INVESTORS TRADE N136.24BN WORTH OF NIGERIAN EQUITIES IN MARCH 2018

Equities’ trading on the Nigerian Stock Exchange for the month of March recorded a total of 10.166bn units valued at N136.241bn in 103,441 deals, representing an 14.88% drop and 28.49% rise from the 11.944bn shares exchange in the month of February for N106.025bn respectively in 112,118 deals during the month of February.

The financial services sector accounted for 5.74bn units worth N54.064bn, buoyed by the 4.005bn units of N50.264bn in 29,981deals, with 1.69bn shares of Access Bank accounting for N21.21bn in 4,844 deals, compared to the 8.437bn shares of the sector exchanged for N39.933bn in 55,075 deals. Sterling Bank 1.876bn changed hands for N4.836bn in 1,624 deals; just as Guaranty Trust Bank’s 262.801m traded for N12.524bn in 5,597 deals.

Market Roundup for Q1 2018

At the end of the first quarter of the year, Nigeria’s equity market continued to look up despite the recent technical correction that had shaken many investors and traders out of their position, slowing down market momentum since February after an unprecedented rally in January that changed the January effect, closing the last trading session of the 63-day period on a positive note as fund managers engaged in quarter-end account balancing.

Activities in the quarter under review was up, amidst mixed sentiments due to the combination of positive macro-economic data, stronger corporate earnings and growing consumer confidence and despite the socio-political instability, the nation’s rising debt profile and the government’s unclear economic reforms programme.

One factor that has been noticed over the past recent weeks is the failure of the market to react positively to the otherwise impressive 2017 full year earnings reports, which have been accompanied by high dividend payouts and yields. It is also noteworthy that major market players continue to sell down in the name of profit taking because they had factored in these numbers into their stock pricing before now, given that the stock market is a discounting machine that prices the future of a company into the present.

Nigeria’s case is seemingly not peculiar, given the continued decline of equity market indicators in the international markets, due to technical shake up of global economies and markets, despite the oscillating crude oil price over the period from $70.44 in January, down to $65 per barrel in February before ending the quarter at $69.10 near its 52-week high.

Meanwhile, despite its slide in recent weeks, the composite NSE All Share Index for the first quarter of the year still gained 3,261.32 points to close at 41,504.51 points from the opening level of 38,243.19 points, representing 8.53% growth on a huge volume of 42.87bn shares traded by market players, from previous quarter’s 23.26bn shares traded.  Within the period however, the market index touched a high of 45,321.82 basis points and a 37,646.88 low to reveal the high level of volatility within the period.

The buying volume of total transactions for the period was 45%, while selling position was 55% to continue the fourth consecutive quarter of bullish transition.

Similarly, market capitalisation for the period was up by N1.38tr to close higher at N14.99tr, from an opening value of N13.61tr, representing a 10.14% value gain, in an earnings season with mixed sentiments. This is despite the relatively stable and recovering business environment, but the massive sell offs in February and March sent shock waves to the market ahead of the 2019 election year, regardless of the improving companies, market and economic fundamentals. Market capitalization for the period was supported by the listing of additional shares of some companies at the end of their recent concluded right issues. The new listings made the effects of the price adjustments for dividend declared recently on the market capitalization to pale into insignificance.  

The better-than-expected corporate earnings released, especially towards the end of the quarter did not impact equity prices and market fundamentals, as there seemed more negative sentiment than positive reactions to the companies reported impressive numbers that had supported higher yields before now despite the relative high valuations in the market.   

It is however, good to mention that the continued intervention by the Central Bank of Nigeria (CBN) in the interbank segment of the foreign exchange market has supported the Naira’s stability against major currencies and driving national output. This has closed the gap between the interbank and black-market rates, stabilizing prices and controlling imported inflation, just as consumer price index fell for the 13^th consecutive months to 14.33% in February, to reflect the impact of monetary authority in its bid to ensure price stability and drive economic growth and development.

Meanwhile, market breadth for the period remained weak and mixed as the number of advancers outpaced decliners in the ratio of 48:31 to continue the bull market in the face of price correction to continue its fourth consecutive quarters of bullish run from three quarters in 2017.

As shown in the sectoral performance chart below, the NSE Premium, NSE Pension, NSE Industrial and NSE Banking influenced the market the most in the quarter under review. The Premium index gained 15.05%, more than double the gain by the NSEASI, followed by Pension index’s 14.84%, while NSE Industrial rose 10.96%. Other sectors that were up during the quarter included Banking, Insurance, Consumer goods, Oil and Gas. On the flipside, the only sector that was down on the quarter was NSE AseM, which shed 9.09%.  

Sectorial Indexes First Quarter Performance

The tables below list the best and worst performing stocks during the quarter.  Of the 31 stocks that suffered various levels of decline, 10 lost over 13% of their share prices, while low priced stocks, particularly insurance companies dominated the decliner table. FTN COCOA was the biggest laggard after shedding 56.52% due to impact of market forces and implementation of new price rule on the exchange that allowed share prices to fall below the previous 50 kobo per value.

The agribusiness company was followed by Multiverse with 54.17%, which has not faithfully kept to the NSE post-listing requirements before ongoing market forces impacted on its price. Nevertheless, the decline in prices on the market, should not come as too much of a surprise after the market had rallied from 2017 to first month of 2018. Many players that had positioned earlier continued booking profit.

Worst Performing Stocks in Q1 2018
Securities	Sector	Open	Close	% Change
Ftn Cocoa	Agribusiness	0.45	0.20	-56.52
Multiverse	Natural Resources	0.48	0.22	-54.17
Sovereign Insurance	Insurance	0.50	0.24	-52.00
Africa Alliance Insur	Insurance	0.44	0.22	-50.00
Unity Kapital Insur	Insurance	0.48	0.26	-45.83
Royal Exchange	Insurance	0.50	0.31	-38.00
Consolidated Hallmark Insurance	Insurance	0.50	0.33	-34.00
Cornerstone Insur	Insurance	0.47	0.37	-21.26
Guinea Insurance	Insurance	0.50	0.40	-20.00
LASACO	Insurance	0.38	0.33	-13.10

The upside for the period under review was led by banking stocks but dominated by financial services providers, with Unity Bank topping the table by 121.82% on account of initial bullish run at the beginning of the year and rumor of foreign investors entering the bank before it was canceled, followed by Wema Bank with 98%; CCNN, 96.84%; and NEM, 74%. Others are on impressive earnings reports and good dividend.

See others on the table below:

Best Performing Stocks in Q1 2018
Securities	Sector	Open	Close	% Change
Unity Bank	Financial	0.55	1.22	121.82
Wema Bank	Financial	0.50	0.99	98.00
CCNN	Industrial	9.50	18.70	96.84
NEM Insurance	Insurance	1.58	2.75	74.00
NPF Micro Finance	Financial	1.25	2.12	69.60
GSK	Healthcare	21.61	34.00	57.33
Eterna	Oil/Gas	4.26	6.65	56.10
Sterling Bank	Financial	1.13	1.73	54.87
Fidson Healthcare	Healthcare	3.71	5.70	53.64
FCMB	Financial	1.58	2.38	50.67

Investdata Trading and Investing education train move to Abuja on April 14, 2018, at Chida International Hotel, Plot 224 Solomon Lar Way, Utako District. Abuja. Time is 10.00 am  

Theme“The Power of Fundamental and Technical Analysis In Protecting your Capital In Pre-Election Year and Beyond”, holding on 14^th April, 2018.

 What to learn from our team of experts/analysts at the workshop are:

1.      ABC of Technical Analysis for trading Equity Market and other

2.      The 3 Simple trading secrets that can help anyone succeed in equities investing 

3.      The tenets of stock trading and investing Using FA & TA of the current market condition to know when to hold cash or equity.

4.      Trading and investing strategies that will help you manage your risk, protect your capital and profit from market oscillation.

5.      Self-online trading.

6.      The psychology of trading and investing and how it will make you successful.

Access to the workshop will cost a minimum of N5000 purchase of INVESTDATA comprehensive stock market trading materials to enhance your investing knowledge for profitable investment.   For more details call or text Yes to 08032055467, 08023381388 and 08179547605

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467