Nigeria loses N191b as global equities tumble

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Nigerian equities closed weekend with net loss of N190.8 billion as weak domestic sentiment and global risk concerns sustained continued depreciation in share prices in Nigeria and other global stock markets.

Benchmark indices at the Nigerian equities market indicated average decline of 1.32 per cent at the weekend, equivalent to net capital depreciation of N190.8 billion for the immediate past week.

The continuing price depreciation depressed the average year-to-date return for Nigerian equities to 2.04 per cent.

Despite the onset of the aggressive period of the earnings season, investors in Nigerian equities remained cautious and bargain-hunters were overwhelmed by discounted open market orders by divesting investors seeking to attract deals in a supply-driven buyer’s market.

Nigeria’s second largest financial institution, Zenith Bank International, released its audited results at the weekend with net profit of N208.8 billion and final dividend per share of N2.80. The final dividend represents a dividend yield of 14.1 per cent on the bank’s closing price of N19.85 per share at the weekend.

United Capital also announced a dividend per share of 50 kobo, a dividend yield of 14.5 per cent on the investment banking group’s closing price of N3.45 per share at the weekend.

Most market analysts remained cautious about the outlook for the Nigerian market in spite of expectations that immediate returns, in terms of dividend yields, may significantly overwhelm nominal saving rates and average yield in the fixed-income market.

“Following four weeks of consecutive losses, we expect to see some bargain hunting in early trades next week. However, we maintain a bearish outlook in the near term as overall investor sentiment remains weak,” Afrinvest Securities, a major stockbroking firm, stated at the weekend.

Analysts at Cordros Securities advised investors to trade cautiously and take positions only in “fundamentally justified stocks” citing the continued weak market sentiments.

The All Share Index (ASI)-the value-based common index that tracks all share prices at the Nigerian Stock Exchange (NSE), closed weekend at 27,388.62 points as against its week’s opening index of 27,755.87 points.

Aggregate market value of all quoted equities also declined from its week’s opening value of N14.456 trillion to close weekend at N14.268 trillion. The difference between the ASI and market value was due to the additional listing of shares by AIICO Insurance Plc.

All sectoral indices also closed negative with the exception of the NSE Industrial Goods Index, which rose by 1.0 per cent. The NSE Consumer Goods Index slumped by 6.8 per cent.

The NSE Banking Index depreciated by 2.6 per cent. The NSE Insurance Index dropped by 2.1 per cent while the NSE Oil and Gas Index dipped by 1.28 per cent.

Nigerian equities mirrored global stock market decline during the week. From advanced to emerging and developing economies, global equities stuttered during the week as investors continued to weigh global risk of China’s Coronavirus crisis amid global trade disputes and uncertainties in the crude oil market.

In United States of America, the benchmark Dow Jones Industrial Average (DJIA) dropped by 0.6 per cent while the S & P 500 and NASDAQ declined by 1.1 per cent each.

In United Kingdom, the FTSE Index dropped by 0.3 per cent.  Germany’s XETRA DAX indicated a drop of 1.1 per cent. France’s CAC 40 Index dipped by 0.7 per cent. Hong Kong’s Hang Seng Index dropped by 1.8 per cent. Japan’s Nikkei 225 Index declined by 1.3 per cent.

The Euro Stoxx, which tracks European markets, posted a negative return of -0.9 per cent. The MSCI EM Index, which tracks emerging markets, dropped by 1.0 per cent while the MSCI FM Index, which tracks the frontier markets, slipped by 0.5 percent.

Also, Brazil’s Ibovespa Index dropped by 1.3 per cent. Russia’s RTS Index indicated average decline of 0.9 per cent. India’s BSE Sens dropped by 0.2 per cent.

Saudi Arabia’s Tadawul Index declined by 1.7 per cent while Qatar’s DSM 20 Index dipped by 0.9 per cent. However, China’s Shanghai Composite Index rose by 4.2 per cent as the Chinese government hinted of possible stimulus for companies affected by the Coronavirus crisis.

Across Africa, it was a thoroughly bearish market. South Africa’s FTSE/JSE All-Share Index dropped by 1.1 per cent. Kenya’s NSE 20 Index declined by 2.3 per cent. Egypt’s EGX 30 Index posted a drop of 1.0 per cent.

Mauritius’ SEMDEX Index dipped by 0.8 per cent while Ghana’s GSE Composite Index slipped by one basis point. However, Morocco’s Cassablanca MASI Index appreciated by 1.4 per cent.

Meanwhile, the momentum of activities at the Nigerian equities market increased during the week. Total turnover rose to 1.50 billion shares worth N17.91 billion in 18,515 deals as against a total of 912.2 million shares valued at N12.13 billion traded in 17,083 deals two weeks ago.

The financial services sector remained the most active sector with a turnover of 1.23 billion shares valued at N12.97 billion in 11,741 deals, representing 81.8 per cent and 72.45 per cent of the total equity turnover volume and value respectively.

The consumer goods sector followed with 83.88 million shares worth N3.09 billion in 1,937 deals while the third place was occupied by the conglomerates sector with a turnover of 49.72 million shares worth N104.2 million in 517 deals.

The three most active stocks were Zenith Bank Plc, Sovereign Trust Insurance Plc, and Guaranty Trust Bank Plc. The three most active stocks accounted for 636.624 million shares worth N10.123 billion in 4,539 deals, representing 42.47 per cent and 56.53 per cent of the total equity turnover volume and value respectively.

Also, a total of 1,040 units of Exchange Traded Funds (ETFs) valued at N3.61 million were traded in 12 deals compared with a total of 1,540 units valued at N137,421 traded in five deals penultimate week.

In the sovereign debt market, a total of 40,469 units of Federal Government bonds valued at N47.68 million were traded in 25 deals compared with a total of 23,923 units valued at N28.986 million traded in 22 deals penultimate week.

There were 24 gainers against 28 losers during the week compared with 19 gainers and 35 losers recorded in the previous week. C & I Leasing led the gainers, in percentage terms, with a gain of 26.85 per cent to close at N6.85.

AIICO Insurance followed with a gain of 26.25 per cent to close at N1.01, United Capital appreciated by 17.35 per cent to close at N3.45. NPF Microfinance Bank garnered 11.7 per cent to close at N1.24 while Africa Prudential chalked up 11.1 per cent to close at N5.20 per share.

On the negative side, Law Union and Rock Insurance led the losers with loss of 36.5 per cent to close at 73 kobo. AXA Mansard Insurance followed with a drop of 10 per cent to close at N1.80. SFS Real Estate Investment Trust also dropped by 10 per cent to close at N76.95.

Forte Oil declined by 9.97 per cent to close at N16.70 while May & Baker Nigeria dropped by 9.9 per cent to close at N1.82 per share.

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