11 September 2017

Nigeria: H2'17 - Equities May Trade Above Current Level

Investment analysts in the capital market have said that prices on the Nigerian Stock Exchange, NSE, may trade around current levels and even higher towards the end of the year.

Analysts at Cowry Asset Management Limited expressed this view in a Report titled "H1 2017 Review and Outlook for H2 2017".

They projected a positive outlook for the equities market in light of expectations of stronger macroeconomic fundamentals in H2 2017 and listed some of the expected drivers to include growth in economic output, improved balance of payments position as well as lower inflation and interest rates among other things.

Specifically, they said that All Share Index, ASI, should exceed 40,000 index points or a year-to-date performance of around 50 per cent as investors anticipate even better operating performances of listed companies. "Given the rally recorded in first half, H1'17, amid boost in investor confidence, we also expect increased capital market activities as quoted companies shop for funds," they said.

Aligning to the position of Cowry Asset Management, analysts at Meristem Securities posited that the current positive momentum seen in the market might be sustained a while longer, even as other operators projected a mixed trading in the market at this week.

Meanwhile, after three weeks of successive week-on-week losses, activity in the equities market resumed an upward trend last week.

Consequently, the equities capitalisation rose by N156 billion, representing 1.27 per cent increase to N12.393 trillion compared to N12.237 trillion in the previous week. Similarly, the ASI advanced by 1.27 per cent to 35,957.24 points from 35,504.62 points, thereby pushing the year-to-date return to 33.78 per cent.

Further analysis of activities in the market showed that 28 gainers and 39 losers were recorded. Guinness Nigeria Plc led the gainers, advancing by 27.59 per cent to close at N96.33. Caverton Offshore Support Group Plc followed, appreciating by 6.25 per cent to close at N1.19, while C & I Leasing Plc ranked third with six percent increase to close at N1.06. African Prudential Plc gained 5.77 per cent to close at N3.30, while Aiico Insurance Plc went up by 5.36 per cent to close at N0.59 per share.

On the other hand, Jaiz Bank Plc led the laggards, dropping by 7.79 per cent to close at N0.71, followed by Sterling Bank Plc which fell by 7.55 per cent to close at N0.98 and Lafarge Africa that depreciated by 7.39 per cent to close at N52.77 per share.

Seplat Petroleum Development Company Plc depreciated by 6.65 per cent to close at N457.90, while Fidson Healthcare Plc closed as the last on the top five losers chart, declining by 5.69 per cent to close at N3.15 per share.

At the end of the week, investors traded 887.024 million shares worth N17.450 billion in 16,955 deals in contrast to 998.973 million shares valued at N11.455 billion that exchanged hands the previous week in 13,626 deals.

The financial services sector, measured by volume, led the activity chart with 729.177 million shares valued at N8.816 billion in 10,744 deals; thus contributing 82.20 per cent and 50.52 per cent to the total equity turnover volume and value respectively. The consumer goods sector followed with 68.153 million shares worth N6.692 billion in 2,908 deals, while the third place was occupied by the conglomerates sector with a turnover of 32.109 million shares worth N183.098 million in 687 deals.

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