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Market Digest Nigeria

Business

Investors scramble for banks’ shares

Investors were all out for banking stocks last week as Nigerian equities sustained all-session bullish rally to reach their highest index point in recent period. Benchmark indices at the Nigerian Stock Exchange (NSE) showed week-on-week gain of 1.85 per cent at the equities market, equivalent to a net capital gain of N157 billion in the four-day trading week.
The recovery at the stock market was evidently driven by a week-long scramble for banking stocks, which turned the banking sector into a seller’s market with most transactions closing on premium. The NSE Banking Index, which tracks the banking sector, recorded average week-on-week gain of 3.64 per cent, almost a double of the average return at the stock market. Banking stocks dominated the activities chart with two of the most capitalised banks-Zenith Bank International and FBN Holdings, accounting for 25 per cent and 30.4 per cent of the total turnover volume and value respectively. The Nation had reported considerable improvement in banks’ corporate earnings in the first quarter of this year, which many analysts believed was the major factor for the renewed investors’ appetite for banks’ shares.
With nearly three gainers for every loser, aggregate market value of all quoted equities rose from the week’s opening value of N8.913 trillion to close the week at N9.069 trillion, an increase of 1.75 per cent. The All Share Index (ASI)-the benchmark index that tracks prices at the Exchange, also trended from the index on board of 25,758.51 points to close at 26,235.63 points, representing a week-on-week gain of 1.85 per cent. The difference between the market capitalisation and the ASI was due to delisting of four companies during the week. The delisted companies included UTC, MTECH Communications, Beco Petroleum and MTI Plc. With the sustained rally, the negative overhang at the market reduced as the average year-to-date return improved to -2.38 per cent. There were 43 gainers against 16 losers last week compared to 38 gainers and 25 losers recorded in the previous week. A total of 114 stocks have remained unchanged for the past two weeks. Fidson Healthcare recorded the highest gain, in percentage terms, of 43.6 per cent to close at N1.58. Oando followed with a gain of 24 per cent to close at N7.17 while Livestock Feeds rose by 16.2 per cent to close at 86 kobo. Zenith Bank was the most active stock with a turnover of 176.77 million shares valued at N2.78 billion in 1,957 deals. FBN Holdings followed with 112.18 million shares worth N396.44 million in 1,408 deals. Altogether, the two most active stocks accounted for 288.95 million shares valued at N3.18 billion in 3,365 deals, representing 25 per cent and 30.4 per cent of total turnover volume and value for the week.
Total turnover during the four days of trading at the NSE stood at 1.15 billion shares worth N10.44 billion in 16,676 compared with a total of 1.33 billion shares valued at N9.67 traded in 16,300 deals two weeks ago.
Financial services sector, the traditional dominant sector, remained atop activities’ chart with 813.02 million shares valued at N6.90 billion in 10,298 deals; representing 70.45 per cent and 66.13 per cent of the total equity turnover volume and value respectively. The oil and gas sector occupied a distant second with 106.57 million shares worth N1.06 billion in 1,356 deals while the services sector ranked third with a turnover of 90.94 million shares worth N188.20 million in 660 deals.
Also traded during the week were a total of 20 units of Exchange Traded Products (ETPs) valued at N110,000 in a deal compared with a total of 533 units valued at N32,204 traded in 15 deals two weeks ago. In the debt segment, a total of 1,582 units of Federal Government Bonds valued at N1.608 million were traded in 10 deals compared with a total of 4,705 units valued at N3.934 million traded in four deals two weeks ago.
“The impressive market breadth recorded this week as well as broad-based nature of the two-week long rally – with mid and small-cap stocks also advancing – suggests investor sentiment is beginning to improve,” analysts at Afrinvest Securities stated.
Analysts said the market could continue on the upswing over in the meantime, although profit-taking transactions could moderate performance in early trades this week.

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