The sell-off of shares on the Nigerian Stock Exchange has triggered an N24.9 billion loss in the market capitalization of Flour Millers since the beginning of February, as wary investors offload.
It is important to note that the Nigerian Equity Market has been on the downward trend since the beginning of February, as wary investors sell off stakes in companies as the yields in the money market become attractive.
The results of this move led to a decline in the shares of companies listed on the Nigerian Stock Exchange, including a decline in the shares of Flour millers listed on the bourse.
A review of the performance of the stocks of these Flour millers on NSE revealed that the market capitalization of FLOUR MILLS, HONYFLOUR, and Northern Nigeria Flour Mills from the open of trade on February 1 till the close of trading activities on February 24 has declined from N154 billion to N129 billion.
How they have all performed
FlourMills has declined from N142.3 billion to N118.3 billion. However, the market cap of Honeywell Flour Mills has also declined, albeit marginally from N10.31 billion to N9.91 billion, while that of NNFM has declined from N1.72 billion to N1.25 billion. When added up, the three millers have lost N24.85 billion in market capitalization.
However, Flour Mills, the largest miller on NSE lost the most with N23.98 billion, as a percentage of market capitalization. Flour Mills is down by 16.85%.
At the end of trading activities on the floor of the Nigerian Stock Exchange, the shares of Flour Mills declined by 6.9% to close at N28.85 per share, as investors sell off 5,029,161 ordinary shares of the company worth N143,009,264.10.
Shares of Honeywell at the close of trading activities today declined by 1.6%, while shares of Northern Nigeria Flour Mills remained unchanged at N7.02 per share.
The Consumer good index to which the Flour millers belong has fallen by 6.1% year since the beginning of February, compared to the Nigerian Stock Exchange All Share Index -5.17%.
Best performing mining, industrial and consumer goods stocks from last week
The shares of the following mining, industrial and consumer goods companies delivered gains in excess of 6.9% for investors last week.
Market data for the week ended 9th April 2021 revealed that the Nigerian Equity space closed on a negative note, as the All-Share Index and the market capitalization depreciated by -0.66%, to close the week lower at 38,866.39 and N20.335 trillion respectively.
This bearish move has been linked to the conclusion of an impressive annual reporting season, as this leaves few incentives to bet on slightly higher returns from equities, with the rising yields in the fixed-income market.
Some industrial, mining, and consumer goods stocks delivered decent returns during the week
Despite the prevailing bearishness in the market which impacted the performance of some key consumer and industrial good stocks on NSE last week, shares of the following industrial, mining, and consumer goods companies delivered decent returns for their holders during the week.
The gains were driven by buying activities on the exchange as some analysts and investors consider them to be trading at discounts, with tremendous value. This made bargain hunters scamper for the shares of these companies during the week ended 9th April 2021.
Japaul Gold and Ventures Plc (JAPAULGOLD), W-o-W gains: 40%
The rebranded and restructured mining company with a key focus on gold exploration was the best-performing stocks on NSE last week. The company also maintained the status of the best performing mining stocks.
The shares of the gold exploration company surged by an impressive 40% last week driven by buying pressures in the shares of the company.
The company’s relatively low price driven by the recent sell-down in its shares prompted bargain hunters to accumulate additional stakes in it, in a bid to capitalize on the upward swing in its share price.
This move saw the shares of the company increase from N0.41 to N0.63 per share, representing a whopping 40% gain in just a week.
Meyer Plc (MEYER), W-o-W gains: 19.51%
The shares of the key player in the paint and decorative industry increased from N0.41 per share at the market open last week, to N0.49 per share, to print a gain of 19.51% at the close of trading activities for the week ended 9th April 2021.
Prior to this move, the shares of the company declined by 24.07%, from N0.54 at the open of trade this year, to N0.41 per share on the 9th of March 2021.
At this price, buying activities in the shares of the paint manufacturer and marketer surged owing to the actions of bargain hunters. This led to the move up to N0.49 during the week.
Flour Mills Nigeria Plc (FLOURMILLS), W-o-W gains: 6.90%
Shares of Flour Mills Nigeria Plc, one of the biggest brands in the food and agro-allied industry in Africa, surged by 6.9% last week, as the shares of the consumer goods company increased from N29.00 per share to N31 per share during the week ended 9th April 2021.
The impressive N2 per share or 6.9% gain in the shares of Flour Mills last week was driven by the buying interest in the shares of the flour miller, as investors anticipate an impressive financial performance ahead of the company’s earnings season.
This bullish move in the shares of Flour Mills pushed the market capitalization of the miller up by more than N8.2 billion on the exchange from N118.9 billion at market open to N127.1 billion at the close of the market last week.
What you should know
Ayodeji Ebo, head of retail investment at Chapel Hill Denham in Lagos, in a conversation with Bloomberg revealed that the market will be bearish in the first half of 2021.
He added that after the result season, the investing public should expect a further depression because there will be no further catalysts to drive the market.
Ayodeji suggested that the growing yield in the fixed income space will continue to be a major issue as investors will become more inclined to get a one-year Treasury bill at 7% now, than taking a risk of 8 or 9%.
Consumer goods index gains 6.16 points, driven by gains in Nestle, Flourmills and Honeywell shares
The NSE Consumer goods index gained 6.16 index points following gains in the share prices of Nestle, Flourmills and Honeywell.
The Nigerian Stock Exchange Consumer Goods Index (CGI), a market index that tracks the performance of consumer goods companies, gained a total of 6.16 index points, to close the first week of active trading in April at 556.03 index points following the gains in the shares of Nestle, Flour Mills of Nigeria and Honeywell Flour Mills.
A preview of the index performance for the week revealed that at the close of trading activities on Friday 9th of April 2021, the NSECG index appreciated by 1.12% to close the week higher at 556.03 index points, from 549.87 index points at the open of trade for the week.
In line with this, the index gained a total of 6.16 index points at the close of trade for the week.
The index performed better when compared to the market index, noting that the All-Share Index and the market capitalization depreciated by 0.13%, to close the week at 38,866.39 and N20.335 trillion respectively.
What you should know
- The NSE Consumer goods Index was designed to provide an investable benchmark to capture the performance of companies in the consumer goods sector. The index comprises the most capitalized and liquid companies in food, beverage, and tobacco.
- The index is based on the market capitalization methodology, as it tracks the performance of fifteen consumer goods companies on the Nigerian Stock Exchange which includes, Nestle, Nigerian Breweries (NB), Dangote Sugar, and International Breweries.
- The overall performance of the companies was relatively bullish, as the index closed on a positive note, 6.16 index points higher.
- FLOURMILLS (6.90%) led the gainers’ chart, followed by HONYFLOUR (4.24%), while GUINNESS (-17.27%) topped the losers list, followed by CADBURY (-3.03%).
- FLOURMILLS up by 6.90% to close at N31.00.
- HONYFLOUR up by 4.24% to close at N1.23.
- NESTLE up by 3.27% to close at N1420.
- GUINNESS down by -17.27% to close at N29.70.
- CADBURY down by -3.03% to close at N8.00.
- INTBREW down by -1.72% to close at N5.70.
- CHAMPION down by -1.33% to close at N2.22.
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