Investors staked N16.193 billion on 1.511 billion shares in 15,544 deals last week, compared with N16.126 billion invested in 2.051 billion in 13,508 deals the previous week at the stock market amid the persistent bearish trading.
Contrary to the expectations that positive results by listed companies announced last week would stem the negative, the market remained bearish leading to the a decline of N621 billion in market capitalisation in the month of October alone. Similarly, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) declined by 4.9 per cent in the month, with last week accounting for 0.21 per cent of the that decline.
Two months to the end of the year, there are no strong indications that the market would fully turn the corner. However, market analysts and operators see the decline as entry opportunity for investors to buy more stocks and moderate losses.
Mr. Ambrose Omordion said discerning investors should latch onto the attractive valuation as a way of averaging down and recouping their investment immediately a recovery stage sets. He anticipated that the losing momentum would diminish as the market reacts to seemingly impressive Q3 numbers released so far and in expectation of more quarterly earnings reports ahead of month-end portfolio alignments, especially as the NSE’s new lows offer investors opportunities to position for short and medium-to-long-term views.
He said: “Given that earnings and economic news can change trend at any time, keep your gaze on fundamentally sound and dividend-paying stocks for possible capital appreciation as Q3 numbers giving insight into companies’ position and future expectations.”
Also, the Chairman, Association of Securities Dealing Houses of Nigeria(ASHON), Chief Patrick Ezeagu, said investors should not miss the entry opportunity provided by the low valuations in the market.
He said trend analysis of corporate earnings in recent times and the current nine months results indicate that many companies across sectors have posted higher earnings with good returns, noting that these results have not significantly reflected in the upward movement of their share prices.
“Very attractive valuations exist in the market right now. What investors need to do is to seek the full advice of securities dealers, the stockbrokers for sound professional advice, and each investor will receive peculiar advice based on the outcome of profiling and take advantage of low prices,” he said.
He explained that most people selling their shares right now are speculators and not real investors.
“Every stock market needs speculators for liquidity but they can change investment decision in one second. Our stock market is forward looking. Investors need not be nervous. They should consult professional stockbrokers for sound investment decision. There is no basis for panic sale of shares. Many companies have announced strong financial performance with prospects of increased future earnings,” he said.
In his opinion a stockbroker and Managing Director/CEO of Network Capital Limited, Mr. Oluropo Dada, said the market, more than ever before, presents an overwhelming buy opportunity for all categories of investors in the face of the attractive valuations and CBN’s policy banning local corporates and individuals from investing in TB.
“The market fundamentals, despite the persistent illiquidity is still very strong and prices of quoted securities can only go up, which will be triggered by both arbitrage income and dividend income. Based on the third quarter results being released by the quoted companies, especially the banks, the market is where to be now,” Dada said.
Meanwhile, the Financial Services industry remained the most actively traded with 1.301 billion shares valued at N10.020 billion exchanged in 10,204 deal. The sector contributed 86.08 per cent and 61.88 per cent to the total equity turnover volume and value respectively. The ICT industry followed with 59.862 million shares worth N3.175 billion in 487 deals, while the third spot was occupied by the Conglomerates industry with a turnover of 53.268 million shares worth N125.514 million in 525 deals.
Trading in the top three equities namely, Veritas Kapital Assurance Plc, Zenith Bank Plc and FCMB Group Plc accounted for 749.819 million shares worth N4.727 billion in 2,446 deals, contributing 50 per cent and 29.19 per cent to the total equity turnover volume and value respectively.
In terms of Exchange Traded Products, investors transacted 1,830 units valued at N65, 956.10 were in seven deals compared with a total of 1,405 units valued at N244,462.05 transacted in nine deals the previous week.
The bonds market accounted for a total of 7,465 units of Federal Government Bonds valued at N8.165 million exchanged in 44 deals compared with a total of 9,018 units valued at N9.713 million transacted in 13 deals two weeks ago.
Top price gainers and losers
The price movement chart showed that 27 equities appreciated higher 18 equities in the previous week, while 18 equities depreciated in price, lower than 33 equities in the previous week.
University Press Plc led the price gainers with 24.3 per cent, trailed by Cornerstone Insurance Plc with 18.4 per cent. AIICO Insurance Plc chalked up 11.1 per cent, while Redstar Express Plc and Seplat Petroleum Development Company Plc appreciated by 9.8 per cent and 9.2 per cent respectively.
Seplat last week announced an interim dividend of N10.4 billion following a profit after tax of N56.6 billion for the nine months ended September 30, 2019. The dividend translated to N18 per share.
Seplat actually ended the nine months in 2019 with a revenue of N152 billion, down from N174 billion in 2018. Financing cost declined from N17.76 billion to N11.14 billion, while profit before tax fell from N65 billion to N56.7 billion.
However, a lower tax of N1.04 billion paid in 2019, compared with N37 billion in 2018, boosted the 2019 PAT to N56.6 billion, as against N27.9 billion in 2018.
According to the Chief Executive Officer, Seplat, Mr. Austin Avuru, “2019 so far has seen us make significant progress towards furthering our ambitious growth strategy. Our core business remains highly cash generative and with four rigs now operational in the field we expect to quickly regain momentum. This is reflected in our decision to declare an interim dividend of $29 million.”
Jaiz Bank Plc was also among the top price gainers for the week with 8.8 per cent, just as Glaxo Smithkline Consumer Nigeria Plc with 8.6 per cent. Tripple Gee and Company Plc, Access Bank Plc and WAPIC Insurance Plc 8.4 per cent, 6.8 per cent and 6.2 per cent in that order.
Conversely, Champion Breweries Plc led the price losers with 11.7 per cent, trailed by Afromedia Plc with 9.7 per cent. Livestock Feeds Plc shed 8.0 per cent, just as Unity Bank Plc and Law Union and Rock Insurance Plc with 6.6 per cent.
Stanbic IBTC Holdings Plc and Lafarge Plc went up by 5.4 per cent and 4.7 per cent in the order, while UAC of Nigeria Plc and GTBank Plc and NAHCO went down by 4.6 per cent, 4.2 per cent and 2.4 per cent respectively.