Sell pressure on equities

THE stock market since the beginning of October, being the commencement of the last quarter of the year, has been witnessing value drop in equities with occasional gains.

The fall in value of stocks around this time of the year is basically centred on investors offloading their equity holding to meet financial demands even as the big players are also not left out in this scenario.

Investors’ fears were heightened again at the beginning of trading activities on Monday when the value of equities started to plummet again, after dropping by a cumulative figure of 0.56 per cent the previous week and more so when insinuation was rife that the value of equities would continue to slid for the rest of transaction days of the year. The five trading days last week resulted in bearish outlook with All-Share Index (ASI) recording negative trend in five trading days.

The second twin performance indicator, the market capitalisation, also suffered a huge depreciation due to the dip in the prices of blue chips that used to raise indices in the market.  Investors’ low appetite for stock    The cautious investment in equities on the Nigeria Stock, Exchange (NSE), coupled with the sell pressure on most stocks in the recent time, had caused a dwindle in the prices of stocks, especially the blue-chips even as market performance indicators recorded negative trend in the cumulative trading figures in the market.

Trading in the week, after a three-day straight loss, further put to question, market watchers’ permutation that there is still potentials in most of the stocks even as they still enjoined investors to engage in long term investment not minding the profit takings and portfolio restructuring by the investors that tend to slow activities down sometimes. And this came despite some positive rise in value of equities seen in the beginning of the second quarter resulting in market value moving back and forth. The new trend in the market for some time now has been that immediately investors notice any slight gains in shares the next thing is to offload their holdings for capital gains. Besides, some of the dividends declared in the second quarter of the year have not also helped to attract the positive reactions expected from the investors as the share prices maintained southward trend as against the expected upward trend expected in their share prices.

Investors cautioned on pressure to sell
With many investors still bent on selling their holdings as a last resort to moderate their demands despite losses to be incurred as a result of selling at a value far less than the worth of their shares, investment experts have cautioned that investors should rather sell their shares at a giveaway price to seek alternative at meeting their financial demands.

The stock’s experts said investors ought to put in perspective what the workings of the stock market are all about, which is investing for a long time and more so that investment in shares needs a lot of perseverance.

Transactions in the week
Transaction activities on the floor of the NSE on Monday recorded mixed reactions as All Share Index (ASI) gained 0.8 per cent while the market capitalisation of listed equities dropped by N51 billion or 0.79 per cent.

A further review of trading in the day showed that NSE-30 Index appreciated by 0.78 points or 0.09 per cent to close at 91.86. Also, the NSE Oil and Gas Index appreciated by 4.14 points or 1.72 per cent to close at 244.23 while the NSE Food and Beverage Index, NSE Banking Index and NSE Insurance depreciated by 46.02 points, 0.37 points and 1.89 points respectively.

On the total trade in the day, a turnover of 215.05 million shares worth N2.062 billion in 3,843deals was recorded.

The banking subsector of the financial services sector was the most active during the day (measured by turnover volume), with 160 million shares worth N1.3 billion exchanged by investors in 2,141 deals. Volume in the Banking sector was largely driven by activity in the shares of, Zenith Bank Plc, UBA Plc and First Bank Plc. The insurance subsector of the financial services sector was boosted by activity in the shares of Guaranty Trust Assurance Plc, Aiico Insurance Plc and N.E.M

Meanwhile, Flour Mill of Nigeria Plc led on the gainers table with a gain of N2.00 to close at N62.00 per share while Oando Plc followed with a gain of N1.30 to close at N27.30 per share and Forte Oil gained N0.55 to close at N11.61 per share. On the other hand, NAHCO led on the price losers table, dropping by N0.22 per cent to close at N5.11 per share while Access Bank Plc followed with a loss of N0.18 per cent to close at N4.95 per share and African Paints Plc with N0.15 to close at N2.86 per share. Tuesday’s investors urge for accruing profit from the equities market resulted in another slip in the major performance indicators by 0.09 per cent.  However, turnover volume soared significantly by heavy trading in the shares of some banks and Insurance companies as 249 million shares worth N3.56 billion changed hands in 3,595 deals higher than 215.05 million units, valued at N2.1 billion exchanged in 3,843 deals.

The All-Share Index slumped 21.95, representing 0.10 per cent from 20,426.19 to lower 20,404.23, while the market capitalisation dropped by N6 billion from N6.427 trillion recorded on Monday to N6.421 trillion. Specifically, at the close of trading in the day, the banking subsector maintained its status as the most active stock with161.7 million shares, worth N1.52 billion in 1,789 deals while the insurance subsector followed with 45.5 million units worth N31.5 million in 212 deals.

Hotel/Logging subsector featured with 10.5 million shares worth N7.8 million in 71 deals.

A breakdown of activities in the banking subsector showed that Guaranty Trust Bank Plc strengthened activities in the subsector with 64.4 million shares worth N964.7 million in 399 deals, followed by UBA Plc which traded 33.4 million units, worth N94.7 million in 202 deals.  For the insurance subsector, trading was energised by activities in the shares of NEM insurance Plc with 18.8 million shares, worth N9.4 million in 74 deals while Aiico insurance Plc followed with 10.3million shares, worth N5.2 million in 81 deals.

The Hotel/Logging subsector was boosted by activities in the shares of Transnational Corporation of Nigeria Plc with 9.6 million shares worth N5.4 million in 46 deals.

On the price movement chart, 14 stocks recorded share price appreciation while 17 constituted the gainers chart, thus causing price losers to outweigh gainers.

Dangote Sugar Plc emerged the day’s highest price losers with 4.91 per cent, to close at N4.65 per share with Ecobank Transnational Incorporated plc following, shedding 4.83 per cent to close at N11.04 per share. Air-service plc and BAGCO Plc lost 4.74 and 4.74 per cent to close at N1.81 and N1.47 per share.

On the other hand, Okomu Oil Plc topped the gainers chart with 4.98 per cent loss, to close at N23.41 per share. Red Star Express Plc followed, adding 4.95 per cent, to close at N2.12 per share.

Trading in equities continued on bearish note on Wednesday, as the investors’ appetite on stocks dropped further despite low prices of shares. Specifically, the All-Share Index lost 0.15 per cent to close at 20,372.92 points, higher than the decline by 0.11 per cent recorded the preceding day to close at 20,404.23 points. Also, market capitalisation shed N9.85bn to close at N6.41tn, compared to the depreciation by N6.91bn recorded the preceding day to close at N6.42tn. Forte Oil Plc led the gainers table with 58 kobo or five per cent to close at N12.19 per share, followed by Red Star Express Plc with 10 kobo or 4.72 per cent to close at N2.22 per share. Ecobank Plc added nine kobo or 4.62 per cent to close at N2.04 per share, while Ikeja Hotel Plc rose by 13 kobo or 4.51 per cent to close at N3.01 per share. Premier Breweries Plc closed at 97 kobo, up by four kobo or 4.30 per cent. On the flip side, Custodian Insurance Plc lost 14 kobo or 4.98 per cent to close at N2.67 per share, while Cadbury Nigeria Plc dipped by 66 kobo or 4.96 per cent to close at N12.64 per share. Dangote Sugar Plc depreciated by 23 kobo or 4.95 per cent to close at N4.42 per share, while Vitafoam Plc dropped by 29 kobo or 4.94 per cent to close at N5.58 per share. CI Leasing Plc declined by four kobo or 4.94 per cent to close at 77 kobo per share. The Financial Services sector led the equities transaction volume with 216.51 million shares valued at N777.7m exchanged in 2,078 deals, as against 207.33 million shares worth N1.33bn traded in 2,002 deals the preceding day. The volume recorded in the sector was driven by transaction in the shares of Wema Bank Plc, Guaranty Trust Bank Plc, Zenith Bank Plc, First Bank Plc and United Bank for Africa Plc. Price losses suffered by major blue-chip companies on Thursday resulted in market capitalisation dropping further by N5billion. A further review of trading in the day showed that 25 companies depreciated in price, compared to 19 that constituted the losers chart. The All-share index dropped by 13.67basis points or 0.06 per cent from 20,372.92 recorded on Wednesday to 20,359.23 while market capitalisation shed weight by N5billion or 007 per cent from N6,411trillion to N6,406trillion.

Specifically, three out of the 25 companies: Eternaoil, May&Baker and Oando depreciated with five per cent mark to close at N3.80, N2.28 and N26.60 per share respectively while Cadbury followed with 4.98per cent to close at N12.01 per share.

AG Leventis lost 4.97 per cent to close at N1.72 per share while Trans Nationwide Express and Morison shed 4.96 and 4.94 per cent to close at N3.45 and N9.05 per share.

SCOA, Ekocorp, Trippleg dropped 4.91, 4.90 and 4.85 per cent to close at N5.81, N5.05 per share.

On the other hand, Ikeja Hotel and Dangote Sugar Refinery topped the day’s highest price gainer with 4.98 per cent to close at N3.16 and N4.64 per share respectively, followed by FO with 4.92 per cent to close at N12.79 per share.

Other gainers of the day’s transactions included Ecobank, Dangote Flour, Nigerian Bags Manufacturing Company, adding 4.90, 4.86 and 4.67 per cent to close at N2.14, N5.61 and N1.57 per share.

Continental Reinsurance added 4.55 per cent to close at N0.92 while Nigerian Aviation Handling Company gained 3.35 per cent to close at N5.30per share.

AIICO and Transnational Corporation also gained 3.85 and 3.39 per cent to close at N0.54 and N0.61 per share.

The banking subsector maintained its dominance in volume terms with 234million shares worth N1.3billion followed by the insurance subsector with 29million units worth N17million in 203deals.

The petroleum products subsector ranked third with 5.6million units valued at N78.4million in 365deals.

On the whole, 298.9 shares worth N2billion was exchanged by investors in 3,686.

Transaction on Friday closed on a flat note as the twin market indicators, the All-Share Index and market capitalisation depreciated further by N15 billion and 47.7 basis point to close the week at N6.391 trillion and 20,311.51.