Wole Olajide
The Nigerian equities market last week closed on a positive note as the All-Share Index and Market Capitalization both appreciated by 4.45% to close the week at 24,045.40 and N12.531 trillion respectively.
An aggregate of 1.662 billion units of shares, valued at N18.205 billion in 28,791 deals were traded during the week by investors on the floor of the Exchange, in contrast to a total of 1.012 billion shares valued at N9.892 billion that exchanged hands the previous week in 17,023 deals.
The Financial Services industry led the activity chart with 1.385 billion shares valued at N11.813 billion traded in 17,117 deals; thus contributing 83.35% and 64.89% to the total equity turnover volume and value respectively. The Services industry followed with 53.551 million shares worth N128.065 million in 1,003 deals. The third place was the Consumer Goods industry, with a turnover of 53.444 million shares worth N2.780 billion in 3,607 deals.
Trading in the Top Three Equities namely, FBN Holdings Plc, Guaranty Trust Bank and Zenith Bank Plc accounted for 774.294 million shares worth N9.796 billion in 7,516 deals, contributing 46.59% and 53.81% to the total equity turnover volume and value respectively.
Thirty-nine (39) equities appreciated in price during the week, higher than twenty-eight (28) equities in the previous week.
Twenty-two (22) equities depreciated in price, lower than twenty (20) equities in the previous week, while One hundred and two (102) equities remained unchanged, lower than one hundred and fifteen (115) equities recorded in the preceding week.
Reacting to the performance of the market last week, Mr Aruna Kebira, Chief Dealer of Global View Capital Limited, pointed out that the drop in the market on Friday was due to profit taking in MTN.
According to him, the market actually saw profit taking in most of the banking stocks like UBA, First BANK, Access Bank, Guaranty and Zenith Bank last week, but the market still closed the week positive at 4.45%. So it is still very strong and still believing that the market will be looking up in the coming week.
‘’I will not be surprised at the market loss on Friday because that is always the characteristics of the market especially when there is 9 days rally, so somebody has to book profit and it happened that profit was booked in MTN. I think the market will still continue to look up even this coming week’’, he said.
As regards stocks to watch, Mr Kebira strongly recommended the BANKING STOCKS. According to him the banking sector are better positioned to operate in the post Covid-19 era.
According to him, manufacturing sector for the past two months has not been very active due to the lockdown.
“The market knows that this is about the second month that production in the manufacturing sector is not at the highest. Like last month, nothing even happened.’’
‘’You can give banking services remotely. People can do transfer, they do whatever they can with their phone via internet banking; go to the ATM and collect cash.
‘’You cannot manufacture remotely, somebody has to be there. Even in automated processes, you still need human interphase to make it work. A number of people are looking at that factor. By the time the manufacturing company begin to release their result for second quarter, it will be very dismal compared to the previous quarter in 2019. And you know the market normally react negatively to things like that.
‘’Banking stocks on the other hand ‘no dey carry last’. Even if there is going to be a drop, it might not be as much as it would be for manufacturing companies.’’
Mr Bright Otoghile, Managing Director, Gruene Capital Limited, in his reaction to market performance posited that investors have different return horizon. According to him, those that have benchmark return that the market have met will take their profit.
As regards the positive sentiment in the capital market, Mr Othoghile responded thus:
“Nigerian economy is standing on one leg based on the single fact that economic activities globally is just starting off which will actually kick start the demand for energy. You need energy to drive economic activities. ‘’The issue of energy emanating from crude oil is pre-eminent. So these are the factors that has accumulated into the positive vibrations we have seen so far. However, it is temporary. Temporary in the sense that one of the major oil gain in recent time that the major oil participants have signed to is still subject to dishonor, in the sense that many of these big dealers can take their own decision outside the agreed decision. Whatever decision they take can either create positive vibration or negative vibration in the global space; and this will affect investors’ perception. Once investors’ perception is affected, what you see becomes what you get.”
“For the market going forward, it still largely depends on the vibrations the general economy will get. What are these vibrations? How are global leaders responding to the lockdown easing? If the easing is seen as positive and the easing will bring about long term economic benefit, despite the short term human hazards it is creating, then there will be positive vibrations. Otherwise, we will be seeing a kind of ‘see-saw’ economic activities which largely will be factored into the market space.”
“So whatever you are looking at in the market space going forward, look at the entities that are going to survive the post covid-19 business order. The post covid-19 business order will largely deviate from the traditional business order we have had in last decades. So the things we should be looking out for will be those things or factors that are likely to shape the post covid-19 business order and how the human phase respond to it. So if we look into the market, you ask yourself which of the listed companies is more likely to actually take the gain or have the competitive advantage in this post covid-19 business order.”
‘’Before now, the BANKING SECTOR was actually leading in using technology to drive their business. So they are more likely to be in the forefront of the post covid-19 business order. If so, then the question will now be; which among this banking entities have a cutting edge technology infrastructure to out-do its competitors?”
‘’For the manufacturing sector, we also apply the same question. In the manufacturing space that largely do with human interaction, given the post covid-19 business order, how will these manufacturing entities that have more human interactions than technology driven interaction cope in the post covid-19 business order’’?
‘’Until these questions are answered by investors who have the money to risk into the market, we will continue to see a swift reaction to market performance.’’
TOP 10 GAINERS FOR LAST WEEK
- ARDOVA PLC (32.47%)
- WAPIC INSURANCE (26.92%)
- NIGERIAN BREWERIES (25.00%)
- CONSOLIDATED HALLMARK INSURANCE (20.00%)
- PRESTIGE ASSURANCE PLC (20.00%)
- UACN PROPERTY DEVELOPMENT COMPANY (19.48%)
- DANGOTE CEMENT (15.38%)
- ECOBANK TRANSNATIONAL INCORPORATED (12.36%)
- ROYAL EXCHANGE (10.00%)
- CUTIX PLC (9.92%)
TOP 10 LOSERS FOR LAST WEEK
- LINKAGE ASSURANCE (-16.98%)
- C & I LEASING (-10.00%)
- MCNICHOLS PLC (-8.70%)
- NEM INSURANCE (-8.09%)
- LAFARGE AFRICA (-6.78%)
- NPF MICROFINANCE BANK (-5.60%)
- WEMA BANK (-5.08%)
- COURTEVILLE BUSINESS SOLUTIONS (-4.76%)
- MAY & BAKER NIGERIA (-4.44%)
- CHAMS PLC (-4.35%)