Stock Market
GTBank, Zenith Bank, MTN record gains, investors up by N50 billion
Market breadth closed positive as ETERNA led 22 Gainers, as against 12 Losers topped by ABCTRANS.
Nigerian bourse ended Thursday’s trading session on a bullish note.
The All Share Index (ASI) gained by 0.38% to close at 25,520.97 points, as against the 0.28% drop recorded on Wednesday. Its Year-to-Date (YTD) returns currently stands at 4.92%. The Nigerian Stock Exchange Capitalization presently stands N13.313 billion. Investors gained N50.12 billion.
Nigerian Stock Exchange turnover was negative as volume dipped by 12.29% as against the 11.40% surge recorded on Wednesday. ZENITHBANK, FIDELITYBK, and MBENEFIT were the most active to boost market turnover.
SEPLAT leads the list of active stocks that recorded an impressive volume spike at the end of today’s session; followed closely by FIDSON
Market breadth closed positive as ETERNA led 22 Gainers, as against 12 Losers topped by ABCTRANS at the end of today’s session – an improved performance when compared with the previous outlook.
Top gainers
- CILEASING up 8.45% to close at N3.85
- ACCESS up 3.85% to close at N6.75
- ZENITHBANK up 3.35% to close at N16.95
- GUARANTY up 1.85% to close at N24.75
- MTNN up 0.42% to close at N120
Top losers
- FCMB down 4.87% to close at N2.15
- FIDSON down 4.52% to close at N3.8
- CUSTODIAN down 3.03% to close atN4.8
- SEPLAT down 2.50% to close at N390
- AFRIPRUD down 1.83% to close at N4.3
Outlook
Against headwinds, NSE30 Stocks paused hat-trick of trading session losses, as investors piled funds into MTN, GTBank, Zenith Bank, and Access Bank amid falling crude oil prices, and surging COVID-19 caseloads in Nigeria’s vital international markets.
However, in spite of the recent bullish run, Nairametrics remain concerned about the relatively low amount of institutional investors taking part in the Nigerian trading session in recent days, as market liquidity remains relatively thin, compared to the pre- COVID-19 period.
Stock Market
Apple, Amazon, Netflix drop over 4%, investors Jittery on COVID-19
Top tech brands drifted lower, as investors fretted over uncertainty around the COVID-19 pandemic.
U.S tech Stocks dropped massively at the last U.S trading session, adding to September’s woeful performance.
Top tech brands drifted lower, as investors fretted over uncertainty around the COVID-19 pandemic, and pending stimulus package awaited from the world’s largest economy.
What we know: Shares of Amazon and Netflix plunged by 4.1% and 4.2%, respectively, to lead Big Tech lower. Facebook dropped 2.3%. Alphabet closed 3.5% lower. Apple ended the day down 4.2%, and Microsoft dipped 3.3%.
READ: U.S stocks suffer biggest drop since June
The Dow Jones Industrial Average closed 525.05 points lower – 1.9%, at 26,763.13. Earlier in the session, the Dow was up 176 points. The S&P 500 dropped 2.4% to 3,236.92; and the Nasdaq Composite pulled back by 3%, to close at 10,632.99.
Stephen Innes, Chief Global Market Strategist at AxiCorp, in a detailed note to Nairametrics, gave deep insights on the bearish trend, in view of the tech-dominated stock index,
“Fading prospects for US fiscal stimulus, and the stepping up of mobility restrictions on concerns about the second wave of Covid-19, are smacking global stock markets again.
READ: OECD reduces global economic decline to 4.5% from earlier forecast of 6%
“The NASDAQ got hammered, after the US Department of Justice submitted a proposal for Congress to curb legal protections for tech companies, and compel them to take more responsibility for site content, following through President Donald Trump’s bid from earlier this year to crack down on tech giants,” Innes said.
He also spoke on the role of monetary stakeholders on the prevailing market condition, stating:
“The regulatory overhang is just such an imposing factor, and extremely difficult to the backburner
“Added to that, and in a not too subtle reminder, that we are still smack dab in the COVID-19 abyss, a procession of US Federal Reserve speakers voiced more concerns about the ongoing impasse on additional fiscal stimulus.”
Finally, you should note that global investors and stock traders are showing high rates of rotation out of tech, and into cyclical stocks in September.
Spotlight Stories
Nigerians in diaspora reveal their favourite Nigerian Stocks
Nigerians in the diaspora have given their thoughts on some of the Nigerian stocks that have caught their attention lately.
The Nigerian equities market has in recent weeks recorded impressive gains, as investors take positions in blue-chip stocks.
The All-Share Index and market capitalization, on Wednesday, gained 0.50%, to settle at 25,783.02 points and N13.474 trillion respectively, reducing the YTD loss to -3.92%.
As the COVID-19 virus continues to rattle global financial markets, including the Nigerian bourse, it became prevalent to seek diverse opinions about Nigerian equities. In this case, that of Nigerians living abroad.
READ: Leaked memo: CBN instructs banks to block bank account of 38 companies for “forex abuse”
Nairametrics interviewed Investment Experts, Traders and an Engineer, seeking their opinions on what Nigerian Stocks they will presently consider for a BUY.
Their responses were varied, ranging from top Banking, Industrial, and unsurprisingly, Agriculture-based stocks.
London based, Lukman Otunuga, the Senior Research Analyst at ForexTime (FXTM) said,
READ: CBN allows banks to pay winnings, salaries for 7 banned betting & gaming companies
“In a world where the coronavirus menace has created widespread chaos, disruptions, and uncertainty, no prisoners were taken.
“Oil has been one of the biggest causalities of COVID-19, down roughly 40% year-to-date (YTD), as worldwide restrictions a few months back, crippled demand for the commodity. With a fair chunk of Oil & Gas companies losing billions of dollars to the pandemic, their respective stock prices declined considerably.
“Big names in Nigeria such as Oando, LekOil, Seplat Petroleum Development Company, and 11 Plc, among others, have seen their shares depreciate between 20 to 40% + YTD. However, if Oil rebounds on stabilizing global economic conditions and a possible breakthrough in finding a COVID-19 vaccine, this could provide an opportunity for Oil & Gas companies to roar back to life – ultimately pushing stocks higher.”
READ: Trading on Nigerian equities has dropped by 44%
According to France-based Computer Engineer, and COO, Feldel Gas Limited, Oladayo Oladele,
“Generally speaking, I will be interested in stocks in the IT/Telecoms sector, which includes MTN Nigeria, Airtel, because Nigeria has a digital economy that is growing at an exponential rate. Lots of tech startups like PiggyVest, Paystack, and Flutterwave are fast becoming internationally relevant, not forgetting agriculture-based stocks like Okomu oil, as the border closure by President Buhari’s administration seems to increase their profitability in the near term. Finally, FMCG stocks, like Nestle and Unilever, as significant buying pressures from their offshore-based parent companies, shows a high room for more upside.
“My bias is that, no matter how unstable Nigeria’s economy looks presently, these domains are the least affected in my opinion.”
READ: Can Agriculture replace Oil in Nigeria?
In the words of Scotland-based Market Analyst, and an Energy Trader, Dapo-Thomas Opeoluwa, “When it comes to picking stocks from overseas, it’s a bit difficult, because we do not know how the companies are faring in the country. Sometimes we go with Warren Buffet’s recommendation of investing in a good business.
“So, to be on the safe side, we invest in the household names that give us dividends, and hopefully capital appreciation in the long run.
“I invest in Zenith; GTB; Stanbic; Sahco PLC (which are particularly promising, because of its cheap price and high potential, given how tourism might pick up, the aviation company might benefit); and Dangote Plc.
READ: Nigeria’s stock market drops by N16.88 billion
“Sometimes we go through the financials of these companies, and check if the businesses are healthy and if they’ve got what we call ‘moat’.
“Notably, because our stock exchange isn’t as fundamentally driven, as it is in England or the United States, we can’t trade stocks like we do overseas.”
Explore the Nairametrics Research Website for Economic and Financial Data
It is imperative to note that, most of the professionals interviewed seem unsurprisingly attracted to banking, energy dominated stocks, and most especially, blue-chip stocks on their prevalence to Nigeria’s economy.
Many Nigerian stocks still look greatly undervalued, and exhibit high potential for more upsides, in terms of their present price action and also attraction attributes to foreign portfolio investors in the long term.
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