Goddy Egene
Investors
staked N16.193 billion on 1.511 billion shares in 15,544 deals last
week, compared with
N16.126 billion invested in 2.051 billion in 13,508
deals the previous week at the stock market amid the persistent bearish
trading.
Contrary
to the expectations that positive results by listed companies announced
last week would stem the negative, the market remained bearish leading
to the a decline of N621 billion in market capitalisation in the month
of October alone. Similarly, the Nigerian Stock Exchange (NSE) All-Share
Index (ASI) declined by 4.9 per cent in the month, with last week
accounting for 0.21 per cent of the that decline.
Two
months to the end of the year, there are no strong indications that the
market would fully turn the corner. However, market analysts and
operators see the decline as entry opportunity for investors to buy more
stocks and moderate losses.
Mr.
Ambrose Omordion said discerning investors should latch onto the
attractive valuation as a way of averaging down and recouping their
investment immediately a recovery stage sets. He
anticipated that the losing momentum would diminish as the market
reacts to seemingly impressive Q3 numbers released so far and in
expectation of more quarterly earnings reports ahead of month-end
portfolio alignments, especially as the NSE’s new lows offer investors
opportunities to position for short and medium-to-long-term views.
He said:
“Given that earnings and economic news can change trend at any time,
keep your gaze on fundamentally sound and dividend-paying stocks for
possible capital appreciation as Q3 numbers giving insight into
companies’ position and future expectations.”
Also,
the Chairman, Association of Securities Dealing Houses of
Nigeria(ASHON), Chief Patrick Ezeagu, said investors should not miss
the entry opportunity provided by the low valuations in the market.
He said
trend analysis of corporate earnings in recent times and the current
nine months results indicate that many companies across sectors have
posted higher earnings with good returns, noting that these results have
not significantly reflected in the upward movement of their share
prices.
“Very
attractive valuations exist in the market right now. What investors need
to do is to seek the full advice of securities dealers, the
stockbrokers for sound professional advice, and each investor will
receive peculiar advice based on the outcome of profiling and take
advantage of low prices,” he said.
He explained that most people selling their shares right now are speculators and not real investors.
“Every
stock market needs speculators for liquidity but they can change
investment decision in one second. Our stock market is forward looking.
Investors need not be nervous. They should consult professional
stockbrokers for sound investment decision. There is no basis for panic
sale of shares. Many companies have announced strong financial
performance with prospects of increased future earnings,” he said.
In his
opinion a stockbroker and Managing Director/CEO of Network Capital
Limited, Mr. Oluropo Dada, said the market, more than ever before,
presents an overwhelming buy opportunity for all categories of investors
in the face of the attractive valuations and CBN’s policy banning local
corporates and individuals from investing in TB.
“The
market fundamentals, despite the persistent illiquidity is still very
strong and prices of quoted securities can only go up, which will be
triggered by both arbitrage income and dividend income. Based on the
third quarter results being released by the quoted companies, especially
the banks, the market is where to be now,” Dada said.
Market turnover
Meanwhile,
the Financial Services industry remained the most actively traded with
1.301 billion shares valued at N10.020 billion exchanged in 10,204 deal.
The sector contributed 86.08 per cent and 61.88 per cent to the total
equity turnover volume and value respectively. The ICT industry followed
with 59.862 million shares worth N3.175 billion in 487 deals, while the
third spot was occupied by the Conglomerates industry with a turnover
of 53.268 million shares worth N125.514 million in 525 deals.
Trading
in the top three equities namely, Veritas Kapital Assurance Plc, Zenith
Bank Plc and FCMB Group Plc accounted for 749.819 million shares worth
N4.727 billion in 2,446 deals, contributing 50 per cent and 29.19 per
cent to the total equity turnover volume and value respectively.
In terms
of Exchange Traded Products, investors transacted 1,830 units valued at
N65, 956.10 were in seven deals compared with a total of 1,405 units
valued at N244,462.05 transacted in nine deals the previous week.
The
bonds market accounted for a total of 7,465 units of Federal Government
Bonds valued at N8.165 million exchanged in 44 deals compared with a
total of 9,018 units valued at N9.713 million transacted in 13 deals two
weeks ago.
Top price gainers and losers
The
price movement chart showed that 27 equities appreciated higher 18
equities in the previous week, while 18 equities depreciated in price,
lower than 33 equities in the previous week.
University
Press Plc led the price gainers with 24.3 per cent, trailed by
Cornerstone Insurance Plc with 18.4 per cent. AIICO Insurance Plc
chalked up 11.1 per cent, while Redstar Express Plc and Seplat
Petroleum Development Company Plc appreciated by 9.8 per cent and 9.2
per cent respectively.
Seplat
last week announced an interim dividend of N10.4 billion following a
profit after tax of N56.6 billion for the nine months ended September
30, 2019. The dividend translated to N18 per share.
Seplat
actually ended the nine months in 2019 with a revenue of N152 billion,
down from N174 billion in 2018. Financing cost declined from N17.76
billion to N11.14 billion, while profit before tax fell from N65 billion
to N56.7 billion.
However,
a lower tax of N1.04 billion paid in 2019, compared with N37 billion in
2018, boosted the 2019 PAT to N56.6 billion, as against N27.9 billion
in 2018.
According
to the Chief Executive Officer, Seplat, Mr. Austin Avuru, “2019 so
far has seen us make significant progress towards furthering our
ambitious growth strategy. Our core business remains highly cash
generative and with four rigs now operational in the field we expect to
quickly regain momentum. This is reflected in our decision to declare an
interim dividend of $29 million.”
Jaiz
Bank Plc was also among the top price gainers for the week with 8.8 per
cent, just as Glaxo Smithkline Consumer Nigeria Plc with 8.6 per cent.
Tripple Gee and Company Plc, Access Bank Plc and WAPIC Insurance Plc 8.4
per cent, 6.8 per cent and 6.2 per cent in that order.
Conversely,
Champion Breweries Plc led the price losers with 11.7 per cent, trailed
by Afromedia Plc with 9.7 per cent. Livestock Feeds Plc shed 8.0 per
cent, just as Unity Bank Plc and Law Union and Rock Insurance Plc with
6.6 per cent.
Stanbic
IBTC Holdings Plc and Lafarge Plc went up by 5.4 per cent and 4.7 per
cent in the order, while UAC of Nigeria Plc and GTBank Plc and NAHCO
went down by 4.6 per cent, 4.2 per cent and 2.4 per cent respectively.
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