Last week saw the continued dominance of the bears at the Nigerian Stock Exchange, following the huge sell pressure on banks’ shares as a result of profitability concerns over the hike in the cash reserve requirement
The Central Bank of Nigeria (CBN) had at its first Monetary Policy Committee (MPC) meeting this year raised banksâ€™ CRR on public sector deposits from 50 per cent to 75 per cent. It, however, left the CRR on private deposits unchanged at 12 per cent.
Experts told THISDAY that what happened in the market last week was not unconnected to recent news flow that the CRR on public sector deposits for banks might be moved to 100 per cent alongside the CRR on private sector deposits to 15 per cent by the Central Bank.
The market had last Monday resumed on a poor note as the benchmark index shed 0.31 per cent to close at 40,648pts. Banking stocks were mostly responsible for the decline as Zenith Bank Plc, Guaranty Trust Bank Plc and FBN Holdings Plc shook a total of 120 pts off the index. The banking sector closed with a 0.89 per cent decline.
Also, the Oil & Gas sector weighed down by OANDO, declined the most relative to other sectors as it slipped 1.67 per cent. Nestle Nigeria Plc and Nigerian Breweries Plc dampened the Consumer Goods sector performance by 0.16 per cent while the Industrials closed flat. Recording the only progress for the day was the Insurance sector which climbed 0.09 per cent.
The bears sustained their hold on the Nigerian equities market on Tuesday as the index closed 0.48 per cent lower at 40,454pts. The negative ride was sector wide as all key sectors on the bourse closed red.
The banking sector led the decline with a 1.14 per cent loss, dampened by ETI, FBN Holdings Plc, Access Bank Plc and Zenith Bank Plc. In the same vein, heavyweights in the Consumer Goods sector were as well depressed as Nestle Nigeria Plc, Nigerian Breweries Plc and Guinness Nigeria Plc closed negative.
The market remained weak on Wednesday as the benchmark index retreated 0.43 per cent or 175 points to close the day on a humble note at 40,279 points. Nigerian Breweries Plc, Dangote Cement Plc and Zenith Bank Plc were responsible for the decline on the day. Intra-day trading especially was marked with a relatively volatile trading mood.
However, there was an increase in volume of stocks exchanged by 3.5 per cent to 354.89 million units. Value transacted as well rose 35.6 per cent to N5.92 billion from the previous session.
Sell pressure continued on Thursday dragging the benchmark index southwards for the fourth straight day with 2.24 per cent reduction.
Also, trading activities on the Exchange reduced by 2.26 per cent as investors bought N335.30 million shares worth N4.75 billion, in 5,013 deals compared to N343.05 million shares worth N4.37 billion in in 5,901 deals exchanged on Wednesday. Zenith Bank Plc, TRANSCORP Plc and FCMB Group Plc were the most actively traded stocks on the day, while Nigerian Breweries Plc, Zenith Bank Plc. and FBN Holdings Plc topped the list in terms of market value.
At the close of business last Friday the Exchange’s benchmark index plummeted 2.24 per cent, recording a new low of 39,378 points,. The bears were fully in control as the bulls made away with only eight stocks on the advancersâ€™ chart at the close of trade.
Dangote Cement Plc, Guaranty Trust Bank Plc and Nigerian Breweries Plc dipped significantly, shaking 453 points off the index. The banking sector took the most hit, recording a 3.96 per cent loss led by Guaranty Trust Bank Plc, Zenith Bank Plc and FBN Holdings Plc.
Stock Market Indicators
Expectedly, most major market indicators closed northward, fuelling speculations that bargain hunting activities may help turnaround the situation in the week ahead.
Analysis of trading numbers showed that the Nigerian Stock Exchange (NSE) All-Share Index or ASI and market capitalisation depreciated by 4.92 percent to close on Friday at 38,767.29 and N12.427 trillion respectively.
Likewise, all of the NSE sector indices depreciated during the week. The NSE 30 depreciated by 5.64 per cent to close at 1,741.97, NSE Insurance by 5.19 per cent to close at 143.58, NSE Oil/Gas by 7.08 per cent to close at 300.54, NSE Lotus II by 1.73 per cent to close at 2,839.39. The NSE Consumer Goods index depreciated by 4.91 per cent to close at 996.04, NSE Banking index edged lower by 9.84 per cent to close at 368.56, the NSE Industrial Goods index sheds 2.03 per cent to close at 2,550.76 while the NSE-ASeM closed flat.
A further analysis of trading activity for the week showed that a turnover of 1.918 billion shares worth N25.134 billion in 25,346 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 1.591 billion shares valued at N23.079 billion that exchanged hands the previous week in 26,257 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.465 billion shares valued at N12.927 billion traded in 13,693 deals; thus contributing 76.37 per cent and 51.43 per cent to the total equity turnover volume and value respectively.
The Oil and Gas Industry followed with a turnover of 145.423 million shares worth N1.239 billion in 2,716 deals. The third place was occupied by the Conglomerates Industry with 137.095 million shares worth N630.718 million in 1,546 deals.
Trading in the top three equities namely, NEM Insurance Company Nigeria Plc, Zenith Bank Nigeria Plc and FBN Holdings Plc (measured by volume) accounted for 554.707 million shares worth N6.106 billion in 4,649 deals, contributing 28.93 per cent and 24.29 per cent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 225 units of NewGold Exchange Traded Funds (ETFs) valued at N459,220.00 executed in 6 deals compared with a total of 165 units of NewGold valued at N326,855 million transacted last week in 3 deals.
Similarly, 600 units of FGN bonds valued at N663,189.87 were this week traded in 7 deals compared with a total of 1,090 units of FGN bonds valued at N1.212 million transacted last week in 11 deals.
Gainers and Losers
Meanwhile, the price movement chart of the NSE displayed a total of 16 equities appreciated in prices during the week lower than 46 equities of the preceding week. Sixty-seven equities depreciated in prices higher than 39 equities of the preceding week, while 115 equities remained unchanged higher than 113 equities in the previous week.
The top 10 gainers in the top 10 category were: Seven Up Bottling Company Plc (N11.24), Julius Berger Nigeria Plc (N4.00), Totalfinaelf Nigeria Plc (N4.98), Mobil Oil Nigeria Plc (N3.00), Portland Paints and Products Nigeria Plc (26 kobo), Beta Glass Company Nigeria Plc (92 kobo), Trans Nationwide Express Plc (8 kobo), Paints and Coatings Manufactures Plc (5 kobo), Union Dicon Salt Plc (30 kobo), and Red Star Express Plc (10 kobo).
On the other hand, the top 10 losers included: Oando Plc (N3.63), Cement Company of Northern Nigeria Plc (N1.67), Union Bank of Nigeria Plc (N1.33), UBA Plc (N1.05), Pfizer Products Plc (64 kobo), National Sports Lottery Plc (11 kobo), IPWA Plc (9 kobo), Custodian and Allied Insurance Plc (30 lobo), Fidelity Bank Plc (29 kobo) and Great Nigeria Insurance Plc (9 kobo).