High-cap stocks, anticipation of dividends push NSE index by 1.41%
Demand for undervalued high capital stocks, and anticipations of
dividends payment by some quoted companies propelled five consecutive
days of rally at the equities sector of the Nigerian Stock Exchange
(NSE), causing investors’ fortunes to rise, and the NSE All-share index
and market capitalisation to appreciate by 1.41 per cent to close the
week at 25,041.89 and N13.063 trillion, respectively.
Similarly, all other indices finished higher with the exception of
NSE Insurance Index, which depreciated by 0.28 per cent, while the NSE
ASeM closed flat.
Analysts at the weekend, expressed missed feelings on the
sustainability of the bulls’ run due to inconsistent government
policies, which have continued to dampen confidence.
According to them, this is likely to support volatility with the earnings reporting season gradually coming to end.
For instance, the Chief Research Office of Investdata Consulting
Limited, Ambrose Omordion, said: “The market again seems to have
discounted the policy somersaults and lack of economic direction, as the
government and its economic managers continue to wobble on policy
formulations and statements that reveal a clear lack of coordination and
vision among the different facets of policymaking.
“One of the major drivers of inflation in the country today is the
pump price of fuel, which in the last four months have been adjusted up
and down before the latest price of N150 per litre of premium motor
spirit, the highest in the history of Nigeria.”
He continued: “It is painful that the current administration has
failed to fix the nation’s oil refineries in Warri, Port-Harcourt, and
Kaduna, which could have helped stabilise the price of fuel, rather than
spending billions of scarce foreign exchange on importation of the
prime product, resulting in imported inflation.
“The removal of fuel subsidy according to the government was to stem
the spate of high-level corruption and achieve single exchange rate and
expansion of tax, but they are yet to give a direction and indicate
where we are going as nation, due to the lack of focus and coordination
to chart a new course in this economic reset.”
He therefore advised investors to trade low priced stocks with serious caution to avoid being trapped.
Also, analysts at Cordros capital, said: “Our view continues to
favour cautious trading as risks remain on the horizon due to a
combination of the increasing number of COVID-19 cases in Nigeria and
weak economic conditions. Thus, we continue to advise investors to seek
trading opportunities in only fundamentally justified stocks.”
A review of the market performance last week revealed renewed
bargain-hunting in most blue-chip stocks, especially Flour Mills and
GlaxoSmithkline (GSK) Consumer Nigeria, the equities market commenced
trading for the week on a positive note on Monday, as the All Share
Index (ASI) appreciated by 0.29 per cent.
Specifically, at the close of trading Monday, the ASI increased by
72.39 absolute points or 0.29 per cent to close at 24,766.12 points.
Similarly, the market capitalisation rose by N37 billion to close at
The uptrend was impacted by gains recorded in large and medium
capital stocks, including Flour Mills of Nigeria, BUA Cement, GSK
Consumer Nigeria, Guaranty Trust Bank, and Neimeth International
Transactions at the Exchange sustained a rising profile Tuesday, as
more blue-chip stocks appreciated in price, resulting in a further
increase in market capitalisation by N40 billion.
Specifically, at the close of transactions Tuesday, the All -Share
Index (ASI), added 75.82 absolute points, a 0.31 per cent rise to close
at 24,841.94 points. Similarly, investors gained N40 billion as market
capitalisation increased to N13.959 trillion.
The upturn was impacted by gains recorded in medium and large value
stocks, including Seplat, Nigerian Breweries, Flour Mills of Nigeria,
Zenith Bank, and UAC of Nigeria (UACN).
On Wednesday, the local bourse extended the positive streak to four
consecutive trading days, just as more blue-chip stocks witnessed price
rallies, resulting to a further increase in the All-Share Index (ASI) by
0.16 per cent
Specifically, at the close of transactions on Wednesday, the ASI
increased by 40.10 absolute points or 0.16 per cent rise to close at
24,882.04 points. Similarly, the overall market capitalisation gained
N21 billion to close at N12.980 trillion.
The uptrend was impacted by gains recorded in large and medium
capital stocks, including 11 Plc, Stanbic IBTC Holdings, Chemical and
Allied Products (CAP), Presco, and Guaranty Trust Bank.
Analysts at Afrinvest Limited, said: “For the rest of the week, we
expect market performance to move in tandem with the trend in earnings
Trading on the Exchange sustained a rising profile on Thursday, as
more blue chip stocks appreciated in price, causing investors’ wealth to
increase by N25 billion
The All-Share Index (ASI) increased by 48.30 absolute points,
representing a growth of 0.19 per cent to close at 24,930.34 points.
Similarly, the overall market capitalisation size gained N25 billion to
close at N13.005 trillion.
The upsurge was impacted by gains recorded in large and medium
capital stocks, including Seplat Petroleum Development Company (Seplat),
Stanbic IBTC Holdings, Guinness Nigeria, MTN Nigeria Communications,
and NASCON Allied Industries (NASCON).
Capital market analysts noted that the domestic equities market
sustained its bullish streak for the fifth consecutive session,
following continued interest in banking stocks.
Further breakdown of last week’s trading showed that a turnover of
1.065 billion shares worth N10.798 billion was recorded in 20,482 deals
by investors on the floor of the Exchange, in contrast to a total of
421.984 million shares valued at N5.337 billion that exchanged in 11,801
deals during the preceding week.
The financial services industry (measured by volume) led the activity
chart with 677.301 million shares valued at N5.070 billion traded in
10,386 deals; thus contributing 63.59 per cent the total equity
The conglomerates industry followed with 153.384 million shares worth N580.216 million in 894 deals.
The third place was the Industrial Goods industry, with a turnover of 57.404 million shares at N861.263 million in 1,671 deals.
Trading in top three equities namely, FBN Holdings Plc, UACN Plc, and
Access Bank Plc (measured by volume) accounted for 320.196 million
shares worth N1.802 billion in 2,639 deals, contributing 30.06 per cent
to the total equity turnover volume and value respectively.
A total of 118,062 units valued at N1.061 billion were traded in 26
deals last week, compared with 34,880 units worth N44.775 million
transacted in 22 deals during the preceding week.
A total of 56,530 units of bonds valued at N58.664 million were
traded last week in 15 deals compared with 11,909 units worth N15.732
million transacted during the preceding week in eight deals.
Forty-one equities appreciated in price during the week, higher than
24 equities in the previous week. Also 18 equities depreciated in price,
lower than 28 equities during the period, while 104 equities remained
unchanged, lower than 111 equities recorded in the previous week.
Source: Punchng, August 10, 2020