A Review of the Nigerian Energy Industry

Stock market closes negatively as apathy persists

NSE-Building-Lagos29 September 2014, Lagos – The Nigerian equities market reversed the little gains recorded the previous week as major market indicators closed in red following a tumultuous week.

Investors had gone home smiling the previous week when the market returned to positive territory following increased naira votes that was driven by mild optimism.

But the situation changed last week as more investors booked  profits ahead of the Muslim holiday and investors’ apathy.
The Nigerian bourse performance has been mixed in the last few weeks owing to liquidity squeeze and massive profit taking activity by anxious investors.

There was however some respite in the early days of September following the announcement that the Qatari National Bank acquired Asset Management Corporation of Nigeria (AMCON) stake in Ecobank Transnational International (ETI) Plc.  The announcement had buoyed the Nigerian Stock Exchange (NSE) Banking Index as it rose by 155 basis points while the industrial stocks advanced by 65 basis points on the back of Lafarge Cement WAPCO Plc, buoyed by the news of the planned expansion of one of its subsidiaries.

However, at the close of business last week,  the NSE All-Share Index (ASI) and the market capitalisation dropped by 0.56 per cent to close last Friday at 40,819.72 and N13.478 trillion respectively.

Consequently, three indices appreciated while four depreciated. Those that declined were: the NSE 30 Index (0.68 per cent), NSE Banking Index (2.00 per cent), NSE Lotus Islamic Index (0.16 per cent), NSE Industrial Index (0.28 per cent), and NSE ASeM Index (0.45 per cent).
Stock traders believe there may be no significant rally in the days ahead as liquidity squeeze may bite harder as the month comes to an end.

Summary of Daily Performance
The market began the week with 0.16 per cent decline to settle at 40,984 points, due largely to profit-taking on Dangote Cement Plc, Guaranty Trust Bank Plc, ETI Plc and FBN Holdings Plc. Market capitalisation declined as well by N215 billion to settle at N13.53 trillion. Volume of trades on the day totalled 344.95 million units while turnover stood at N4.14 billion at the close of trade reflective of the decline in market activity. FBN Holdings Plc emerged the most traded stock, accounting for 19 per cent and 22 per cent of the volume and value of transactions respectively.  The Industrial sector led performance with a 1.11 per cent return as the price climb in Lafarge Africa Plc and Ashaka Cement Plc more than offset the effect of the decline in Dangote Cement Plc.

The bearish sentiments continued to dominate as the NSE on Tuesday as the benchmark index declined by 1.09 per cent. Dangote Cement Plc again accounted for the major drag on the index, further assisted by Tier 1 banks Guaranty Trust Bank Plc, ETI Plc and FBN Holdings Plc and Zenith Bank Plc. At the close of trade, the ASI was  trimmed by  446.91 points to 40,537.20 while market capitalisation decreased by N147.57 billion to settle at N13.39 trillion. A total of 294.39 million units of shares valued at N3.49 billion were traded on the floor on the day. This implies a 14.7 per cent decline in volume traded and 15.6 per cent drop in turnover. Activity from the banking sector accounted for 44.1 per cent and 45.6 per cent of volume traded and turnover.
The market retracted the two-day loss on Wednesday as the benchmark index gained 0.67 per cent to close at 40,809.32 points from 40,537.20 attained on Tuesday. Market capitalisation also increased to N13.47 trillion from N13.39 trillion the previous trading day. Trading activities on the increased by 45.31 per cent as investors bought 427.76 million shares worth N11.90 billion, in 4,342 deals, compared to 294.39 million shares worth N3.49 billion, in 5,097 deals exchanged on Tuesday. UBA Plc, CAP Plc, AIICO Insurance Plc, and NEM Plc were the most actively traded stocks on the exchange on the day in terms of volume, while Seplat Plc and Dangote Cement Plc, topped in terms of value. A total number of 21 stocks gained on the bourse on Wednesday while 31 stocks declined leaving 57 stocks unchanged.

On Thursday, the benchmark index mildly declined by 0.07 per cent as profit-taking on Dangote Cement Plc coupled with negative sentiments towards Access Bank Plc depressed the market’s performance. Excluding the duo, a 0.21 per cent gain would have been recorded. Market capitalisation in the same manner dipped by N9.68 billion, and settled at N13.47 trillion at the closing bell. A total of 273 million units of shares valued at N4.62 billion were exchanged on the bourse in 4,330 deals. Therefore, relative to the surge in market activity recorded in the previous session, turnover contracted by 61.2 per cent while the total volume traded dipped 36.1 per cent.

The market closed positive last Friday as index appreciated 0.10 per cent to close at 40,819.72 from 40,780.00 attained on Thursday. Market capitalisation also increased to N13.48 trillion from N13.47 trillion the previous trading day. Trading activities decreased by 9.96 per cent as investors bought 245.92 million shares worth N2.77 billion, in 3,806 deals, compared to 273.11 million shares worth N4.62 billion, in 4,342 deals exchanged on Thursday. Access bank Plc, Mansard Insurance Plc and FBN Holdings  Plc were the most actively traded stocks on the exchange in terms of volume, while Access Bank Plc and Oando Plc, topped in terms of value.

Market Turnover
Meanwhile, analysis of trading activity for the week under review showed that a total of 1.586 billion shares worth N26.921 billion in 22,238 deals were traded  by investors on the in contrast to a total of 3.752 billion shares valued at N62.116 billion that exchanged hands the previous week in 22,109 deals.

The Financial Services Industry closed the week as the most active in volume terms  with 1.113 billion shares valued at N8.765 billion traded in 11,102 deals, thus contributing 70.19 per cent and 32.56 per cent to the total equity turnover volume and value respectively. The Conglomerates Services Industry followed with a turnover of 158.526 million shares worth 989.503 million in 1,640 deals. The third place was occupied by Consumer Goods Industry with 92.421 million shares worth N5.864 billion in 3,307 deals.

UBA Capital Plc, Transnational Corporation of Nigeria Plc,  FBN Holdings Plc accounted for the accounted for 450 million shares worth N2.946 billion in 3,889 deals, contributing 28.37 per cent and 10.94 per cent to the total equity turnover volume and value respectively.

A total of 113,744 units of Exchange Traded Products (ETPs) valued at N2.427 million were also executed in 22 deals compared with a total of 40,862 units valued at N992,697.40 transacted the previous week in 14 deals.

Similarly, there were a total of 100 units of Federal Government Bond valued at N104, 398.48 executed in 1 deal compared with a total of 420 units valued at N480, 609.28 executed in 3 deals transacted the previous week.

Gainers and Losers
In terms of price movement, a total of 33 equities appreciated, compared with 32 equities of the preceding week. Forty-five equities depreciated in prices lower than 51 equities of the preceding week, while 121 equities remained unchanged over 117 recorded in the preceding week.
Guinness Nigeria Plc led the price gainers with N15 followed by Seven-up Bottling Company Plc with N13.73. Other top gainers include: May & Baker Plc (51 kobo); Mansard Insurance Plc (42 kobo); Custodian and Allied Insurance Plc (35 kobo);  FCMB Group Plc (31 kobo); AG Leventis Plc (22 kobo); Vono Plc (12 kobo); Champion Breweries (seven kobo); Royal Exchange Plc (four kobo).

Conversely,  to top price losers include: PZ Industries Plc (N1.75); Access Bank Plc (69 kobo); Ikeja Hotel Plc (63 kobo); Jos International Breweries Plc (34 kobo); Premier Breweries Plc (49 kobo); Trans Nationwide Express Plc (28 kobo);Avon Crowncaps & Containers Plc (16 kobo); UBN Plc ( six kobo), Cutix Plc (one kobo).


– This Day

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