The Nigerian stock market rose further last week to close 1.55 per cent higher as investors reacted positively to development in the economy especially in the area of capital flow that showed improvement.
According to data released by the National Bureau of Statistics (NBS), capital inflows into the domestic economy recorded a notable improvement in the three months to September 2017, expanding by 127.5 per cent year on year(y/y) and 131.3per cent quarter on quarter(q/q) to $4.15 billion (highest since Q4-14), from $1.82 billion and $1.79 billion respectively. Portfolio Investment (259.2 per cent q/q and 200.7 y/y to $2.77 billion) accounted for the most (67 per cent) inflows into the country in the review period, followed by other investments (30 per cent) in the form of loans and other claims (68.6 per cent q/q and 124.5 per cent y/y to $1.26 billion), and three per cent from foreign direct Investment.
The development, which showed improved investor confidence in the economy, led to a consolidation of the growth recorded in the market the previous week with the Nigerian Stock Exchange (NSE) All-Share Index (ASI) rising to 1.55 per cent to close at 37,944.60.
Consequently, the year-to-date (YTD) growth climbed to 41.2 per cent. Apart from the NSE ASI that rose by 1.55 per cent last week, other sectoral indicators closed northwards as well.
For instance, the NSE Insurance Index led with 1.54 per cent, followed by the NSE Banking Index (1.43 per cent, while the NSE Oil & Gas Index appreciated by 1.43 per cent. The NSE Consumer Index added 1.34 per cent, just as the NSE Industrial Goods Index gained 1.15 per cent.
Market analysts at Cordros Capital Limited said: "Whilst noting possibility of momentum profit taking given the two consecutive weeks of gains, the outlook for equities remains broadly positive as market fundamentals (amid improving macroeconomic conditions) remain strong."
On the economic front, the Central Bank of Nigeria (CBN) released the Purchasing Managers' Index (PMI) report for the month of November, showing that manufacturing and non-manufacturing activities during the month of November expanded for the eighth and seventh months, respectively at 55.9 and 57.6, indicating positive response to improvement in the macroeconomic landscape.
"With festivity- related demand expected, amid sustained improvement in the FX space and strengthening consumer and business confidence, it is safe to expect continued expansion in the coming month," analysts said.
Daily Market Performance
On the first day of the week when the market resumed, it was a bearish performance with the NSE ASI declining by 0.31 per cent as investors took profit following the previous week's gains. The depreciation recorded in the share prices of Stanbic IBTC, FCMB Group, ETI, Flour Mills, and Unilever was mainly responsible for the loss recorded in the Index.
Sector performance was mixed as three of five indices closed in the green, one trended southwards and the other flat. The NSE Banking Index emerged the lone loser, down 0.6 per cent owing to price depreciation in Ecobank Transnational Incorporated ( -3.0 per cent), Zenith Bank (-1.0 per cent) and Access Bank(-0.6 per cent). On the positive side , the Consumer Goods Index led gainers, up 0.3 per cent due to upticks in Nigerian Breweries (+0.9 per cent), Dangote Sugar Refinery (+3.3 per cent) and PZ (+3.4 per cent). The NSE Insurance Index trailed, up 0.2 per cent on account of gains in Continental Insurance (+2.9 per cent) and Law Union (+4.9 per cent). Similarly, buying interest in Forte Oil (+2.5 per cent) pushed the NSE Oil & Gas Index 0.1 per cent higher.
The market rebounded on Tuesday as the NSE ASI appreciated by 0.68 per cent to close at 37,503.73 points compared with the depreciation of 0.31 recorded the previous day. The appreciation recorded in the share prices of Nigerian Breweries, Stanbic IBTC, Access Bank, UBA and Dangote Cement buoyed the growth recorded in the index.
In a similar vein, the market rose further on Wednesday to sustain the growth as most stocks appreciated. Subsequently, the NSE ASI appreciated by 0.55 per cent to close at 37,709.20.
On Thursday, which was the last trading day of the week , saw the market gain 0.62 per cent to bring the weekly growth to 1.55 per cent of the NSE ASI to 37,944.60.
It was a four-day trading week as the Federal Government of Nigeria declared Friday, 1 December, 2017 as a Public Holiday to mark Eid-el-Maulud celebration.
However, the volume and value of trading surged to 14.257 billion shares worth N35.056 billion in 17,379 deals compared to 2.182 billion shares valued at N22.795 billion that exchanged hands last week in 17,019 deals.
The Conglomerates Industry led the activity chart with 11.396 billion shares valued at N14.534 billion traded in 890 deals, thus contributing 79.94 per cent and 41.46 per cent to the total equity turnover volume and value respectively. The Financial Services Industry followed with 2.484 billion shares worth N9.797 billion in 9,205 deals. The third place was occupied by Consumer Goods Industry with a turnover of 164.156 million shares worth N8.127 million in 4,405 deals.
Trading in the top three equities namely - Transnational Corporation of Nigeria Plc, Wapic Insurance Plc and Fidelity Bank Plc (measured by volume) accounted for 12.998 billion shares worth N15.494 billion in 1,813 deals, contributing 91.17 per cent and 44.20 per cent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 1,090 units of Exchange Traded Products (ETPs) valued at N14,708.50 executed in 10 deals, compared with a total of 127 units valued at N13,837.30 that was transacted previous week in five deals.
A total of 21,670 units of Federal Government Bonds valued at N23.125 million were traded this week in 17 deals, compared with a total of 9,024 units valued at N9.485 million transacted two weeks ago in 15 days.
Price Gainers and Losers
Meanwhile, 39 equities appreciated in price during the week, higher than 36 of the previous week, while 23 equities depreciated in price, lower than 24 equities of the previous week. Fidelity Bank Plc led the price gainers with 21.1 per cent, trailed by Forte Oil Plc with 14.9 per cent, just as Law Union & Rock Insurance Plc appreciated by 14.7 per cent.
Caverton Offshore Support Group Plc rose by 14.4 per cent, while Dangote Flour Mills Plc, Nigerian Aviation Handling Company Plc and Cement Company of Northern Nigeria Plc chalked up 10.2 per cent and 10.0 per cent respectively.
Cadbury Nigeria Plc, Diamond Bank Plc and Champion Breweries Plc garnered 9.7 per cent, 8.6 per cent and 6.8 per cent in that order.
Conversely, Double One Plc led the price losers with 6.0 per cent, followed by University Press Plc with 5.5 per cent, just as Neimeth International Pharmaceuticals Plc shed 4.9 per cent. Livestock Feeds Plc went down by 4.5 per cent, while Guinness Nigeria Plc traded 4.4 per cent lower.
Other top price losers are: Flour Mills of Nigeria Plc (4.2 per cent); PZ Cussons Nigeria Plc (4.2 per cent); Learn Africa Plc (4.1 per cent); Morison Industries Plc and N.E.M Insurance Plc (3.4 per cent).