Investors shun professional information

AGAINST the belief that most investors would rely on professional information to approach the market, sentiment became the major driver of trading last week, as most investors only bought shares based on expectation that they would appreciate more next year. This sentiment led to the increase in turnover, especially in the financial service sector of the market.  The market experienced gains in three days, while losing only on Wednesday and Thursday. The NSE All-Share Index appreciated by 240.91 or 1.2 per cent to close on Friday at 20,025.94, while the market capitalisation closed higher at N6.331trillion.

Liquidity resurgence

The resurfacing of liquidity in the three days of transaction in the stock market and the gradual return of investors to the purchasing of stocks is believed to have arisen from recent the market and this is expected to enhance capital appreciation in stocks value in coming weeks.

This new lease of breath by investors, despite massive profit takings which have characterised activities in the last two months, will do both local and institutional investors ( foreign investors) lot of good as the value of their investments in the market will rise again.

Liquidity squeeze in the market before now had been a major headache for both operators and regulators who felt they had done all that is needful to bring back fund into the market but with no meaningful result.  Market observers believe that with more new listing expected next year, owning to the near stability of the economy in 2011, the equities market will be better for it, even as the issue of sound corporate governance and respect for rules of law that should form the fulcrum on which the market should thrive is now being respected.

Equity transactions last week

Equity trading on Monday opened activities on the floor of the Nigerian Stock Exchange (NSE) on a positive note, as the twin market indicators, the market capitalisation and the All-Share Index rose by 0.03 per cent.

Specifically, the All-Share Index gained 5.97 basis points to close slightly above 19,791.00, while the market capitalisation of 199 first-tier equities appreciated by N1.9 billion as sentiments turned green. Further review of transactions in the day showed that three out of the five NSE sectoral indices closed positive as NSE 30 which basically measures the performance of blue chips retraced by 0.04 per cent to close at 881.95 basis points. NSE Banking closed at 257.57 points, while NSE Insurance moved up by 0.63 per cent to close at 147.57 and NSE Food and Beverages dropped by 0.16 per cent to close at 552.17.  NSE Oil and Gas recorded the highest loss with 0.19 per cent to close at 235.92.

Meanwhile, a turnover of 263 million shares worth N2.208 billion in 3,440 deals was recorded in the day’s trading. Financial services sector led the market transaction volume with 239 million units valued at N1.557 billion exchanged in 1,924 deals.

The banking sub-sector of the financial services sector was the most active during the day (measured by turnover volume), with 230 million shares worth N1.549 billion exchanged by investors in 1,837 deals. Volume in the banking sub-sector was largely driven by activities in the shares of Zenith Bank Plc, UBA Plc and FCMB Plc. Also, Insurance sub-sector of the financial services sector was boosted by activities in the shares of Goldlink Insurance Plc, Guaranty Trust Assurance Plc and Aiico Insurance Plc.

The number of gainers at the close of trading session on Monday was 16, while decliners closed higher at 20.

Investment in equities last Tuesday continued on the upward trend, as trading closed in the day with a modest gain of N26 billion to maintain the positive outlook recorded the previous day.

The All-Share Index rose by 80.97 basis points to close at 19,871.97 just as the market capitalisation of 199 first-tier equities appreciated by N26 billion. A further review of trading in the day showed that three out of the five NSE sectoral indices closed positive after the trading as NSE 30 which basically measures the performance of blue chips gained 0.39 per cent to close at 885.44 basis points. NSE Banking rose by 0.11 per cent to close at 257.85 points and NSE Food and Beverages moved up by 0.68 per cent to close at 555.93, while NSE Insurance dropped by 1.72 per cent to close at 145.03 and NSE Oil and Gas recorded loss of 0.81per cent to close at 234.02.

Meanwhile, a turnover of 224 million shares worth N2.533 billion in 3,300 deals was recorded during the day. Financial services sector led the market transaction volume with 184 million units valued at N1.263 billion exchanged in 1,896 deals.

The banking sub-sector of the financial services sector was the most active during the day (measured by turnover volume); with 175 million shares worth N1.256 billion exchanged by investors in 1,820 deals. Volume in the banking sub-sector was largely driven by activities in the shares of Zenith Bank Plc, UBA Plc and Access Plc. Also, Insurance sub-sector of the financial services sector was boosted by activities in the shares of Aiico Insurance Plc, Sovereign Trust Insurance Plc and Mutual Benefit Assurance Plc.

The number of gainers at the close of trading session on Tuesday was 20 while decliners also closed at 20. Equity transactions on the Nigerian Stock Exchange witnessed a downturn Thursday, following price losses incurred by most blue chip companies, thus resulting in market capitalisation  sliding by N7billion.

28 companies depreciated in price, led by Julius Berger with 4.99 per cent to close at N32.96 per share, followed by Oando and Diamond Bank with 4.98 per cent to close at N23.09 and N2.29 per share.

Dangote Sugar shed 4.95per cent to close at N4.03, while Eternaoil lost 4.91 per cent to close N3.10 per share.

Honeywell, United Bank for Africa and Nigerian Bags Manufacturing Company also dropped 4.85, 4.82 and 4.73 per cent to close at N2.55, N2.17 and N1.61per share.

On the other hand, Stanbic IBTC topped the day’s  price gainers with 4.90 per cent to close at N7.28per share. Fidson followed with 4.21 per cent to close at N0.99 per share.

Corporate performance indices of All-Share Index dropped by 22.66 points or 0.1per cent from 19,871.97 to 19,849.31 while market capitalisation slide by N7billion from N6,282 trillion to N6,275trillion.

On the activity chart, the banking subsector remained the most active stock in volume terms with 257million units worth N1.8million in 1,764deals, followed by the insurance subsector with 42million units valued at N22.7million.

On the whole, investors exchanged 366million shares worth N2.6billion in 3,457deals.

UPL Plc and Okomu Oil Plc on Thursday led other losers to further drag down the market performance indices on the floor of the NSE.

The two companies led 19 others with five per cent each to close at N3.42 and N21.28 per share respectively.

Dangote Flour Mills also followed with 4.99 per cent to close at N4.76 per share, while Ecobank lost N1.72 per share.

On the other hand, 15 stocks appreciated in price, as IBTC led the gainers’ chart with 4.95 per cent to close at N7.64 per share while Law Union Insurance and Livestocks followed 4.00 per cent each to also close at 52 kobo each per share. Nascon added N3.74 per share to close at N4.16 per share.