Stock Market

MSCI Index places Nigerian Equities market on watchlist

The MSCI Index is closely followed by foreign investors in determining emerging markets.

Published

2 weeks ago

June 24, 2020

Olumide Adesina

MSCI; Capital Market Accessibility A Challenge in Nigeria, Other Frontier Markets

MSCI Inc., a leading provider of research-based indexes and analytics has included Nigeria in the list of Frontier Markets that have accessibility issues. MSCI mentioned this in an issued statement yesterday. The report also highlighted challenges in the Nigerian equity market having been impacted by the significant deterioration of liquidity in the Nigerian FX market.

The MSCI Index is closely followed by foreign investors in determining emerging markets to invest in and stocks to select.

MSCI also disclosed that it will not implement selected changes for any securities classified in Frontier markets that include Nigeria, Lebanon or Bangladesh in the relevant MSCI Country Indexes or in any derived indexes that contain these markets.

Here is an excerpt of the statement;

“Some market accessibility issues have been recently observed in select Frontier Markets. The Nigerian equity market has been impacted by the significant deterioration of liquidity in the NigerianFX market. While such accessibility issues may be viewed by market participants as part of the inherent characteristics of Frontier Markets, these developments have a negative impact on the replicability of the indexes. Therefore, MSCI will continue classifying these markets as Frontier Markets until further notice, while applying a special treatment to potentially reduce the number of changes in the related indexes and mitigate the index replication concerns.”

The statement continues;

“MSCI will not implement selected changes for any securities classified in Nigeria, Lebanon or Bangladesh in the relevant MSCI Country Indexes or in any derived indexes that contain these markets. This special treatment will apply to any potential changes that would be part of upcoming index reviews, as well as certain corporate event implementations. This treatment has been in effect for the MSCI Nigeria Indexes since May 13, 2020 and will be applicable to the MSCI Lebanon Indexes and the MSCI Bangladesh Indexes effective immediately.”

Victor Silas an Investment Analyst spoke to Nairametrics on the positive outlook of the Nigerian economy in lieu of positive reforms presently carried by fiscal and monetary stakeholders. He said;

“Looking at current macro developments such as the resurgence of oil prices to 40$/barrel levels from previous 25$/barrels supported by relaxation of lockdown in major economies and supply cuts by the OPEC+ members, this provides a positive outlook on FX revenue generation coupled with the exchange rate unification plan by the Central Bank and Governor’s comment on the currency.”

Victor Silas, added that if the present macro fundamentals surrounding Nigeria capital market would more likely have continual liquidity challenges. He added by saying;

“I believe we will be seeing more FX liquidity, however, if the FX liquidity issues persist, this will be negative for the Nigerian Capital market particularly in relation to FPIs.”

Consequently, the research-based firm issued a stern warning that the MSCI Argentina Index may be removed from the MSCI Emerging Markets Index if there is further deterioration in market accessibility.

“While volatility increased dramatically due to the COVID19 pandemic, global equity markets remained accessible and continued to function well, allowing issuers to raise capital and investors to manage risk during the crisis,” said Dimitris Melas, Global Head of Equity Research and Chairman of the MSCI Index Policy Committee.

However, Dr. Melas added, “In the last 12 months, two important Emerging Markets, Argentina and Turkey, suffered substantial deterioration in market accessibility that could lead to their exclusion from the MSCI Emerging Markets Index.”

Olumide Adesina

Olumide Adesina a French-born Nigerian, is an Investment Pro at Nairametrics Financial Advocates Limited. He is a Certified Investment Trader, with more than a decade working expertise in Financial Analysis & Investment Trading. A member of the Chartered Financial Analyst Society. Financial Market; Yale University, Behavioral Finance; Duke University. You can follow Olumide on twitter @tokunboadesina or email [email protected]

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Stock Market

Nigerian bourse gains N37.26 billion, triggered by BUACEMENT, ZENITH

Nigerian bourse finished on a bullish note triggered by AIRTELAFRI, BUACEMENT and ZENITH BANK

Published

14 hours ago

July 7, 2020

Olumide Adesina

Dangote Cement, Zenith Bank, shares, stocks, ARM's Shares of fortune, Understanding securities lending, nigerian stock exchange, coronavirus, NSE, Bears return ASI down 0.13% as trading volumes plunge, What’s going to happen to Nigeria’s stock market in May?, What’s going to happen to Nigeria’s stock market in May?, Nigerian bourse gains N37. 26 billion, triggered by BUACEMENT, ZENITH

The Nigerian Stock Exchange All Share Index finished today by 0.30% to 24,097.48 points, with market capitalization also adding N37.26 billion to close at N12.57 trillion.

However, trading activity was lower as evidenced by a 18.01% decline in volume of equities traded to 155.52 million units, while the value of trades also fell slightly by 6.60% to N2.60 billion. GUARANTY was the most traded by volume and value at 19.72 million units and N413.8 million.

Market sentiment, as measured by market breadth, was negative as 18 tickers declined, relative to 17 gainers. REDSTAREX and PZ were the top gainers of the day with 9.76% and 5.00% price appreciation, while OKOMUOIL and UNILEVER topped the losers with 9.95% and 9.78% depreciation in share value.

The sectoral performance was mixed as two of the five indices closed higher, while the other three closed the day in the red. The Banking Index (+0.92%) led the advancers, followed distantly by the industrial Index (+0.09%).

Conversely, the Insurance Index fell by -1.92%, while the Consumer and Oil & Gas Index fell by -0.52% and -0.02% respectively.

FCMB (+4.09%), UBA (+2.48%) and ZENITHBANK (+1.87%) lift the lenders’ Index, while BUACEMENT (+2.51%) raised the industrial Index. MANSARD (-9.66%) and CUSTODIAN (-9.09%) drove the Insurance Index lower, UNILEVER (-9.78%) and GLAXOSMITH (-8.08%) accounted for depreciation in the Consumer Goods Index and MRS (-9.78%) depressed the Energy Index. Similarly, MTNN closed the day lower by -0.86%.

Top gainers

REDSTAREX up9.76% to close N3.26,AIRTELAFRI up 3.66% to close at N328.7,BUACEMENT up 2.51% to close at N40.9,ZENITHBANK up 1.87% to close N16.35,PZ up 5.00% to close N4.2

Top losers

OKOMUOIL down 9.95% to close at N69.7,UNILEVER down 9.78% to close at N12.45,MRS down 9.78% to close at N12.45,MTNN down 0.86% to close at N115,DANGCEM down 0.79% to close at N126

Outlook

Nigerian bourse finished on a bullish note triggered by AIRTELAFRI, BUACEMENT. Nairametrics envisages market volatility will increase in the coming days as earning results are scheduled to come out.

Stock Market

Investors lose N162 billion amidst buying pressure from ZENITH, GTBANK

Published

2 days ago

July 6, 2020

Olumide Adesina

SEPLAT, GUINNESS break Nigerian bourse support levels, investors lose N49 billion , Nigerian Stock market records sixth consecutive loss, Investors lose N15.55 Billion,Nigerian Stock market records sixth consecutive loss, Investors lose N15.55 Billion

Nigerian bourse continued its bearish trend, taking no rest from previous week losses as the ASI dipped further by 1.27% to 24,026.05 index points on Monday.

Market capitalization shed N161.59 billion to settle at N12.533 trillion. Accordingly, the Month-to-Date and Year-to-Date losses increased to -1.85% and -10.52%, respectively.

Activity levels closed strong, compared to the previous trading session, as total volume and value increased by 31.45% and 83.21% to 189.69million units and N2.78billion respectively. GUARANTY was the most traded by volume and value at 60.46million units and N1.27billion.

Market sentiment, as measured by market breadth, was negative as 17 tickers declined, relative to 14 gainers. BETAGALSS and JBERGER were the top losers of the day with 9.95% and 9.81% price decline, while NAHCO and ZENITHBANK topped the gainers with 10.00% and 5.25% appreciation in share value.

Performance across sectors mirrored the broad index as three out of the five major sub-indexes we cover posted losses. Price appreciation in ZENITH and GUARANTY spurred a +1.51% gain in the Banking Index, trailed by the Insurance Index, which appreciated by 1.05%, as CORNERSTONE & AIICO INSURANCE gained.

The Consumer goods index led the laggards with (-3.18%), on Nestle -6.51% decline.  The Industrial Index -2.35% followed, due to losses in BUACEMENT (-5.00%), while the Oil and Gas index declined distantly by- 0.04%, impelled by losses in OANDO.

Top gainers

NAHCO up 10.00% to close at N2.2, ZENITHBANK up 5.25% to close at N16.05, FLOURMILL up 5.11% to close at N18.5, UBN up 1.87% to close at N5.45, GUARANTY up 0.96% to close at N21.

Top losers

BETAGLAS down 9.95% to close at N61.55, JBERGER down 9.81% to close at N16.55 NESTLE down 6.51% to close at N1175, BUACEMENT down 5.00% to close at N39.9, CILEASING down 8.43% to close at N3.8,

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Outlook

Blue-chip heavyweights, BUACEMENT, NESTLE dragged the Nigerian bourse lower on Monday’s trading session, as market liquidity improved slightly. Nairametrics recommends cautious buying as economic uncertainty strengthens amidst Q2 earning result season.

Stock Market

Royal Rumble at first trading week of Q3 2020, ASI down 1.99% WoW

Trading in the top three equities accounted for 275.099 million shares worth N2.818 billion in 3,497 deals.

Published

4 days ago

July 4, 2020

Olumide Adesina

The Nigerian stock market ended the week on a bearish note, as the All Share Index (ASI) and Market Capitalization both depreciated by 1.99% to close the week at 24,336.12 and N12.695 trillion respectively.

A total turnover of 961.833 million shares worth N9.181 billion in 20,058 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 739.375 million shares valued at N8.563 billion that exchanged hands last week in 17,248 deals.

The Financial Services industry (measured by volume) led the activity chart, with 618.714 million shares valued at N4.338 billion traded in 9,669 deals, thus contributing 64.33% and 47.25% to the total equity turnover volume and value respectively.

The Consumer Goods industry followed with 91.119 million shares worth N2.227 billion in 3,703 deals. In the third place was the Conglomerates industry, with a turnover of 60.640 million shares worth N62.779 million in 556 deals.

Trading in the top three equities namely FBN Holdings Plc, Guaranty Trust Bank Plc, and United Bank for Africa Plc (measured by volume) accounted for 275.099 million shares worth N2.818 billion in 3,497 deals, contributing 28.60% and 30.69% to the total equity turnover volume and value respectively.

13 equities appreciated in price during the week, lower than 18 equities in the previous week. 59 equities depreciated in price, higher than 43 equities in the previous week, while 91 equities remained unchanged, lower than 102 equities recorded in the previous week.