Equities market depreciates by N14 billion in one week

Equities market of the Nigerian Stock Exchange (NSE) depreciated by N14billion to N13.365trillion last week as against N13.351trillion it opened for trading.

Mixed trading continued on the NSE amidst weak volumes and the absence of any positive catalysts, with the benchmark index closing marginally lower.

Banking stocks –Zenith Bank Plc (-1.2 per cent), Stanbic (-1.3 per cent), ETI (-4.8 per cent) and FBN Holdings Plc (-2.0 per cent) – were the major drivers of the drop as the NSE AllShare Index fell by 0.1per cent, w/w, to 25,572.57 basis points from 25,591.95 basis points it opened for trading last week.

Consequently, the MTD gain declined to one per cent, while the YTD loss increased to -4.7 per cent. Performance across sectors within our coverage was mixed with the Banking (-0.7 per cent) and Oil & Gas (-1.0 per cent) indices declining, while the Industrial Goods (+0.5 per cent), and Consumer Goods (+0.1 per cent) indices closed marginally higher.

The Insurance index closed flat. The NSE weekly report explained that “A total turnover of 1.139 billion shares worth N12.692 billion in 17,109 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.226 billion shares valued at N10.842 billion that exchanged hands last week in 19,529 deals.

“The Financial Services industry (measured by volume) led the activity chart with 870.300 million shares valued at N7.863 billion traded in 9,427 deals; thus contributing 76.43 per cent and 61.95 per cent to the total equity turnover volume and value respectively.

“The Industrial Goods industry followed with 62.689 million shares worth N1.162 billion in 1,557 deals.

The third place was the ICT industry, with a turnover of 50.859 million shares worth N2.552 billion in 619 deals.

“Trading in the top three equities namely FBN Holdings Plc, Guaranty Trust Bank Plc and Access Bank Plc. (measured by volume) accounted for 353.048 million shares worth N4.018 billion in 3,095 deals, contributing 31per cent and 31.66 per cent to the total equity turnover volume and value respectively.”

The report stated that a total of 143,690 units valued at N1.246 billion were traded this week in 19 deals compared with a total of 54,457 units valued at N283.940 million transacted last week in 18 deals.

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“A total of 18,803 units valued at N19.581 million were traded this week in eight deals compared with a total of 7,125 units valued at N7.762 million transacted last week in 15 deals,” the report explained.

“In the absence of a positive catalyst, and given the still uninspiring macro story, we guide investors to trade cautiously in the short term.

However, we expect the market might benefit over the longer term on compelling valuations and as investors seek alphayielding opportunities in the face of negative real returns in the fixed income market,” analysts at Cordros Research stated.