These are certainly good times for equities investors as their investments continue to add value on sustained high demand. The market attracted N23.18 billion invested in 3.100 billion shares in 33,677 deals, showing an increase of about 22.5 per cent compared to the previous week’s performance.
Also, the market, which rose by 7.9 per cent the previous week, appreciated further last week with the Nigerian Stock Exchange (NSE) All-Share Index (NSE ASI) rising by 6.07 per cent to close at 33,276.68. Similarly, market capitalisation hit a new high of N11.504 trillion and by the close of trading on Friday, the market has recorded a year-to-date (YTD) growth of 23.82 per cent. Apart from the ASI that rose by 6.07 per cent, all other Indices finished higher during the week with the exception the NSE ASeM Index that depreciated by 1.74 per cent while the NSE Insurance Index closed flat. The NSE Oil & Gas led with 17.11 per cent, followed by the NSE Industrial Goods Index, which rose by 7.96 per cent. The NSE Banking Index was up 4.91 per cent, while the NSE Consumer Goods Index closed 3.86 per cent higher. Assessing the market performance, analysts at Meristem Securities Limited said positive investor sentiments continued into the week, as the Nigerian equities market was characterised by intense bullish run, as reflected by the price gains witnessed on a number of counters.
“As expected, there were pockets of profit taking activities on some counters that had recorded significant share price appreciation in the past weeks. The upbeat mood however, outweighed the sell pressure. In the coming week, while we expect the positive sentiments to continue, we do not rule out the possibility of profit taking, as most counters are currently trading at their year highs,” they said.
Daily Market performance
Trading at the stock market resumed on Monday with indicators recording record high. While market capitalisation posted its highest daily gain of N417 billion in two years to cross the N11 trillion psychological line, the index rose 3.9 per cent to close at 32,578.38, which is a 23-month high. Investors sustained the positive momentum into the ninth consecutive session as they continued to show interest in large and mid-cap stocks. However, the Monday’s unprecedented rally was helped by Dangote Cement Plc, which added N290 billion to its capitalisation to close N3.578 trillion. That was about 69 per cent of the gain recorded in the market on that day. A stockbroker, Mr. David Andori said the rally being witnessed in the market would be sustained, given positive economic indicators.
“When an economy is in recession, investors move from equities to fixed securities and when the economy begins to recover, investors move back to equities market. That is what we are seeing now. Apart from occasional profit taking that we may see, the positive trend would remain for a significant period of time,” Andori said.
The market had surged N1.285 trillion, improving from N8.913 trillion at the end of April to N10.198 trillion at the end of May 2017.. The rally was triggered by the introduction of the new foreign exchange window for investors and exporters (I&E) by the Central Bank of Nigeria (CBN). Apart from the new FX window by the CBN, analysts said investors were also responding to more favourable economic indicators.
“Looking at the strong growth in the unaudited results that quoted companies released for the period January – March 2017 and the improvement in the macroeconomic environment, we believe the equity market is ready for a recovery in 2017,” analysts at FSDH Research had said. According to them, the increase in the supply of foreign exchange to meet the input requirements of manufacturing companies should increase their production activities and revenue in the current financial year. “The stability in the macroeconomic environment and the strong earnings of quoted companies should attract the needed liquidity into the market. Consequently, the equity market should record a strong recovery in the year 2017,” they stated.
After nine consecutive days of bullish trading, the market recorded a negative close on Tuesday due to the activities of profit taking. The index to 32,200.38, while market shed N130.7 billion to close at N11.1 trillion. Bellwether such as Dangote Cement Plc, Mobil Oil Nigeria Plc, GTBank Plc and Unilever Nigeria Plc contributed to the decline. Mobil Oil Nigeria led the price losers, shedding 9.7 per cent, trailed by NPF Microfinance Bank and Dangote Cement Plc with 5.0 per cent apiece. Unilever Nigeria Plc fell by 4.5 per cent, while AXA Mansard Insurance Plc and Livestock Feeds Plc shed 4.4 per cent each. On the other hand, Sterling Bank Plc escaped the bears, the lead the gainers with 9.7 per cent. May & Baker Nigeria Plc trailed with 9.6 per cent. Champion Breweries Plc, Diamond Bank Plc appreciated by 9.1 per cent and 5.7 per cent respectively. UACN Property Development Company Plc, chalked up 5.1 per cent. Ashaka Cement Plc, UAC of Nigeria Plc and Seplat Petroleum Development Company Plc garnered 5.0 per cent apiece. Performance across sectors was mixed as three of indices appreciated led by the NSE Consumer Goods Index that rose by 0.9 per cent account of price appreciation in Nestle (+1.1 per cent) and Dangote Sugar (+5.0 per cent).Similarly, upticks in Access Bank (+0.5 per cent) and ETI(+0.8 per cent) lifted the NSE Banking Index to close 0.3 per cent higher. Similarly, the Oil & Gas index gained 0.2 per cent on the back of gains in Seplat (+5.0 per cent) and Oando (+2.4 per cent). Conversely, the NSE Industrial Goods Index fell 0.8 per cent due to profit taking in Dangote Cement (-5.0 per cent) while the NSE Insurance Index went down by 0.2 per cent following depreciation by AXA Mansard Insurance (-4.4 per cent) and Custodian and Allied Plc (-1.5 per cent).
Contrary to expectations that the profit taking would continue on Wednesday, the market shrugged off losses recorded the previous day and closed positively as the index appreciated by 1.51 per cent to close at 32,686.72. The positive performance was bolstered by gains in Dangote Cement, Flour Mills of Nigeria, Seplat, Forte Oil among others. Consequently, the index rose to close higher at 32,686.72, while market capitalisation ended at N11.30 trillion. In all, 26 stocks added value, led by International Breweries Plc with 10.22 per cent, trailed by Forte Oil Plc, with 10.2 per cent, while Dangote Sugar Refinery Plc chalked up 9.9 per cent. Market analysts said the renewed demand for International Breweries may not be unconnected with its plan to merge with two other companies, Intafact Beverages Limited and Pabod Breweries Limited. The three companies have Anheuser-Busch Inbev SA as a common shareholder. According to International Breweries Plc, the proposed merger was considered and approved at the company’s board meeting on June 2, 2017. The Osun State based brewing firm said the merger would benefit all stakeholders, particularly shareholders.
“The proposed merger is expected to generate both revenue and cost synergies, enhanced operational efficiencies, better resource management and more streamlined operations. On the receipt of regulatory approvals (including the NSE and Securities and Exchange Commission), all parties will take further steps to consummate the proposed merger including obtaining the approval of their respective shareholders at separate court-ordered meetings,” the company said.
An analysis of the market performance across sectors indicated that three of the five indices advanced. The NSE Oil & Gas Index outperformed with a 3.0 per cent gain on account of appreciations in Forte Oil Plc (+10.2 per cent) and Seplat (+5.0 per cent). According to analysts, Seplat’s bullish close could be linked to the lifting of Force Majeure on Forcados export terminal which is positive for production volumes, forward earnings and cash flow of the company. Similarly, the NSE Industrial Goods Index rose by 2.0 per cent due to renewed interest in Dangote Cement (+4.8 per cent) just as the NSE Consumer Goods Index appreciated by 0.6 per cent on the back of gains in Dangote Sugar Refinery (+10.0 per cent) and International Breweries (+10.2 per cent). Conversely, the NSE Insurance Index extended losses, down 1.4 per cent due to decline in AIICO Insurance (-3.6 per cent) and AXA Mansard (-3.0 per cent) while the NSE Banking Index went down by 0.6 per cent on account of losses in Zenith Bank (-0.8 per cent) and GTBank (-0.8 per cent). The bullish trading continued on Thursday as the index as the Nigerian Stock Exchange (NSE) All-Share Index rose further by 0.77 per cent to close at 32,937.98. That performance improved the year-to-date growth of the market to 22.56 per cent. Market capitalisation added N86.9 billion to close higher at N11.4 trillion.
A total of 46 stocks appreciated while 14 declined, while volume and value of transactions rose by 5.8 per cent and 18.8 per cent in that order. Forte Oil Plc and International Breweries Plc led the price gainers with 10.2 per cent apiece. Cadbury Nigeria Plc rose by 10.15 per cent just as Seplat Plc, Dangote Flour Mills Plc, and UAC of Nigeria Plc added 10.14 per cent, 10.13 per cent and 10.1 per cent per cent respectively. May & Baker Nigeria Plc, Diamond Bank Plc, Access Bank Plc and Transcorp Plc garnered 9.7 per cent, 9.5 per cent, 7.3 per cent and 5.3 per cent in that order. Similarly, Transcorp Hotels Plc appreciated by 5.0 per cent as investors reacted to the information of that the company has reopened its executive floors and lounge of its flagship Transcorp Hilton Abuja after renovation. According to the company, the reopening marks a milestone in the on-going $100 million renovation project of the historic and award winning 5-star hotel, leading up to its 30th anniversary commemoration this year. Commenting on the development, Managing Director/CEO, Transcorp Hotels Plc, Valentine Ozigbo, had said: “Our guests have grown to expect nothing less than the very best from us. That includes the pinnacle of customer service, overall comfort, and a level of aesthetic appeal rivaled by no other hotel in Nigeria. The complete overhaul of the executive floor and lounge is a testament to our commitment to delivering extraordinary experience to our guests.”
Also commenting on the new executive rooms and suites, the General Manager of Transcorp Hilton Abuja, Etienne Gailliez said: “We are excited to attain this milestone of our renovation project. Our Guests are really going to love the truly impressive transformation of the executive floor guest rooms and lounge. We are proud to work with owners who have a deep understanding of our industry and embrace our brand culture of creating a rewarding experience for our guests.” The bulls consolidated their gain in the equity market on Friday as the benchmark index rose further by 1.03 per cent to close at 33,276.68. The appreciation recorded in the share prices of Seplat, Forte Oil, Transcorp, FBN Holdings and PZ Cussons were mainly responsible for the gain recorded in the Index
Meanwhile, an analysis of the 3.100 billion shares worth N29.180 billion traded in 33,677deals showed the Financial Services Industry remained the most active. The sector recorded 2.577 billion shares valued at N16.524 billion traded in 19,831 deals, thus contributing 83.15 per cent and 56.63 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 173.544 million shares worth N985.456 million in 1,620 deals. The third place was occupied by Consumer Goods Industry with a turnover of 161.347 million shares worth N3.540 billion in 5,275 deals. Trading in the top three equities namely – FBN Holding Plc, Diamond Bank Plc, and Access Bank Plc accounted for 1.084 billion shares worth N6.522 billion in 7,095 deals, contributing 34.98 per cent and 22.35 per cent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 40.317 million units of Exchange Traded Products (ETPs) valued at N178.841 million executed in 12 deals compared with a total of 52 units valued at N13,802.70 transacted last the previous week in six deals. Similarly, a total of 10,860 units of Federal Government Bonds valued at N10.196 million were traded last week in 10 deals, compared with a total of 3,786 units valued at N3.806 million transacted two weeks ago in four deals.
Price Gainers and Losers
A total of 59 equities appreciated in price last week, lower than the 61 equities of the previous week, while 21 equities depreciated in price, higher than 12 equities of the previous week. May & Baker Nigeria Plc led the price gainers, chalking up a record 58.6 per cent in one week to close at N2.84. Cadbury Nigeria Plc trailed with 43.8 per cent, while Forte Oil Plc and Sterling Bank Plc garnered 39.7 per cent and 34.2 per cent in that order. Seplat appreciated by 33.8 per cent, just as International Breweries Plc added 33.2 per cent. Other top priced gainers were: Honeywell Flour Mills Plc(32.0 per cent); Dangote Sugar Refinery Plc (31.0 per cent);Champion Breweries Plc (30.8 per cent) and Diamond Bank Plc (29.7 per cent).
Conversely, University Press Plc led the price losers, shedding 9.6 per cent, trailed by Jaiz Bank Plc with 7.6 per cent. Thomas Wyatt Nigeria Plc and Unilever Nigeria Plc went down by 7.4 per cent and 5.1 per cent in that order. Eterna Plc and A.G Leventis Nigeria Plc fell by 5.1 per cent and 5.0 per cent respectively. Others were: Union Dicon Salt Plc (4.9 per cent); Tripple Gee and Company Plc (4.8 per cent); Cutix Plc and Golden Guinea Breweries Plc (4.7 per cent apiece).