Equities lose N144b as investors await CBN decisions

Investors scrambled to realign their portfolios and lock in profit ahead of the meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN). A midweek selling spree left the equities market with a net capital depreciation of N143.9 billion last week as investors anxiously await the decisions of the MPC.

The MPC is scheduled to meet between today and tomorrow during which the apex bank will review its monetary policy tools and rates, in the light of current macro-economic and global outlook. While many analysts expected the apex bank to retain its current rates, some analysts said improving macro-economic performance, though still fragile, could encourage the apex bank to cut rates.

With more than two losers to every gainer, quoted equities on the Nigerian Stock Exchange (NSE) traded largely on the negative during the week. The All Share Index (ASI)-the benchmark index that tracks share prices at the Exchange, recorded a week-on-week decline of 1.12 per cent to close the week at 36,703.58 points as against its week’s opening index of 37,120.28 points.

Aggregate market value of all quoted equities also dropped from its week’s opening value of N12.847 trillion to close at N12.774 trillion. The difference between the ASI and aggregate market value was due to the listing of new shares by two companies-Unilever Nigeria and Trans-Nationwide Express. All other sectoral indices also closed negative with the exception of the NSE Oil and Gas Index, which appreciated by 0.85 per cent. Average year-to-date return depressed to 36.57 per cent.

Total turnover stood at 2.80 billion shares worth N54.78 billion in 17,792 deals last week as against a total of 1.32 billion shares valued at N13.78 billion traded in 19,169 deals two weeks ago. Financial services sector remained atop activity chart with 2.352 billion shares valued at N8.995 billion traded in 9,364 deals; thus contributing 83.88 per cent and 16.42 per cent to the total equity turnover volume and value respectively. The consumer goods sector followed with 178.982 million shares worth N16.849 billion in 4,297 deals while the third place was occupied by industrial goods sector with a turnover of 140.570 million shares worth N27.848 billion in 794 deals.

The three most active stocks were Sovereign Trust Insurance Plc, FBN Holdings Plc and Dangote Cement Plc, which altogether accounted for 1.917 billion shares worth N29.875 billion in 2,130 deals, contributing 68.37 per cent and 54.54 per cent to the total equity turnover volume and value respectively.

In the sovereign debt market, a total of 5,950 units of Federal Government Bonds valued at N6.247 million were traded in two deals, compared with a total of 2,806 units valued at N2.623 million traded in 16 deals penultimate week.

Sectoral indices showed a market-wide sell pressure. The NSE 30 Index, which tracks the 30 most capitalised stocks at the NSE, recorded a week-on-week decline of 1.37 per cent. The NSE Consumer Goods Index recorded the highest loss of 2.89 per cent. The NSE Banking Index depreciated by 1.29 per cent. The NSE Insurance Index dipped by 1.98 per cent while the NSE Industrial Goods Index declined by 1.03 per cent.

There were 20 gainers against 43 losers last week as against 30 gainers and 29 losers recorded in the previous week. AG Leventis Nigeria recorded the highest gain, in percentage terms, of 27.3 per cent to close at 70 kobo. Forte Oil followed with a gain of 10.3 per cent to close at N48.62 while BOC Gases rose by 9.9 per cent to close at N4.56 per share. On the other hand, Caverton Offshore Support Group recorded the highest loss of 21.4 per cent to close at N1.32. Linkage Assurance dropped by 17.7 per cent to close at 56 kobo while C & I Leasing declined by 13.8 per cent to close at N1.44 per share.

“Despite the noticeable easing of external sector pressures and improving growth prospect, we believe that in line with outcomes of previous meetings held this year, the MPC would retain rates at current level, owing to the fragility of the economic recovery and disappointing inflation numbers witnessed so far in third quarter 2017,” Afrinvest Securities stated.

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