December 2, 2020

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Nigerian equities lose N470b amid profit-taking

3 min read

Taofik Salako, Deputy Group Business Editor

 

AFTER eight consecutive weeks of sustained price appreciation, Nigerian equities were at the weekend overwhelmed by profit-taking transactions as investors sought to monetise price gains that had seen several equities reaching new highs in recent weeks.

Benchmark indices for Nigerian equities at the weekend indicated a net loss of N470 billion during the week, implying average decline of 2.57 per cent for the week. The decline cut the average year-to-date return for Nigerian equities to 27.18 per cent, with average gain so far this month dropping to 11.81 per cent.

Aggregate market value of all quoted equities at the Nigerian Stock Exchange (NSE) closed weekend at N17.838 trillion as against N18.308 trillion recorded as opening value for the week. The All Share Index (ASI)- the benchmark value-based index that tracks share prices of all quoted companies on the NSE, declined from the week’s opening index of 35,037.46 points to close weekend at 34,136.82 points.

Sectoral analysis showed widespread profit-taking transactions across the sectors, especially within the mid and large-cap stocks in the banking, manufacturing and oil and gas sectors. The NSE 30 Index- which tracks the 30 largest companies on the NSE, recorded above average decline of 3.08 per cent for the week. The NSE Banking Index recorded the highest price depreciation with an average decline of 5.98 per cent. The NSE Oil and Gas Index dipped by 4.38 per cent. The NSE Consumer Goods Index depreciated by 4.29 per cent while the NSE Industrial Goods Index dropped by 0.66 per cent. The NSE Insurance Index was the contrarian with modest gain of 0.51 per cent.

The negative overall market performance was driven by decline in share prices of many large-cap stocks. FBN Holdings declined by 12.12 per cent. Union Bank of Nigeria lost 11.29 per cent. United Bank for Africa (UBA) dropped by 10.9 per cent. Dangote Sugar Refinery declined by 7.7 per cent. Flour Mills of Nigeria dropped by 7.4 per cent. Stanbic IBTC Holdings depreciated by 6.5 per cent. Zenith Bank lost 5.7 per cent while Dangote Cement dropped by 3.4 per cent.

Price movement analysis showed that there were 21 gainers to 55 losers, a major decline from the previous week, which had 69 gainers against 12 losers.

Other major decliners included Coronation Insurance, which dropped by 21.15 per  cent; Oando, -19.75 per cent; Japaul Oil & Maritime Services, -18.18 per cent; Transnational Corporation of Nigeria, -13.04 pr cent; Sterling Bank, -11.93 per cent; Nigerian Aviation Handling Company, -11.54 per cent; Fidelity Bank, -11.42 per cent and FCMB Group, which dropped by 11.40 per cent.

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BOC Gases rode o the back of acquisition deal to the highest gain of 39.88 per cent. Tripple Gee and Company followed with a gain of 19.57 per cent. NEM Insurance rose by 17.27 per cent. AIICO Insurance appreciated by 12.22 per cent. Ikeja Hotel rose by 10 per cent. Linkage Assurance chalked up 10.1 per cent while Conoil rose by 9.45 per cent.

Total turnover for the week stood at 11.40 billion shares worth N35.89 billion in 39,265 deals as against a total of 4.509 billion shares valued at N58.733 billion traded in 47,140 deals two weeks ago.

The construction and real estate sector led the activity chart with 8.529 billion shares valued at N6.055 billion traded in 438 deals; thus contributing 74.82 per cent and 16.87 per cent to the total equity turnover volume and value respectively. Activities in the real estate and construction sector were driven by the acquisition transactions on UACN Property Development Company (UPDC).  The financial services sector followed with 1.991 billion shares worth N19.933 billion in 21,725 deals while the conglomerates sector placed third with a turnover of 423.702 million shares worth N526.698 million in 1,962 deals.

The three most active stocks were UACN Property Development Company, Transnational Corporation of Nigeria and Jaiz Bank, which altogether accounted for 9.259 billion shares worth N6.639 billion in 1,958 deals, contributing 81.22 per cent and 18.50 per cent to the total equity turnover volume and value respectively.

Also, a total of 21,455 units of Exchange Traded Products (ETPs) valued at N174.674 million were traded in 15 deals compared with a total of 986,941 units valued at N4.685 billion traded in 62 deals penultimate week.

In the debt segment, a total of 11,014 bond units valued at N15.257 million were traded in 15 deals compared with a total of 13,332 units valued at N17.142 million traded in 19 deals two weeks ago.

Most analysts still believe the profit-taking was a temporary slope in the upward pricing curve for Nigerian equities citing corporate earnings, attractive valuation and depressed yield in the fixed-income market.