This week was a bearish one on the Nigerian Stock Exchange. The All Share Index opened at 32,907.33 basis points and closed at 32,124.94 basis points, down 2.38%. Year to date, the index is down 16%.
18 equities appreciated in price during the week, lower than 26 in the previous week. 50 equities depreciated in price, higher than 42 of the previous week. 101 equities remained unchanged the same with the prior week.
Presco Plc was the best performing stock this week. The stock opened at N53 and closed at N59.85, up 12.92% or N6.85. Year to date, the stock is down 12.63%.
Neimeth International Pharmaceuticals Plc
Neimeth International Pharmaceuticals Plc opened at N0.54 and closed at N0.60, up N0.06 or 11.11%. Year to date, the stock is down 20%.
Consolidated Hallmark Insurance Plc
Consolidated Hallmark Insurance gained 10% this week. The stock opened at N0.30 and closed at N0.33, up N0.03. Year to date, the stock is down 34%.
Newrest ASL Plc
Newrest ASL Plc opened at N6 and closed at N6.60, up N0.60 or 10%. Year to date, the stock is up 10.92% and is trading at a year high.
C&I Leasing Plc
C&I Leasing Plc gained 9.80%. The stock opened at N2.55 and closed at N2.80, up N0.25. Year to date, the stock is up 117.05%, and is one of the best performing on the NSE year to date.
Livestock Feeds Plc
Livestock Feeds Plc appreciated by 9.62% this week. The stock opened at N0.52 and closed at N0.57, up N0.05. Year to date, the stock is down 31.33%.
International Breweries Plc
International Breweries Plc opened at N31 and closed at N33.55, up N2.55 or 8.23%. Year to date, the stock is down 38.44%.
Learn Africa Plc
Learn Africa Plc added 7.27%. The stock opened at N1.10 and closed at N1.18, up N0.08. Year to date, the stock is up 34.09%.
Mutual Benefits Assurance Plc
Mutual Benefits Assurance Plc opened at N0.28 and closed at N0.30, up N0.02. Year to date, the stock is down 40%.
Sterling Bank Plc
Sterling bank rounds up the top 10 gainers with a 6.67%. The stock opened at N1.50 and closed at N1.60, up N0.10. Year to date, the stock is up 48.15%.
Unity Bank Plc
Unity Bank Plc was the worst performing stock this week. The stock opened at N0.90 and closed at N0.71, down N0.19. Year to date, the stock is up 33.96%.
The bank was briefly suspended this week by the NSE for non submission of its results when due. On Friday, it finally released its FY 2017 and first, second, and third quarter 2018 results. The NSE lifted the suspension, in turn.
Dangote Flour Mills
Dangote Flour Mills opened at N7.35 and closed at N5.80, down 21.09%. The decline may be in reaction to the sharp decline seen in its Q3 2018 results released this week. Year to date, the stock is down 52.5%.
Cement Company of Northern Nigeria Plc
Cement Company of Northern Nigeria Plc shed 18.84% this week. The stock opened at N24.95 and closed at N20.25, down N4.70. Year to date, the stock is up 113.16%.
Meyer Plc opened at N0.68 and closed at N0.56, down N0.12 or 17.65%.
This week, the company released its results for the third quarter ended September 30, 2018. Revenue dipped slightly from N778 million in 2017 to N752 million in 2018. The company made a profit before tax of N186 million as against a loss before tax of N156 million.
Year to date, the stock is down 20% and is trading at a year low.
Diamond Bank Plc
Diamond Bank suffered a reversal this week, in terms of pricing. The stock, which was the best performing last week (up by 20%), shed most of its gains.
The stock opened at N1.44 and closed at N1.20, down N0.24, or 16.67%. Year to date, the stock is down 20%.
The uptick in price last week was due to news of new investors, taking up a stake. The bank has since debunked the reports, but they remain persistent.
FBN Holdings fell by 15% this week. The stock opened at N9 and closed at N7.65, down N1.35. Year to date, the stock is down 13.07% and trading at a year low.
Fidson Healthcare Plc
Fidson Healthcare Plc opened at N5.40 and closed at N4.60, down N0.80 or 14.81%. Year to date, the stock is up 24.32%.
Niger Insurance Plc
Niger Insurance Plc shed 14.29% this week. The stock opened at N0.28 and closed at N0.24, down N0.04.
PZ Cussons Nigeria Plc
Fast Moving Consumer Goods giant, PZ Cussons, declined by 13.04% this week. The stock opened at N11.50 and closed at a 5 year low of N10. Year to date, the stock is down 51.46%.
Eterna Plc opened at N6.20 and closed at N5.45, down N0.75 or 12.10%. Year to date, the stock is up 34.24%.
Banking Index slumps to 375.35 Index points, as Sterling and Wema shares lose over 10%
The NSE Banking Index in the first week of March declined by 1.94% to close at 375.35 index points.
The Nigerian Stock Exchange Banking Index at the close of trading activities in the first week of March, declined by 1.94% to close at 375.35 index points.
This is according to data from the Nigerian Stock Exchange, seen by Nairametrics.
The slump was due to the underperformance of most banking stocks during the week, notably, Sterling and Wema Bank which recorded the worst decline of 14.04% and 12.70% respectively, for the period under review.
This loss placed the aforementioned banks in the top 10 decliners for the week. It is also pertinent to note that only Unity Bank (among the listed banking stocks) emerged in NSE top 10 gainers for the week, with a share price appreciation of 8.96%.
Nairametrics had earlier reported that investors in the elite banks in Nigeria (FUGAZ) lost a total of N34.68 billion in a single trading session on Thursday, 4th of March 2021, due to downward pressure on their respective share prices caused by sell-offs.
On the other hand, the Financial Services Industry led the activity chart by volume with 1.63 billion shares valued at N10.73 billion traded in 13,269 deals; thus contributing 78.06% and 36.06% to the total equity turnover volume and value respectively.
What you should know:
- The NSE Banking Index had earlier appreciated by 0.69% to close at 382.76 index points, last week.
- On a general note, the NSE All-Share Index and Market Capitalization depreciated by 1.18% to close the week at 39,331.61 and N20.578 trillion respectively.
- Trading in the top three equities namely Wema Bank Plc, Axamansard Insurance Plc, and Zenith Bank Plc (measured by volume) accounted for 903.561 million shares worth N5.564 billion in 4,017 deals.
- A total turnover of 2.092 billion shares worth N29.744 billion in 24,238 deals were traded this week by investors on the floor of the Exchange.
How instability in the FX market trigger foreign investors apathy in Nigeria’s equities market
Chukwu has explained how foreign exchange crises have negatively impacted foreign investors’ sentiment in Nigeria’s equities market.
The Chief Executive Officer of Cowry Asset Management, Mr Johnson Chukwu, has explained how a combination foreign exchange crises have negatively impacted foreign investors’ sentiment in Nigeria’s equities market.
The analysis was in response to the recent Nigerian Stock Exchange’s Domestic and Foreign Portfolio Investment Report for January 2021, which showed that domestic participation in the equities market outperformed foreign transactions, as the latter could only account for 20% of the total market activities.
The report further indicated a downward trend in the share of foreign participation in the equities market, from about 51% in 2018 to 20% as at January 2021.
Reacting to the development, Mr Chukwu in an interview with Arise TV blamed the combination of FX liquidity crisis and instability of the Nigerian foreign exchange market as underlying causes for the downward trajectory.
He said: ‘’If you look at the trend in the past three years, you will observe that foreign portfolio investment into Nigerian equities market has been declining. In 2018, it was 51% of the entire market, so they actually trumped local investors. By 2019, it declined to 49%, implying that the local investors had trumped them. However in 2020, they only accounted for 34% of the entire market, it further came down to 20% by January 2020. Of course, we know those factors that are driving away foreign portfolio investment in the country, and until those factors are addressed, we are likely to see the trend continue.”
On how FX instability and illiquidity contributed to the decline, Mr Chukwu remarked that: “The main factor that drive foreign inflow into the economy is the liquidity in the FX market. Foreign investors want to be able to convert back to their foreign currencies when they want to exit. If there is no liquidity in the FX market, foreign portfolio investors stay away from the market. As you know, the Nigeria FX market witnessed locking of foreign portfolio investors who sold their investments and wanted to exit, but they could not access FX to exit. So because those people couldn’t exit, new investors couldn’t come in. You can’t really go into a market when people are trapped.
“Another factor that could influence them is the stability or predictability of the exchange rate. But the most important factor is the liquidity in the FX market. If you look at the year, these foreign portfolio investments were impressive, oil price was quite strong, for example in 2018, they brought in about N1.2 trillion accounting for 51% of the market activities.”
On the flip side, Mr Chukwu explained why local investors’ participation has been growing. He attributed the increase to the collapse of interest rates and the impressive returns posted by the NSE last year.
‘’The basic thing that happened was that because local interest rates collapsed last year and they remain very low even in January, , local investors particularly institutional investors are underweighting their portfolios in fixed income and overweighting them in equities. When interest rates are very low, investors will switch to the instruments that will give them high yield and in this instance, variable income assets like equities and that was what happened last year and is still happening now,’’ he said.
What you should know
- Nairametrics reported that despite a bullish run of the NSE in 2020, total investments in the Nigerian stock market as at January 2021 dipped by 13.7% M-o-M.
- Total foreign transactions as at the aforementioned period stood at N47.52 billion, while domestic transactions stood at N184.94 billion.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Seplat falls into a loss in FY 2020
- 2020 FY Results: Cornerstone Insurance Plc reports a 61.1% decline in profit
- Ellah Lakes increases operating expenses by 33.36% in HY 2020
- 2020 FY Results: Nigerian Breweries reports a 54.3% decline in profits in 2020
- Abbey Mortgage Bank projects N51.08 million profit in Q2 2020.