Nigeria: Stock Market Sheds N434 Billion as Apathy Persists

opinion

By Goddy Egene and Eromosele Abiodun
The market capitalisation of Nigerian equities market crashed to a 20-month low while the benchmark index remained below the 34,000 points threshold as equities continued to bleed amid exit investors.
The equities market has remained unstable for some time partly due to weak macroeconomic outlook as the price of Crude Oil, the primary determinant of the strength of the Nigerian economy, fell to record lows- to $70.11 a barrel. Also, the forthcoming elections have amplified the risk assessment of investors as they succumb to the 'herd mentality.' The Nigerian equities market had the previous week recorded a growth of 1.82 per cent as bargained swooped on over sold stocks. However, the market turned bearish in the first week of the last month of the year with the market capitalisation shedding N434 billion to stand at N10.970 trillion. The Nigerian Stock Exchange (NSE) All-Share Index went dwom by 3.81 per cent to close at 33,228.29. Similarly, all the indices edged lower during the week with exception of the NSE Insurance index that rose by 5.82 per cent and the NSE ASeM index that closed flat. Traders told THISDAY that there may be no hope in sight as global headwinds still persists. "The decision by Organisation of Petroleum Exporting Countries (OPEC) not to cut target production further reinforced the general view of the likelihood of a further decline in price of crude oil. This combined with the heightened political tension as seen in the National Assembly incidence would continue to weigh on market sentiments in the near term. We see a flattish to negative performance in the immediate future, "said analysts at Investment One Limited.
Summary of daily performance The market had started on a negative note at the resumption of trading last week as the exchange's benchmark index depreciated by 1.28 per cent to close at 33,914.25 from 34,543.05 attained the previous Friday. Market capitalisation also decreased to N11.20 trillion from N11.40 trillion the previous Friday. Trading activities also decreased by 36.95 per cent as investors bought 213.61 million shares worth N4.44 billion, in 4, 7698 deals, compared to 338.80 million shares worth N6.38 billion, in 4,283 deals exchanged the previous Friday. A total number of 17 stocks gained on the bourse on the day while 33 stocks declined leaving 65 stocks unchanged. Mansard Insurance Plc emerged the toast of investors as it appreciated by 8.25 per cent to close at N3.41, followed by Cadbury Nigeria Plc with a 4.99 per cent gain to close at N45.67. Others on the gainers chart include; Costain (W.A) Plc, Presco Plc and RT Briscoe Plc. The market closed on a negative note again on Tuesday as the benchmark index depreciated by 1.07 per cent to close at 33,550.73 points, compared with the depreciation of 1.82 per cent recorded on Monday. The depreciation in the Index on the day was as a result of the losses recorded in the share prices of some highly capitalised stocks such as: Zenith Bank Plc, FBN Holdings Plc, Guaranty Trust Bank Plc, Diamond Bank Plc and Dangote Sugar Refinery Plc. Similarly, the market capitalisation depreciated by 1.07 per cent to close at N11.08 trillion, compared with the depreciation of 1.82 per cent recorded on Monday to close at N11.20 trillion. The total value of the stocks traded on Tuesday on the floors of the NSE was N4.58 billion, up by 3.21per cent from N4.44 billion traded the previous day. There was no respite on Wednesday as the index depreciated by 0.88 per cent to close at 33,255.67 from 33, 550.73 attained on Tuesday. Market capitalisation also decreased to N11.98 trillion from N11.08 trillion the previous trading day. However, trading activities increased by 18.33 per cent as investors bought 258.75 million shares worth N4.79 billion, in 3,965 deals, compared to 218.66 million shares worth N4.58 billion, in 4,675 deals exchanged on Tuesday. Stanbic IBTC Holdings Plc, Guaranty Trust Bank Plc and Dangote Cement Plc were the most actively traded stocks on the exchange on the day in terms of volume. A total number of 22 stocks gained on the bourse on Wednesday while 19 stocks declined leaving 76 stocks unchanged. The bears sustained their hold on Thursday as the market closed on a negative note. At the close of business for the day the NSE index depreciated by 0.24 per cent to close at 33,175.78 , compared with the depreciation of 0.88 per cent recorded on Wednesday. Similarly, the market capitalisation depreciated by 0.24 per cent to close at N10.95 trillion. The depreciation in the share prices of FBN Holdings Plc, Lafarge Africa Plc, Guaranty Trust Bank Plc, Access Bank Plc and Seplat Plc was largely responsible for the poor performance. The total value of the stocks traded on the day on the floors of the NSE was N7.69 billion, up by 60.50 per cent from N4.79 billion traded the previous day. At the close of business last Friday, the NSE index and market capitalisation propped up by 16 basis points each amid decline in investment volumes and values. However, the volume of transactions decreased 45.77 per cent while value of transactions fell 54.40 per cent.

Market turnover A further analysis of activities for last week showed that a total of 1.526 billion shares worth N24.992 billion in 21,344 deals were traded by investors on the floor of the Exchange in contrast to a total of 2.092 billion shares valued at N28.234 billion that exchanged hands the previous week in 22,865 deals. The Financial Services Industry (measured by volume) led the activity chart with 1.177 billion shares valued at N14.232 billion traded in 12,082 deals; thus contributing 77.13 per cent and 56.95 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with a turnover of 96.730 million shares worth N618.352 million in 1,211 deals. The third place was occupied by the Consumer Goods Industry with 88.039 million shares worth N5.919 billion in 3,568 deals. Trading in the Top Three Equities namely- FBN Holdings Plc, Ecobank Transnational Incorporation Plc and Guaranty Trust Bank Plc (measured by volume) accounted for 560.299 million shares worth N9.388 billion in 5,218 deals, contributing 36.71 per cent and 37.56 per cent to the total equity turnover volume and value respectively. Also traded during the week were a total of 10,886 units of Exchange Traded Products (ETPs) valued at N1.652 million executed in 24 deals compared with a total of 9.058 million units valued at N99.755 million transacted the previous week in 31 deals. Similarly, a total of 9,250 units of FGN bonds valued at N10.345 million were executed in 4 deals compared with a total of 202 units valued at N219, 549.85 transacted the previous week in 1 deal.
Gainers and losers Meanwhile, the price movement chart of the NSE displayed a total of 26 equities that appreciated in price during the week lower than 51 equities of the preceding week. Forty-nine equities depreciated in price higher than 20 equities of the preceding week, while 122 equities remained unchanged lower than 126 recorded in the preceding week. The top 10 gainers were: PZ Industries Plc (N3.39), Ashaka Cement Plc (N1.90), Mansard Insurance Plc (57 kobo), Berger Paints Nigeria Plc (50 kobo), Ikeja Hotel Plc (36 kobo), Evans Medical Plc (19 kobo), Academy Press Plc (13 kobo), Learn Africa Plc, Continental Reinsurance Plc (seven kobo apiece) and Royal Exchange Plc (six kobo). Conversely, top 10 losers included: Seplat Plc (N40.00), FBN Holdings Plc (97 kobo), Champion Breweries (87 kobo), Diamond Bank Plc, Dangote Flour Plc (60 kobo apiece), Dangote Sugar Refinery Plc (67 kobo), NASCON Plc (75 kobo), UBA Capital Plc (20 kobo), Vono Plc (26 kobo), and Eterna (29 kobo), Vono Plc (10 kobo).