Stock Market Remains Flat Despite Two-day Rally

Stock Market Remains Flat Despite Two-day Rally     

The Nigerian equities market got a little respite last week as the consistent bearish trend was mitigated by two days of gains on the back of bargain hunting  by investors. The market, which dipped by over  seven per cent the previous week opened last week, maintaining a negative trend that lasted for three days. However, bargain hunters, who saw significant value in some of the activities swooped on those equities, a development that led to appreciation on Thursday and Friday.
But  the two-day gains were  not enough to  swing the market to positive territory on weekly basis, hence  the twin market gauge, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) and market capitalisation still closed  at lower levels, compared to the previous week. The ASI declined by 1.49 per cent to close at 30,306.51 while market capitalisation closed at N10.006trillion.
Similarly, other indices drifted lower during the week with exception of the following  NSE Insurance Index, NSE Industrial Goods Index and NSE ASeM Index that rose by 1.81 per cent, 0.96 per cent and 6.72 per cent respectively.
The market had reached a 52 weeks low the previous week as investors remained cautious about market outlook due to concerns over macro-economic challenges.

Traders believe there may be no hope in sight as global headwinds still persists, saying the positive performance recorded last week might be temporary.
“This week, we anticipate a dominance of the bears on heightened economic scare and festive fever, said analysts at Cowry Assets.
On their part analysts at Investment One Limited said 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,” they said.

Summary of daily performance

The market had commenced the trading week on a negative note last Monday as the NSE ASI depreciated by 0.88 per cent to close at 30,492.30, compared with the depreciation of 0.96 per cent recorded the previous Friday. The depreciation of the index was as a result of the losses recorded in the share prices of some highly capitalised stocks such as: Flour Mills Plc, Seplat Plc, UBA Plc, UACN Plc and Guinness Nigeria Plc amongst others. Similarly, the market capitalisation depreciated by 0.88 per cent to close at N10.07 trillion, compared with the depreciation of 0.96 per cent recorded the previous Friday to close at N10.16 trillion. The total value of the stocks traded on the day on the floors of the NSE was N3.00 billion, down by 35.81 per cent from N4.68 billion traded the previous Friday.
The market fell below the 30,000 threshold points as index declined by 2.30 per cent to close at 29,789.59 from 30,492.30 attained on Monday. Market capitalisation also decreased to N9.83 trillion from N10.07 trillion the previous trading day.  Also, trading activities decreased by 29.94 per cent as investors bought 261.05 million shares worth N3.29 billion, in 4,108 deals, compared to 372.64 million shares worth N3.00 billion, in 4,179 deals exchanged on Monday. FBN Holdings Plc, Guaranty Trust Bank Plc and Zenith Bank Plc were the most actively traded stocks on the exchange on the day in terms of volume, while FBN Holdings Plc, Guaranty Trust Bank Plc topped in value terms.

The market again closed on a negative note on Wednesday as the benchmark index depreciated by 2.78 per cent to close at 28,961.67, compared with the depreciation of 2.30 per cent recorded on Tuesday. Similarly, market capitalisation depreciated by 2.78 per cent to close at N9.56 trillion, compared with the depreciation of 2.30 per cent recorded the previous day to close at N9.83 trillion. Losses recorded in the share prices of Access Bank Plc, Lafarge Africa Plc, Zenith Bank Plc, FBN Holdings Plc and Guaranty Trust Bank Plc were responsible for the poor performance. The total value of the stocks traded on the day on the floors of the NSE was N6.21 billion, up by 88.39 per cent from N3.30 billion traded the previous day.

However,  the  market pulse turned positive on Thursday as the benchmark index went up by 1.21 per cent to close at 29,311.25 from 28,961.67 the prior trading day. Market capitalisation also increased to N9.67 trillion from N9.56 trillion the previous day.  Notwithstanding the decline in trading activities on the exchange, market trend reversed and closed positive for the first time last week, in response to clearer fiscal policy direction as the Federal Government presented the Appropriation Bill 2014 to the Parliament in addition to a rebound in crude oil price at the international market. Investors bought 302.40 million shares worth N3.70 billion in 5199 deals compared to 481.74 million shares worth N6.21 billion in 3,819 deals exchanged on Wednesday.
The market remained  positive last Friday as the index appreciated by 3.40 per cent and returned the market above the 30,000 mark to close at 30,306.51 from 29,311.25 the prior trading day. Market capitalisation also increased to N10.01 trillion from N9.67 trillion the previous day. Trading activities surged to a record level as investors traded 3.99 billion shares worth N30.22 billion in 5,678 deals compared to 302.40 million shares worth N3.70 billion in 5,199 deals exchanged on Thursday. The surge in volume and value was caused by the significant deals done on Union Bank Nigeria Plc. shares in which 3.537 billion shares worth N26.534 billion in 32 deals. C&I Leasing Plc., Flourmill Plc, Academy Press Plc and ABC Transport Plc. were the other most active stocks on the Exchange in volume terms.

Market turnover

Analysis of activities for last week showed that a total of 5.409 billion shares worth N46.470 billion in 22,986 deals were traded by investors on the floor of the Exchange in contrast to a total of 1.810 billion shares valued at N28.918 billion that exchanged hands the previous week in 20,677 deals.
The financial services sector (measured by volume) led the activity chart with 4.991 billion shares valued at N37.070 billion traded in 13,641 deals; thus contributing 92.26 per cent and 79.77 per cent to the total equity turnover volume and value respectively.
The conglomerates industry followed with a turnover of 186.245 million shares worth N723.491 million in 1,400 deals. The third place was occupied by the Consumer Goods Industry with 92.022 million shares worth N4.550 billion in 3,784 deals.
Trading in the top three equities namely- Union Bank of Nigeria Plc, FBN Holdings Plc and Transnational Corporation of Nigeria Plc in volume terms accounted for 3.961 billion shares worth N29.085 billion in 4,493 deals, contributing 73.24 per cent and 62.59 per cent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 28,556 units of Exchange Traded Products (ETPs) valued at N531,541.14 executed in 21 deals compared with a total of 1,299 units valued at N452,196.95 transacted the previous week in 21 deals.

Gainers and losers

Meanwhile, twenty-three equities appreciated in price during the week higher than 10 equities of the preceding week. Conversely, 51 equities depreciated in price lower than 68 equities of the preceding week, while 123 equities remained unchanged higher than 119 recorded in the preceding week.
Beta Glass Plc led with N2.46. Other  top gainers included: Cement Company of Northern Nigeria Plc (44 kobo)  E-Tranzact Plc (39 kobo), Honeywell Flour Plc (28 kobo), Fidson Plc (26 kobo), Mansard Insurance Plc (25 kobo), Custodian and Allied Plc (18 kobo),  Omoluabi Savings and Loans Plc (10 kobo), WAPIC  Insurance Plc ( six kobo), and Smart Products Plc ( five kobo).
Conversely, the top 10 losers included: Seplat Plc (N59.81), Flour Mills Nigeria Plc (N8.23), PZ Industries Plc (N5.69), Presco Plc (N3.59), Champion Breweries Plc (N2.05) Dangote Flour Plc (68 kobo), Livestock Feeds (24 kobo), RT Briscoe Plc (13 kobo), Pfizer Plc (11 kobo) and  AIICO Insurance Plc ( nine kobo).