Share Index (ASI) to decline by 4.9 per cent in November, as it closed at 30,874.17. Similarly, the market capitalisation of equities went down by same margin or N583 billion to close at N11.271 trillion.
The decline in November was higher than that of October when the market shed 0.9 per cent. Analysts said while the market had maintained a downtrend for months, its fall was marginal in October due to positive impact of the nine months corporate earnings that hit the market in that month.
However, the absence of immediate incentive in the market made investor apathy to continue in November and made more shares to tank. Consequently, the NSE ASI closed the with a decline of 4.9 per cent. And 2.54 per cent of the decline was recorded last week.
Apart from NSE ASI that went down by 2.54 per cent last week, all other indices finished lower with the exception of the NSE ASeM, NSE Insurance and NSE Consumer Goods Indices that finished higher by 0.09 per cent, 4.71 per cent and 0.08per cent respectively.
Commenting on the performance, analysts at Cordros Capital Limited said: “We reiterate our negative outlook for the equities market in the short-to-medium term, amidst political concerns surrounding the 2019 elections, and the absence of a positive market trigger. However, positive macroeconomic fundamentals remain supportive of a recovery in the long term.”
Daily Market Performance
Looking at the daily performance of the market, the week started off on a negative note as the ASI dipped 0.3 per cent due to sell offs in market bellwethers such as Dangote Cement Plc, Nigerian Breweries Plc and Guaranty Trust Bank Plc on Monday. That negative performance was sustained in the subsequent three trading days. For instance, the market declined 1.3 per cent on Tuesday, and 0.5 per cent on Wednesday and 1.3 per cent on Thursday. However, it rebounded on Friday with growth of 0.9 per cent as gains in Dangote Cement and Nigerian Breweries Plc bolstered the performance.
In Africa, there was a mixed performance as three of six indices tracked were positive. Kenya’s NSE 20 appreciated by 1.1 per cent, followed by Morocco Casablanca MASI that went up by 0.6 per cent. Similarly, Mauritius SEMDEX Index rose 0.4 per cent. On the negative side, apart from Nigerian NSE ASI that shed 2.5 per cent, Egypt EGX30 shed 2.6 per cent. Ghana’s GSE Composite shed 0.1 per cent.
In Asia and the Middle East, there was a bearish performance in the market as four of five markets recorded losses. Turkey’s BIST 100 recorded the worse return of 2.6 per cent to lead laggards, followed by Thailand SET index 2.0 per cent. Saudi Arabia’s Tadawul ASI went down by 1.2 per cent, while Qatar’s DSM 20 Index went down by 0.3 per cent. United Arab Emirate’s ADX General Index emerged as the lone gainer with a return of 4.5 per cent.
The performance of the developed markets was largely bullish across board. In the US markets, the S&P 500 and the NASDAQ closed the week higher, up 4.0 per cent and 4.8 per cent respectively. Similarly, the UK FTSE gained 0.5 per cent while France’s CAC 40 added 1.0 per cent. Germany’s XETRA DAX gained 0.5 per cent, while Japan’s Nikkei 225 appreciated by 3.3 per cent, just as Hong Kong’s Hang Seng rose 2.2 per cent.
Also, across the BRICS markets, performance was largely positive as all indices trended northwards. The largest gain was recorded in Brazil’s Ibovespa, that went up by 4.1 per cent. India’s BSE Sens gained 3.5 pe cent. Russia’s RTS gained 1.2 per cent, just as South Africa’s FTSE/JSE All Share and China’s Shanghai Composite grew by 0.8 per cent and 0.3 per cent in that order.
Meanwhile, investors traded 1.199 billion shares worth N14.277 billion in 15,841 last week compared with 1.282 billion shares valued at N23.142 billion that exchanged hands in 11,467 deals the previous week.
However, the Financial Services Industry remained the most active leading the activity chart with 963.315 million shares valued at N7.536 billion traded in 8,871 deals. Thus, the sector contributed 80.38 per cent and 52.79 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 83.001 million shares worth N4.213 billion in 2,802 deals. The third place was Industrial Goods Industry with a turnover of 60.782 million shares worth N1.976 billion in 1,639 deals.
Trading in the top three equities namely Diamond Bank Plc, Access Bank Plc, and Universal Insurance Plc, accounted for 512.535 million shares worth N1.367 billion in 1,437 deals, contributing 42.7 per cent and 9.5 per cent to the total equity turnover volume and value respectively.
Price Gainers and Losers
The price movement chart displayed 25 equities that appreciated in price during the week, lower than 30 in the previous week, while 41 equities depreciated in price, higher than 24 of the previous week.
Continental Reinsurance led the price gainers chart with 33.3 per cent. The gain followed market reaction to the proposed acquisitioned of the company by foreign parent firm.
Continental Reinsurance African Investments Limited (CRe Investments), which is the parent firm of Continental Reinsurance (CRe Nigeria)Plc, had proposed to buy all the outstanding shares of CRe Nigeria. According to company, CRe Investments is making this offer in order to initiate a much needed restructuring exercise for CRe Nigeria, with a view to consolidating the CRe Nigeria’s operations and repositioning it for enhanced competitiveness in the global insurance market.
Beta Glass Plc closed the week as the second highest price gainer with 9.9 per cent, while Cutix Plc and Glaxosmithkline Consumer Nigeria Plc chalked up 9.4 per cent. Mutual Benefits Assurance Plc and CAP Plc went up 8.7 per cent and 7.8 per cent respectively.
Other top price gainers included: PZ Cussons Nigeria Plc (7.0 per cent); AXA Mansard Insurance Plc ( 6.3 per cent)Double 11 Plc (6.0 per cent) and Nigerian Aviation Handling Company Plc ( 4.9 per cent).
Conversely, Diamond Bank Plc led the price losers with 31.5 per cent, trailed by Prestige Assurance Plc with 30.3 per cent. Unity Bank Plc and Associated Bus Company Plc shed 12.9 per cent. A.G Leventis Nigeria Plc and Veritas Kapital Assurance Plc depreciated by12.0 per cent.
Other top price losers were: NEM Insurance Plc (11.3 per cent); Seplat Petroleum Development Company Plc, Law Union and Rock Insurance Plc (9.6 per cent) and John Holt Plc (9.0 per cent).