A Review of the Nigerian Energy Industry

NSE index declines 1.6% as bears depress markets

13 October 2014, Lagos – Contrary to enthusiasm that the Nigerian equities market would ride on ride on the back of expectations for impressive third quarter results, the bears took charge last week.
The rampaging bears, which were not limited to the Nigerian market, depressed the Nigerian Stock Exchange (NSE) All-Share Index (ASI) by 1.60 per cent to close at 40,444.39, as against a rise of 0.70 per cent the previous week.

Market analysts had said given the fact that the earnings season for the third quarter would attract the bulls back to the market. Although Unity Bank Plc, Access Bank Plc and Infinity Trust Microfinance Plc reported improved third quarter results, some investors remained cautious while others embarked on profit-taking to replenish cash position after the Muslims Eid-el-Kabir celebration.
The federal government had declared last Monday and Tuesday as public holidays for the celebration. As a result, trading was for only three days.

However, the bears dominated the trading sending the ASI 1.60 per cent below the level at which it opened the week. Similarly, the market capitalisation fell by same margin to close lower at N13.354 trillion.
All the NSE indices depreciated during the week with the exception of the NSE Consumer Goods Index that rose by 0.37 per cent. The NSE Banking index fell by 2.88 per cent, while NSE Oil and Gas Index declined by 2.27 per cent. Others are: NSE Insurance Index (1.79 per cent; NSE 30 Index(1.65 per cent); NSE Lotus 11 Index(0.69 per cent) and NSE Industrial Goods Index(0.56 per cent).
The bear run was not limited to the Nigerian market as many global equities markets declined as well. However, analysts at Meristem Securities Limited noted that the bearish trend in the global equity market was sustained for the third consecutive week.
“Within the BRICS region, the Russian RTS, Indian BSE Sens and South African JSE all declined 3.3 per cent, 1.0 per cent and 3.1 per cent in that order while the gainers were the Brazil Bovespa (3.1 per ent) and China Shanghai comp (0.5 per cent).
In the developed market, the United Kingdom FTSE and the United States S&P 500 fell 3.0 per cent and 2.2 per cent respectively. Similarly, within the Europe and Asian region, the France CAC 40 led the decline with 4.9 per cent followed by the Germany XETRA and Japan Nikkei with 4.4 per cent and 2.6 per cent declines apiece. However, the Hong Kong Hang Seng appreciated 0.1 per cent.
In Africa the Egypt EGX 30 led the negative performance shedding 2.3 per cent while the Nigerian NSE ASI and Kenyan NSE 20 lost 1.6 per cent and 0.2 per cent in that order.

Daily performance
Trading resumed on negative after the Muslim holiday as the benchmark index declined by 0.26 per cent to close at 40,995.21 with a corresponding market capitalisation of N13.53 trillion. Conoil Plc and Skye Bank Plc featured on the advancers chart while Stanbic IBTC Plc and Guinness Nigeria Plc were amongst the losers.

Performance was mixed across sectors as the Consumer goods and the Banking sectors recorded gains; Nigerian Breweries Plc and Guaranty Trust Bank Plc accounted for the positive close of both trackers.

On the flip side, the Oil & Gas and Industrial recorded declines mainly depressed by profit taking In Oando Plc and Dangote Cement Plc. Volume and value of trades consummated increased by 52.4 per cent and 13.1 per cent respectively from previous levels, with transactions in the banking subsector accounting for 67.2 per cent of total volume.
The market continued the poor run on Thursday as the ASI recorded a 1.03 per cent decline chiefly depressed by sustained profit-taking on Dangote Cement Plc as well Tier 1 banks, Guaranty Trust Bank Plc and Zenith Bank Plc.

The benchmark index closed at 40,572.25 points with a corresponding market capitalisation at N13.54 trillion. Market activity weakened with total value at N3.99 billion and total volume traded at 298.8 million units. With the exception of the Consumer Goods tracker, the negative return across sectors was reflective of the bearish tone in the market.

Boosted by Nigerian Breweries Plc and Cadbury Nigeria Plc, the consumer goods sector recorded a 0.35 per cent return. Transcorp Plc was the most traded stock on the bourse with about 350 million units traded off market. The Oil & Gas sector, however, led sector wide losses with a 1.98 per cent return due to price declines in Oando Plc and Forte Oil Plc.

In the same manner, both the banking and Industrial sectors trackers closed in the red owing to sell-offs in a number of banking stocks amongst which were Guaranty Trust Bank Plc and Zenith Bank Plc, while Dangote Cement Plc’s similar 2.12 per cent loss accounted for the downtrend in its sector.

The equities market closed on a negative note again last Friday as the NSE ASI depreciated by 0.32 per cent to bring the weekly decline to 1.60 per cent.

Mrket Turnover

Meanwhile, investors traded 1.351 billion shares worth N14.471 billion in 14,680 deals during the week under review in contrast to a total of 2.588 billion shares valued at N24.902 billion that exchanged hands the previous week in 18,750 deals.
The Financial Services Industry led activity chart with 673.157 million shares valued at N7.011 billion traded in 7,922 deals; thus contributing 49.84 per cent and 48.45 per cent to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with a turnover of 523.359 million shares worth 3.187 billion in 1,056 deals. The third place was occupied by Services Industry with 70.653 million shares worth N176.367 million in 629 deals.
Also traded during the week were a total of 3,651 units of Exchange Traded Products (ETPs) valued at N165,346.40 executed in 10 deals compared with a total of 3,597 units valued at N147,560.65 transacted the previous week in 15 deals.
Conversely, there were no transactions on bonds in the week under review. However a total of 10 units of Federal Government Bond valued at N11, 630.89 in 1 deal were transacted the previous week.

Gainers and Losers
On the price movement chart, 19 equities that appreciated in prices during the week lower than 40 equities of the preceding week. Thirty-eight equities depreciated in prices higher than 34 equities of the preceding week, while 143 equities remained unchanged higher than 126 recorded in the preceding week.
Conoil Plc led the price gainers with N4.81 followed by , Champion Breweries Plc with N3.38. Other top gainers included: Nigerian Breweries Plc (N3.34), Ikeja Hotel Plc (66 kobo), Learn Africa Plc (12 kobo), Livestock Feeds Plc and Cutix Plc ( nine kobo apiece), Fidson Plc ( seven kobo), Eterna (six kobo) and Associated Bus Company Plc (one kobo).
Conversely, Stanbic IBTC Plc led the price losers with N2.97, trailed by Zenith Bank Plc with N1.50. Other top losers included: Oando Plc (N1.37), UACN PDC Plc (N1.35), Transcorp Plc (30 kobo), Premier Breweries Plc (22 kobo, AG Leventis Plc (21 kobo), Mansard Insurance Plc (14 kobo) UBA Capital Plc (13 kobo), and International Energy Insurance Plc (three kobo).



– This Day

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