After reversing its two-week losing streak the previous week, the Nigerian equities market again relapsed last week despite the addition of three more securities to the basket pool of stocks in the market-making basket.
The equities market had returned to positive territory the previous week helped by the activities of bargain hunters to take position for possible future gains after two weeks of profits taking.
Trading last Monday resumed on a poor note and fell on Tuesday as trading activities witnessed intense sell pressure across all sectors as reflected by the NSE sector indices.
However, the market went up on Thursday, extending the gains of prior trading day (Wednesday) as three more securities were added to the pool of stocks in the market-making basket.
The stocks in the market making basket enjoy daily band limit of +10/-10 per cent instead of the +5 per cent /-5 per cent observable for other listed stocks. The inclusion of the three stocks namely: Dangote Flour Plc, Unity Bank Plc, and Prestige Assurance Plc increased the basket of stocks to a total of thirty-two (32).
The news of the addition of more securities to the pool of stocks in the market-making basket impacted the market positively at the close of trading last Friday as the market closed firmer. But the heavy losses recorded in the first two days of the week did not allow the three days rally to reflect positively on the overall performance of the market for the whole week.
Consequently, the Nigerian Stock Exchange's (NSE's) benchmark All-Share Index, depreciated by 1.19 per cent.
The ASI, which opened the week at 26,718.30 closed at 26,400.94 thereby depreciating 317.36 points or 1.19 per cent. Also, the market capitalisation of the listed equities dropped by N101.133 billion or 1.19 per cent to close at N8.413 trillion.
In the same vein, the NSE-30 Index, the NSE Consumer Goods Index, the NSE Banking Index, the NSE Oil/Gas Index and NSE Lotus II Index dropped by 1.18 per cent; 1.48 per cent; 1.24 per cent; 2.65 per cent; and 1.47 per cent respectively, while the NSE Insurance Indices appreciated by 0.29 per cent.
A further analysis of the trading results showed that investors sold a total of 1.293 billion ordinary shares worth N9.414 billion made in 19,825 deals, in contrast to a total of 1.189 billion shares valued at N11.491 billion that exchanged hands the previous week in 22,277 deals.
The Financial Services sector (measured by turnover volume) accounted for 876.900 million shares valued at N5.328 billion traded in 11,454 deals. The Oil and Gas sector (measured by turnover volume) followed with for 135.055 million shares valued at N186.919 million traded in 1,161 deals. The Consumer goods sector (measured by turnover volume) was third with 92.782 million shares valued at N3.119 billion traded in 3,850 deals. The top three sectors accounted for 1.105 billion shares valued at N8.634 billion traded in 16,465 deals, thus accounting for 85.42 per cent, 91.71 per cent and 83.05 per cent of the volume, value and number of deals respectively.
Beco Petroleum Product Plc of the Petroleum and Petroleum Products Distributors subsector was the most active with a volume of 105.093 million units followed by First Bank of Nigeria Plc (Banking subsector) and Afromedia Plc (Advertising subsector). The top three equities with a total volume of 276.519 million units of shares contributed 21.38 per cent and 16.81 per cent respectively to the total turnover and value for the week.
Also included in the transactions for the week were 350 units of NewGold Exchange Traded Fund valued at N925.000 traded in 4 deals. Also, 1000 units of Crusader Nigeria Plc Irredeemable Convertible Debenture valued at N100,000 was traded during the week in 1 deal. However, there were no transactions in the Federal Government Development Stocks and State/Local Government Bonds sectors.
Price Change Summary
Analysis of the equity price movements indicated that 23 equities gained while 43 equities recorded price declines and prices of 132 equities remained constant. When compared with the preceding week, 30 equities gained while 39 equities recorded price declines and prices of 129 remained constant. The top 10 gainers were: Cadbury Nigeria Plc (N1.39); NCR (Nigeria) Plc (N1.31); Ashaka Cement (N0.89); UACN Property Development Company Plc (N0.58); International Breweries Plc (N0.55); PZ Cussons Nigeria Plc (N0.46 ), Presco Plc (N0.45); Lafarge Cement WAPCO Nigeria Plc (N0.44); National Salt Company of Nigeria Plc (N0.42); Zenith Bank Plc (N0.20).
Conversely, the top 10 losers included: Nestle Nigeria Plc (N31.83); Guinness Nigeria Plc (N13.15); Glaxo Smithkline Consumer Nigeria Plc (N 2.15); Julius Berger Nigeria Plc (N1.51); CAP Plc (N1.49); Dangote Cement Plc (N1.45); Oando Plc(N1.20);Seven-Up Bottling Company Plc (N0.95); Conoil Plc (N0.89o); First Bank of Nigeria Plc (N0.79).
Meanwhile, the inclusion of the three stocks from Consumer Goods and Financial Services Sectors respectively, which became effective last Thursday, is in line with the planned phased introduction of stocks to the market from the baskets of market makers on the Exchange.
The roll period for all the stocks quoted on the Exchange is six months. This takes place every fortnight since inception September 18, 2012.
The thirty-three stocks covered by the programme now are: PZ Cussons Nigeria Plc; Nigerian Bag Manufacturing Company Plc; Presco Plc; International Breweries; Lafarge Wapco; Fidson Healthcare Plc; Redstar Express Plc; Zenith Bank Plc; Sterling Bank Plc; D.N.Meyer; Diamond Bank; FCMB; Fidelity Bank Plc; Nigerian Breweries Plc; Guaranty Trust Bank Plc and UAC Nigeria Plc. (UACN).
Others are: Access Bank; Academy Press; Custodian & Allied Insurance; First Bank Plc; Dangote Sugar Plc; Union Bank Plc, NASCON and Nestle Nigeria Plc as well as AIICO Insurance Plc, United Bank for Africa Plc; 7Up Bottling Plc; Ecobank Plc; Skye Bank Plc UAC Property and Dangote Flour Mills Plc, Prestige Assurance Plc and Unity Bank Plc.
New Growth for NSE Index
Meanwhile, analysts at FSDH Securities Limited, said the macroeconomic developments in Nigeria and initiatives in the financial system, specifically in the equities market, should further drive the equities performance in fourth quarter (Q4) of, 2012. According to them, the ASI is likely to close the year at 32.05 per cent or 27,375.19 points.
They said their high expectation is hinged on the premise that most companies results released up till date have shown improved performances with wide margins against previous years.
They, however, warned that there are some challenges which might adversely impact the market.
"We are of the opinion that the equities market will close year 2012 remarkably better than it recorded in the last five years. We think the NSE ASI has the capacity to achieve a growth rate of 25.46 per cent in the second half of the year. This will lead to a growth rate of 32.05 per cent for the year 2012. Thus, our forecast for NSE ASI is 32.05 per cent to end the year 2012 and this will generate NSE ASI of 27,375.19 points," they said.