Improved Dividends Halt Bearish Trend at Stock Market

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The stock market rebounded last week after seven consecutive weeks of depreciation as investors responded positively to the dividends declared by Dangote Cement Plc and Stanbic IBTC Holdings Plc.

The market had depreciated for six weeks due to weak investors’ sentiments. However, respite came last week as the Nigerian Stock Exchange (NSE) All-Share Index rose 2.17 per cent to close at 39,216.20, while market capitalisation closed higher at N20.518 trillion.

Analysts said investors raised demand for stocks as more companies announced their results, declaring juicy dividends and bonus shares. Specifically, Dangote Cement Plc recommended a dividend of N16 per share, while Stanbic IBTC Holdings Plc announced a final of N2.70 and a bonus of one new share for every six shares already held. The shares of Stanbic IBTC jumped 30 per cent.

However, market analysts said as the earnings seasons gradually come to an end, sentiments in the market would be influenced by developments in the economic landscape. They added that with the Monetary Policy Committee (MPC) meeting now out of the way, they expected investors’ attention to be focused on the bond auction results as they keep an eye on the movement of yields in the fixed income market.

“As the full year 2020 earnings season gradually fades away, we expect investors’ sentiment to be influenced by developments in the macroeconomic landscape and corporate actions.

“Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings,” analysts at Cordros Securities said.

The value of trading also rose last week as investors committed N21.311 billion to 1.530 billion shares in 20,016 deals compared with N19.272 billion invested in 2.342 billion shares in 20,173 deals the previous week.

The Financial Services Industry led the activity chart with 1.096 billion shares valued at N12.294 billion traded in 11,106 deals, thus contributing 71.6 per cent and 57.6 per cent to the total equity turnover volume and value respectively.

The Consumer Goods Industry followed with 177.673 million shares worth N3.577 billion in 3,139 deals, while the third place was occupied by Conglomerates Industry, with a turnover of 99.609 million shares worth N216.997 million in 856 deals.

Trading in the top three equities namely Union Bank Nig. Plc, Guaranty Trust Bank Plc and Dangote Sugar Refinery Plc accounted for 687.616 million shares worth N9.496 billion in 3,022 deals.

Meanwhile, the price movement chart showed 48 gainers higher than 33 equities in the previous week and 18 losers lower than 25 equities in the previous week. Stanbic IBTC Holdings Plc led the price gainers with 30 per cent, followed with Julius Berger Nigeria Plc with 20.8 per cent.

Guinness Nigeria Plc chalked up 18.5 per cent while UAC of Nigeria Plc garnered 16 per cent. John Holt Plc and Sterling Bank Plc garnered 13.4 per cent. Other top price gainers included: Glaxosmithkline Consumer Nigeria Plc (13.3 per cent); NPF Microfinance Bank Plc (11.8 per cent) and International Breweries Plc (11.7 per cent).

Conversely, Livestock Feeds Plc led the price losers with 15.4 per cent trailed by Champion Breweries Plc with 13.1 per cent. Japaul Gold & Ventures Plc shed 12.2 per cent, just as Jaiz Bank Plc went down by 11.9 per cent.

MRS Oil Nigeria Plc depreciated by 9.7 per cent while Royal Exchange Plc, United Bank for Africa Plc, Lafarge Africa Plc, Chams Plc and Dangote Sugar Refinery Plc lost 7.6 per cent; 4.9 per cent; 4.8 per cent; 4.5 per cent and 3.5 per cent respectively.

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