Equities space set for strong run

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Despite experiencing two consecutive losses, market analysts have said that the Nigerian stock market is likely to experience strong bullish run next week.

This is even as the market closed transactions for the week in the positive territory as the All Share Index (ASI) of the Nigerian Stock Exchange (NSE) appreciated by 0.69 per cent thanks to strong sentiments in the shares of Forte Oil, MTNN and GT Bank.

The market continued its bullish streak on Monday, recording 0.74 per cent following investors’ interest in MTNN after Nigeria’s Attorney General cancelled a $2 billion demand issued a year ago against the telecommunications operator for unpaid taxes.Consequently, market capitalisation closed at N15.287 trillion while Year-to-Date (YtD) return jumped to 10.4 per cent.

Tuesday’s session, however, saw equities market closing negative, as the benchmark index pared by 1.18 per cent – the first decline in 2020 – to settle at 29,283.15 points. The loss reportedly was spurred by investor sell-offs in MTNN, Nigerian Breweries and Dangote Cement.Investors took profit for the second time this week on Wednesday as the ASI fell by 0.8 per cent as market capitalisation dropped N114 billion to close at N15 trillion.

However, gains recorded in the shares of Dangote Cement, MTNN and GT Bank, pushed the index up by 1.0 per cent at the close of business on Thursday.

Consequently, the Year-to-Date (YTD) return improved to 9.4 per cent while market capitalisation increased by N149.4 billion to N15.141 trillion.Friday’s session saw the ASI up by 0.91 per cent closing the week at 29,618.52 points while market capitalisation closed at N15.256 trillion.

Reacting to the development in the market, analysts who spoke to Sunday Sun, were of the opinion that equities would continue to see strong runs, but advised investors to cherry-pick on stocks with sound fundamentals.

Head, Research, FSL Securities, Victor Chiazor, expressed optimism that the market would do well with investors waiting on dividends by different companies quoted on the NSE.

Chiazor said: “We have had more of positive runs than the negative ones and it shows you that investors are clearly looking at our market and the reasons are not far fetched. If you look at our macroeconomic space, things are looking up and let us not forget this is not an election year unlike last year.

“This is a different scenario as we are having oil prices above our budget benchmark, we are in a year end season where companies will be declaring their full year results and we expect dividend, the fixed income and money market space where we have yields playing around five-six per cent whereas you have companies that are giving you dividend yield of about eight-12 per cent, so with all indications, it looks like the market might not be where it ought to be, but beyond doubt in the medium to long term, more funds will come towards the equities space”.

Also speaking, Chief Executive Officer, Highcap Securities, David Adnori, said that although the market has started on a positive note, policies need to be put in place to sustain the run.He also advised investors to continue to visit their stockbrokers to be aware of what stocks to buy as well as sell.

“Yes the market has started the year on a positive note and hopefully it will be sustained. However, we need policies in place to sustain that run so that what happened last year will not happen again”.

Meanwhile, a total turnover of 2.087 billion shares worth N26.470 billion in 24,262 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 2.683 billion shares valued at N32.646 billion that exchanged hands last week in 30,956 deals.

The Financial Services industry (measured by volume) led the activity chart with 1.117 billion shares valued at N13.693 billion traded in 13,739 deals; thus contributing 53.51 and 51.73 per cent to the total equity turnover volume and value respectively.

The Healthcare industry followed with 521.893 million shares worth N182.965 million in 420 deals while the Conglomerates industry, with a turnover of 123.606 million shares worth N573.907 million in 1,164 deals.Trading in the Top Three Equities namely, Union Diagnostic & Clinical Services Plc, Access Bank Plc and Zenith Bank Plc (measured by volume) accounted for 877.992 million shares worth N8.399 billion in 5,251 deals, contributing 42.06 and 31.73 per cent to the total equity turnover volume and value respectively.

Market sectorial indices finished lower with the exception of NSE 30, NSE CG, NSE Premium, NSE Banking, NSE AFRI Bank Value, NSE MERI Value and NSE Oil/Gas index, which appreciated by 0.66, 0.64, 3.85, 2.30, 2.67, 1.74 and 0.57 in per cent respectively while NSE ASeM Index closed flat.

Twenty-one equities appreciated in price during the week, lower than 51 equities in the previous week. Forty-two equities depreciated in price, higher than 20 equities in the previous week, while 100 equities remained unchanged, higher than 92 equities recorded in the preceding week.

Forte Oil led the gainers’ chart with 21.89 per cent to close at N20.60 per share. Beta Glass followed with 18.77 per cent to close at N63.90, Glaxosmithkline increased by 13.21 per cent to close at N6, MTNN rose by 9.14 per cent to close at N126.60 while C&I leasing garnered 8.89 per cent to close at N7.35.

On the flipside, Consolidated Hallmark topped the losers’ chart with 14.29 per cent to close at 0.36 kobo per share, NEM Insurance was next with 13.66 per cent to close at N1.96, BUA Cement dropped 12.20 per cent to close at N36, TCN Plc lost 10 per cent to close at N3.15 while B.O.C Gas fell by 10 per cent to close at N4.95.