Nigeria: NSE All-Share Falls 3.5%t As Lockdown Impacts Market Negatively

6 April 2020

The Nigerian equities market fell by 3.51 per cent last week following continuing bearish trading brought by the COVID-19 on global stock markets. Sell pressure on bellwethers amidst rising cases of coronavirus made the Nigerian Stock Exchange (NSE) All-Share Index (ASI) to close lower at 21,094.62, from 21,861.78 the previous week.

Similarly, the market capitalisation shed N399.8 billion to close lower at N10.994 trillion. All other indices finished lower with the exception of NSE Oil/Gas which appreciated by 2.33 per cent while NSE ASeM Index closed flat.

Analysts at Cordros Securities believe the bearish trend would persist this week, as weakened market sentiments are expected to pressure market returns. They, however, advised investors to take a position in fundamentally justified stocks.

A look at markets across Africa showed same negative performance except Kenya that gained 5.0 per cent and Mauriius that closed flat. Egypt's EGX 30 index lost the most, down 4.6 per cent as monetary authorities held rates steady at 10.25 per cent.

Morocco's Casablanca MASI while Ghana's GSE Composite index shed 0.8 per cent.

The BRICS markets also recorded a mixed performances with Brazil's Ibovespa index was the lone loser, shedding 6.8 per cent. Russia's RTS and South Africa's FTSE/JSE All Share indices gained 9.9 per cent and 3.8 per cent in that order as investors reacted to oil price recovery. India's BSE Sens and China's Shanghai Composite indices posted flat returns.

But performance across some of the Asian and Middle East markets was bullish as three of five indices trended northward. Saudi Arabia's Tadawul ASI rose 6.7 per cent as investors positioned for gains following oil price appreciation. Thailand's SET and Turkey's BIST 100 index gained 3.6 per cent and 1.6 per cent respectively.

On the negative side, Qatar's DSM 220 and UAE's ADX General indices declined 0.2 per cent and 0.3 per cent in that order.

According to Afrinvest (West Africa), performance in the developed markets was largely bearish across indices under their coverage. The United States S&P 500 and NASDAQ indices declined 2.4 per cent and 2.0 per cent respectively despite the government's economic stimulus. France's CAC 40 and Germany's XETRA DAX indices lost 4.5 per cent and 1.1 per cent respectively. Similarly, United Kingdom's FTSE All-Share Index declined 2.1 per cent, while Japan's Nikkei 225 and Hong Kong's Hang Seng indices closed flat.

Market turnover

Meanwhile, investors traded 1.534 billion shares worth N11.267 billion in 18,928 deals last week in contrast to a total of 1.452 billion shares valued at N14.918 billion that exchanged hands the previous week in 21,828 deals. But The Financial Services industry led the activity chart with 1.105 billion shares valued at N7.100 billion traded in 12,225 deals, thus contributing 71.9 per cent and 63.02 per cent to the total equity turnover volume and value respectively. The Industrial Goods followed with 218.471 million shares worth N1.236 billion in 1,610 deals. The third place was the Consumer Goods industry, with a turnover of 134.599 million shares worth N1.855 billion in 2,332 deals.

Trading in the top three equities namely, Sterling Bank Plc, Zenith Bank Plc and Meyer Plc, accounted for 752.359 million shares worth N3.247 billion in 4,039 deals.

In the midst of the lockdown to curtail the spread of COVID-19, the NSE moved trading to remote trading. Also, the financial market infrastructure for the Nigerian capital market, the Central Securities Clearing System (CSCS) Plc, suspended services to walk-in clients and switched to the use of digital channels.

The Chief Executive Officer of the CSCS, Mr. Haruna Jalo-Waziri, said the company remained committed to continue to serve its community and markets, leveraging its digital channels.

According to Jalo-Waziri, over the past week, they have seen their staff perform effectively in home-working arrangements with all services running efficiently as they continue to support as a financial market infrastructure.

"We continue to achieve 100 per cent performance across all services daily with our people having adapted to this new way of working. Furthermore, as part of our business continuity and governance process, we have instituted crisis management committees at both our board and management levels to ensure integrated governance and holistic coverage of our response mechanisms and practices, particularly at this unprecedented time. We assure our stakeholders and clients that CSCS will continue to ensure a high level of system stability and client service support across all business services at all times. Throughout this period, access to our offices will remain restricted to the handful of "essential services" staff required to ensure availability of critical services to our systems. As always, CSCS assures you of efficient clearing and settlement of your capital market transactions and safety of your assets at all times," Jalo-Waziri.

Also, in a move to ensure investors get adequate information and remain protected, the Securities and Exchange Commission (SEC) last week urged all companies to continue to make material disclosures to investors.

According to the market regulator, all public companies are required to continue to make material disclosures to investors on the impact of COVID-19 Pandemic on their business operations.

"They should also continue to disclose the trend and outlook for the company, and updates on implementation of business continuity plans. Public companies are to publish these disclosures on their websites and on other relevant media. Public companies who plan to conduct annual general meetings (AGMs) are required to ensure that the conduct of the meetings comply with the provisions of the Companies and Allied Matters Act, the Investments and Securities Act, the SEC Rules and Regulations, relevant government and health circulars and guidelines issued in this regard," the commission said.

Top price gainers and losers

The price movement chart showed that only 15 equities appreciated last week, lower than 34 in the previous week, while 36 equities depreciated higher than 30 equities in the

previous week.

Glaxo Smithkline Consumer Nigeria Plc led the price gainers with 24.6 per cent, trailed by Livestock Feeds Plc with 18.6 per cent. Cadbury Nigeria Plc chalked up 12.9 per cent, just as Berger Paints Nigeria Plc gained 9.8 per cent. Double One Plc added 9.8 per cent, while May Baker Nigeria Plc and NEM Insurance Plc garnered 9.7 per cent and 9.5 per cent respectively. Other top price gainers included: Meyer Plc (8.7 per cent); Union Diagnostic & Clinical Services Plc (7.6 per cent) and Champion Breweries Plc (6.6 per cent).

Conversely, Nigerian Breweries Plc led the price losers with 13.7 per cent, followed by Ecobank Transnational Incorporated with 12.3 per cent. Custodian Investment Plc shed 11.0 per cent, while Guinness Nigeria Plc dipped by 9.9 per cent. Skyway Aviation Handling Company Plc lost 9.8 per cent.

C & I Leasing Plc and Wema Bank Plc shed 9.6 per cent apiece, just as Jaiz Bank Plc, International Breweries Plc and United Capital Plc went down by 9.4 per cent, 9.2 per cent and 9.1 per cent respectively.

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