The rally in the equities market was sustained for the third consecutive week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) rose by 0.52 per cent to close at 26,991.42, while market capitalisation ended at N13.027 trillion.
There has been renewed interest in the equities market as investors hunt for positive real return following depressed fixed income (FI) yields since the Central Bank of Nigeria (CBN), barred individuals and domestic private firms from participating in its open market operations (OMO) auctions.
The market had gained 2.04 per cent the previous week before last week’s appreciation, thereby reducing the year-to-date decline to 14.12 per cent. Out of the five trading days, the market appreciated four times.
Trading had opened on a bearish note the first day of the week, falling by 0.33 per cent. However, from Tuesday, Wednesday, Thursday and Friday were positive, gaining 0.18 per cent, 0.14 per cent, 0.36 per cent and 0.44 per cent in that order.
In terms of sectoral performance, the Consumer Goods Index led with 6.0 per cent, trailed by the NSE Oil & Gas Index appreciated with 2.2 per cent. The NSE Insurance Index rose 0.5 per cent while the NSE Banking Index declined by 0.9 per cent. Analysts still believe that the CBN’s policy will continue to buoy performance in the market.
“We assume that the recent CBN’s policy restricting access to OMO Bills will buoy performance in the equities market,” analysts at Afrinvest (West Africa) said.
Similarly, analysts at Cordros Capital Limited said: “In our view, the still compelling valuations and attractive dividends yields have driven market performance over the past few weeks, a reaction to a limited outlet for investments given recent policy directives limiting domestic participation in the FI market. In the short term, we expect that stock market will continue to benefit, especially as FI yields remain on the downtrend.”
Some positive news came from the market last week that are capable of further boosting investors’ confidence. For instance, board of SEC met with stakeholders, where the chairman, Mr. Olufemi Lijadu called for more cooperation for the overall interest of Nigerian capital and economy generally.
“Operators and the apex regulator have the same interest and expressed the need for all to work together in the overall interest of the market and the economy. We need money to develop our economy and to get the money we need to attract investors both local and foreign. To be able to attract them, our markets need to have the basic rules that are obtainable anywhere else in the world by aligning ourselves with best practices internationally,” he said.
Lijadu said the board was ready to listen and be accessible to market operators, saying,
“You are there in the market and can give us that sensitivity of what the market is feeling and can give us that direction to frame our policies in the interest of the market,”
He expressed confidence about the level of knowledge and professionalism of stakeholders in the market, adding that by the time views and suggestions from the interaction were put together the market would arrive at some solutions.
“We are key pillars in the ability of our country to find solutions to its developmental needs by attracting relevant funding, together we can make our country great” he added.
Similarly, Federal lawmakers and the Ministry of Industry Trade and Investments promised to work with securities dealers and other stakeholders to ensure the market plays its role of capital formation for the growth and development of the economy.
The Chairman, House of Representatives Capital Market and Institutions Committee, Honourable Babangida Ibrahim, said the lawmakers were willing to enact laws that would boost operations in the market. According to him, low investors’ confidence as well as unclaimed dividends remain the major issues affecting the growth and development of the capital market.
“I want to assure you that the committee is ready to work with the CIS. The National Assembly and House of Reps in particular, is aware of the major challenges facing the capital market in recent times. As a result of that, we have already started engaging with some of the key stakeholders including the Institute on the best way forward. I would like to appeal to the Institute to be unofficial advisers to the government and continue to monitor the activities of the government as regards policies affecting the market so as to ensure we move the capital market forward,” he said.
Also speaking, the Vice Chairman, Senate Committee on Capital Market, Senator Binos Yaroe, charged the Institute to come up with policy proposals that will enhance the competitiveness of the market.
“The challenges the Nigerian capital market is facing cannot be emphasised and the economy has never been as bad as it is today and it is a known fact that the capital market is the barometer of any economy. In that regard, the National Assembly is ready to partner and support the institute to ensure that our market is more competitive,” Yaroe, who is also a stockbroker said.
On his part, the Minister of Industry, Trade and Investment, Otunba Niyi Adebayo, said once CIS comes up with policy proposals to support and address Nigeria’s infrastructure challenges, the federal government would incentivise and provide the enabling environment to support this objective.
“We declare our willingness to partner the CIS in ensuring the necessary enabling environment that will further stimulate and boost competitiveness in the capital market as well as ensure a coordinated and integrated approach to Nigeria’s financial sector is attainable. The best way to improve competitiveness is through a mixture of policies designed to help, improve capital market competitiveness,” Adebayo said.
Meanwhile, investors traded 1.416 billion shares worth N17.249 billion in 20,303 deals in contrast to a total of 2.084 billion shares valued at N33.867 billion that exchanged hands the previous week in 21,849 deals. The Financial Services industry remained the most traded selling 880.236 million shares valued at N8.089 billion traded in 12,488 deals, thus contributing 62.15 per cent and 46.9 per cent to the total equity turnover volume and value respectively.
The Conglomerate industry followed with 283.854 million shares worth N1.587 billion in 841 deals. The third place was Consumer Goods industry with a turnover of 80.804 million shares worth N2.349 billion in 2,871 deals. Trading in the top three equities namely, UAC of Nigeria Plc, FBN Holdings Plc and Access Bank Plc, accounted for 554.855 million shares worth N4.310 billion in 4,113 deals, contributing 39.18 per cent and 24.98 per cent to the total equity turnover volume and value respectively.
Top price gainers and losers
The price movement chart showed that 40 equities appreciated in price during the week, higher than 39 equities in the previous week, while 23 equities depreciated in price, higher than 11 equities in the previous week.
Neimeth International Pharmaceuticals Plc led the price gainers with 40 per cent, trailed by Cornerstone Insurance Plc with 35.4 per cent. Chams Plc chalked up 33.3 per cent, while Ikeja Hotel Plc garnered 31.5 per cent. Conoil Plc and Learn Africa Plc appreciated by 18.8 per cent, just as Forte Oil Plc and Ekocorp Plc went up 13.8 per cent and 10 per cent respectively. Flour Mills of Nigeria Plc and MCNichols Plc gained 9.8 per cent and 9.5 per cent in that order.
Conversely, LASACO Assurance Plc led the price losers with 20.6 per cent, trailed by Jaiz Bank Plc with 11.2 per cent, just as Associated Bus Company Plc shed 8.8 per cent. Sterling Bank Plc and AIICO Insurance Plc went down by 8.5 per cent and 6.5 per cent respectively.
Other top price losers included: Wema Bank Plc (6.5 per cent); Transcorp Plc (6.4 per cent); Ecobank Transnational Incorporated (6.4 per cent); NASCON Allied Industries Plc (5.7 per cent) and Unilever Nigeria Plc (5.6 per cent).