10-26-2019, 11:17 AM
- Cornerstone, Cutix, PZ, Chams, UAC, 18 others caused NSE’S negative close
Cornerstone, Cutix, PZ, Chams, UAC, 18 others caused NSE’S negative close
…analysts say unimpressive macro-economic environment impacting stocks
by
The Nigerian stock market closed in red last week as investors moved to reduce their holdings in many stocks which impacted negatively on their prices. Top on the list of most affected stocks are Cornerstone Insurance Plc, Cutix Plc, PZ Cussons Plc, Chams Plc and UAC of Nigeria Plc.
Ni n e t e e n (19) equities appreciated in price last week lower than 20 in the preceding week, while 23 equities depreciated in price, lower than 33 equities in the preceding week. The market closed with 124 equities unchanged, higher than 113 equities that remained unchanged in the preceding week.
Cornerstone Insurance Plc which opened the review week at 39kobo decreased to 32kobo, after losing 7kobo or 17.95percent. Cutix Plc followed from week-open high of N1.50 to close at N1.31, losing 19kobo or 12.67percent.
P Z Cussons Nigeria Plc had declined from N6.30 to N5.55, losing 75kobo or 11.90percent. Chams Plc dipped from 26kobo to 23kobo, losing 3kobo or 11.54percent. UACN Plc was also down week-on-week (wow) from N7.15 to N6.40, losing 75kobo or 10.49percent.
“Investor sentiment continues to be negatively affected by the unimpressive macroeconomic environment. However, we believe current price levels offer a good entry point for mid/long term investors”,
Vetiva Research analysts said in their October 21 note to investors.
“We expect the index to continue to ramble in the negative territory. Our pessimism is on the back of the absence of an indicator to suggest possible triggers for a rebound in the near term”, said Lagos-based Afrinvest research analysts.
“We expect the equities market to remain lukewarm, as a weak macro environment continues to fuel scepticism of investors. However, we expect possible inflows of earnings reports to spur movement in some fundamentally sound stocks”, United Capital research stated in their most recent investment views.
UACN Property Development Company Plc lost 11kobo or 9.91percent last week, after moving down from N1.11 to N1. Glaxo Smithkline Consumer Nigeria Plc declined from N7.10 to N6.40, losing 70kobo or 9.86percent. Learn Africa Plc was also down from N1.23 to N1.11, losing 12kobo or 9.76percent. Vitafoam Nigeria Plc declined from N3.90 to N3.52, losing 38kobo or 9.74percent. Global Spectrum Energy Services Plc lost 50kobo or 9.62percent, from N5.20 to N4.70.
Some investors in most of these stocks that recorded decline moved to take profit from their recent gains on the back of the absence of indicators that suggest possible rallies in the near term.
In the trading week ended Friday, October 18 the market was down by 0.32percent. Last week’s record negative was mainly due to sell-offs in mid/large-cap stocks. This trend is expected to moderate this week as investors see opportunities for bargain hunting in fundamentally sound stocks particularly as the third-quarter (Q3) earnings trickle in at the Exchange.
The stock market which opened the review week with All Share Index (ASI) and market capitalisation at 26,533.78 points and N12.917 trillion respectively, closed the review week with ASI at 26,448.62 points and market cap of N12.875trillion. The value of listed equities on the Nigerian Stock Exchange ( NSE) decreased by about N42billion.
All the NSE sectoral indices closed in the red except the NSE Consumer Good Index (+0.12percent) and NSE Insurance Index (+2.37percent). Others are: NSE 30 Index (-0.81percent), NSE Banking Index (-2percent), NSE Industrial Goods Index (- 0.31percent), NSE Oil & Gas Index (-0.22percent), and NSE Pension Index (-1.03percent).
In the review trading week, the stock market recorded turnover of 896.610 million shares worth N16.561 billion in 12,638 deals in contrast to a total of 1.409 billion shares valued at N31.959 billion that exchanged hands the preceding week in 13,616 deals.
The Financial Services industry ( measured by volume) led the activity chart with 597.154 million shares valued at N6.721 billion traded in 7,197 deals; thus contributing 66.60percent and 40.58percent to the total equity turnover volume and value respectively.
The Consumer Goods Industry followed with 102.130 million shares worth N7.214 billion in 2,027 deals, and Service industry with a turnover of 84.001 million shares worth N377,017 million in 264 deals.
In the previous week, the performance of the equities market was largely bearish, as four out of five trading days recorded losses. The Nigerian Stock Exchange (NSE) All-Share Index (ASI) declined by 32 basis points (bps) week-on-week (w/w), to close at 26,448.6 points, with the year-to-date (YTD) loss settling at -15.9percent.
Also, market capitalisation shed about N41.5billion worth of value, closing the review week at N12.9trillion. In terms of market activity, participation levels were lacklustre, as average value and volumes traded reduced by 48.2percent and 36.2percent, to N3.3billion and 179.3million respectively.
Analysing the performance of the major sectors we cover showed mixed results, as two sectors out of the five sectors recorded gains, with the remaining receding. The Ins u rance sector (+2.4percent) led the gainers’ team, as sector heavyweights, MANSARD (+6.3percent) and CONTINSURE (+2.2percent), edged upwards. environment continues to fuel scepticism of investors. However, we expect possible inflows of earnings reports to spur movement in some fundamentally sound stocks.
Second consecutive N1trillion demand for 364-day OMO bill
Liquidity position in the money market space remained buoyant, as overall inflows for the week mildly outweighed the outflows. Liquidity level tightened at the start of the week, dragged by the weekly wholesale FX funding sales. However, a position improved on Tuesday and Wednesday, buoyed by statutory inflows, FX auction refunds, and CRR refunds (circa N200billion) to banks penalised for failure to meet minimum loan to- deposits ratio target of 60percent, between 26th (initial calculation date) and 30th September (the actual cutoff date). Meanwhile, inflows from NTB maturity on Wednesday were rolled over.
Liquidity position tightened on Thursday as market players submitted bids worth N1.1trillion at the OMO auction
Money Market.