Nigerian equities lose N463b amid profit-taking

Benchmark indices for Nigerian stock market at the weekend indicated average decline of 2.53 per cent, equivalent to net loss of N463 billion for the week. This depressed the average year-to-date return to 27.60 per cent.

Aggregate market value of all quoted equities at the Nigerian Stock Exchange (NSE) dropped to N17.902 trillion at the weekend as against N18.365 trillion recorded as opening value for the week.

The All Share Index (ASI)- the value-based common index – that tracks all share prices at the NSE and doubles as the sovereign equity index for Nigeria, declined from the week’s opening index of 35,137.99 points to close weekend at 34,250.74 points.

With nearly four decliners to every advancer, the negative market position was driven by widespread selloffs across the sectors, especially within the large-cap group. The NSE 30 Index- which tracks the 30 largest quoted companies, dropped by 3.0 per cent. The NSE Industrial Goods Index recorded the highest loss of 4.96 per cent. The NSE Banking Index declined by 2.93 per cent. The NSE Insurance dropped by 1.82 per cent. The NSE Consumer Goods Index depreciated by 1.55 per cent while the NSE Oil and Gas Index dipped by 0.25 per cent.

There were 46 losers against 13 gainers during the week, compared with 22 gainers and 45 losers recorded in the previous week. Regency Assurance recorded the highest loss, in percentage terms, dropping by 16..67 per cent to close at 20 kobo. University Press followed with a drop of 14.29 pe rcent to close at N1.26. Neimeth International Pharmaceuticals declined by 12.35 per cent to close at N2.20. Lafarge Africa lost 10.65 per cent to close at N20.55 while Transcorp Hotels depreciated by 10 per cent to close at N3.60 per share.

FTN Cocoa Processors led the gainers with a gain of 51.72 per cent to close at 44 kobo. Union Diagnostic & Clinical Services rose by 16 per cent to close at 29 kobo. Okomu Oil Palm also rose by 10 per cent to close at N88 per share. Livestock Feeds appreciated by 6.6 per cent to close at N1.29 while Unity Bank rose by 4.69 per cent to close at 67 kobo per share.

Total turnover at the NSE stood at 2.265 billion shares worth N20.99 billion in 23,722 deals as against a total of 1.675 billion shares valued at N25.425 billion traded in 23,650 deals two weeks ago. The financial services sector led the activity chart with 1.88 billion shares valued at N14.93 billion traded in 13,602 deals; representing 83.15 per cent and 71.14 per cent of the total equity turnover volume and value respectively. The consumer goods sector followed with 116.400 million shares worth N2.817 billion in 3,474 deals while conglomerates sector placed third with a turnover of 107.803 million shares worth N231.323 million in 897 deals.

Banking stocks dominated the activities chart. The three most active stocks were Jaiz Bank, United Bank for Africa and Zenith Bank, which altogether accounted for 894 million shares worth N7.077 billion in 4,045 deals, representing 39.47 per cent and 33.72 per cent of the total equity turnover volume and value.

A total of 292,510 units of Exchange Traded Products (ETPs) valued at N2.270 billion were traded in 45 deals compared with a total of 543,655 units valued at N4.694 billion traded in 36 deals penultimate week.

At the debt market, a total of 13,555 units of bonds valued at N17.369 million were traded in eight deals compared with a total of 3,198 units valued at N3.898 million traded in 10 deals two weeks ago.

The Nigerian market performance mirrored the largely negative performance of the global equities markets. In United States of America, the Dow Jones Industrial Average has dropped by 0.7 per cent while S & P Index declined by 0.8 per cent. STOXX Europe-which tracks Europe, declined by 0.2 per cent while Japan’s Nikkei 225 Index dropped by 0.4 per cent. However, United Kingdom’s FTSE 100 Index appreciated by 0.8 per cent. The MSCI FM Index- which tracks frontier markets, rose by 0.2 per cent while the MSCI EM Index- which tracks emerging markets, appreciated by 1.3 per cent.

Analysts at Cordros Securities said investors were on “continued profit-taking”, noting that the equities market also reacted negatively to the uptick in short-term yields at the Nigerian Treasury Bill (NTB) primary auction.

“We expect the profit-taking and negative reaction to the unanticipated front-end supply from the Central Bank of Nigeria (CBN) to be short-lived. Yields in the fixed income market remain relatively unattractive, and we expect this to remain positive for stocks. However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings,” Cordros Securities stated.

Analysts at Afrinvest Securities said they expected the profit-taking to continue in the next few days.

“In the coming week, we anticipate that investors will partake in profit-taking activities,” Afrinvest Securities stated in a weekend note.