Industrial, banking indices steer equities’ market to N166bn gain

The equities market improved last week, thanks to the strong gains recorded in the Industrial Goods and Banking indices, which grew 2.94 per cent and 2.39 per cent respectively.

The week’s improved performance further supported by marginal gains in other sectors consequently saw the Market Capitalization appreciate by 1.37 per cent or N166 billion to close the week ended 22nd September, 2017, at N12.234 trillion.

The All-Share Index also grew by 1.38 per cent to 35,488.81 points, bringing the YtD return to 32.05 per cent and moderating the MtD loss to 0.04 per cent.

A review of activities on the local bourse showed that the market ended in positive territory in only two of the five trading sessions, wherein the gains recorded, made up for the losses incurred in the remaining three negative sessions.

In the course of the week, investors in 16,070 deals moved a total of 1.096 billion shares worth N17.859bn on the floor of the Exchange, in contrast to a total of 896.618 million shares valued at N15.368bn that exchanged hands previous week in 17,048 deals.

Contributing significantly to market turnover were Guaranty Trust Bank Plc (GTB), Access Bank Plc, and Jaiz Bank Plc. They accounted for 450.567 million shares worth N10.942bn in 1,834 deals, contributing 41.11per cent and 61.27 percent to the total equity turnover volume and value respectively.

‘128.5 million units of GTB’s shares were crossed between some offshore funds and local investors, with 107.5 million units crossed at N39.00; and 21 million units crossed at N38.00, a market source said.

Also, 57.2 million units of Access were crossed at varying prices averaged at N9.78.

Another notable development during the week was the opening for subscription of Union Bank of Nigeria Plc rights issue, wherein the bank intends to raise N49.7bn with the issuance of 12.1 billion ordinary shares.

Interestingly,  investors, who had shares in the bank as at Monday, 21st August, 2017, will be entitled to buy 5 additional shares for every 7 held at N4.10 per share. Given that the bank’s capital adequacy fell below the regulatory threshold of 15 percent. 80 percent of the rights proceeds will be used to improve working capital with focus on balance sheet optimization to enhance capital adequacy.

The Financial Services Industry thus led the activity chart by volume with 880.597 million shares valued at N13.614bn traded in 8,994 deals; contributing 80.33% and 76.23% to the total equity turnover volume and value respectively.

The Industrial Goods Industry followed with 69.174 million shares worth N676.248m in 881 deals.

The third place was occupied by Consumer Goods Industry with a turnover of 49.288 million shares worth N2.870 billion in 3,077 deals.

Linkage Assurance, Continental Reinsurance and Guaranty Trust Bank led 25 equities that appreciated in price during the week. This was higher than 23 equities that grew last week.

On the other hand Nigerian Enamelware, Caverton offshore and Neimeth topped 35 equities that depreciated in price last week albeit lower than 45 equities of the previous week, while 111 equities remained unchanged higher than one hundred and four 104 equities recorded in the preceding week.

On expectations for the new week, analyst at cordros research say that they expect the volatility in the market to persist with gains outweighing selloffs – albeit marginally – as investors position ahead of Q3 earnings season.

“Given the Banking sector has gained 58.60 percent YtD, we do not expect significant upside from current level, as such the Q3 earnings rally will be driven by investor interest in consumer and industrial goods stocks.”

Afolabi Adesola