Investors in the Nigerian equities market had another bullish week as most of their investments added value on sustained confidence.
The market, which had defied the sell pressure to close 0.47 per cent higher the previous week, did not only sustain the positive momentum last week but also improved on it by growing higher in value.
Specifically, the Nigerian Stock Exchange (NSE) All-Share Index(ASI), which measures the aggregate growth of the equities market, rose 1.88 per cent to close at 39.562.75. Similarly, the market capitalisation grew by 1.88 per cent to close at N12.661 trillion.
A daily analysis of the market performance showed that three days were positive, while two days were negative. The market had resumed on Monday with 2.22 per cent growth with investors committing N2.858 billion in 265 million shares. Tuesday witnessed a bearish trend as almost half of the previous day’s gains were wiped off. On that day the ASI fell by 1.42 per cent while investors traded 622.471 million shares valued at N4.216 billion.
By mid-week, the bulls had regained control of the market, lifting its value by 0.65 per cent, just as investors traded 424 million shares worth N3.732 billion. The northward trend was sustained on Thursday with the ASI nudging higher by 0.96 per cent while 714 million shares valued at N3.05billion were exchanged by investors. On Friday, the market closed negatively as the ASI declined by 0.50 per cent just as investors traded 698.8 million shares worth N4.9 billion.
However, the decline recorded on the last day of the week notwithstanding, the ASI posted week-on-week growth of 1.88 per cent. Also six of the NSE indices appreciated last week.
The NSE 30, NSE Consumer Goods, NSE Banking, NSE Oil/Gas, NSE Lotus II and NSE Industrial Goods indices rose by 1.43 per cent, 0.42 per cent, 1.35 per cent, 0.51 per cent, 1.99 per cent and 2.97 per cent respectively. Only the NSE Insurance index fell by 0.98 per cent to close lower at 148.00 while the NSE ASeM index remained unchanged.
Meanwhile, investors traded 2.726 billion shares worth N18.777 billion in 22,228 deals last week, compared with 2.767 billion shares valued at N18.671 billion that exchanged hands last week in 24,007 deals.
The Financial Services Industry maintained the number one spot on the activity chart in value terms, recording 2.211 billion shares valued at N11.720 billion traded in 11,483 deals. As a result, the sector contributed 81.10 per cent and 62.42 per cent to the total equity turnover volume and value respectively.
The Conglomerates Industry closed as the second most active with a turnover of 303.055 million shares worth N1.387 billion in 1,792 deals; contributing 11.12 per cent and 7.39 per cent to the total equity turnover volume and value respectively. The third place was occupied by the Consumer Goods Industry with 84.149 million shares worth N3.399 billion in 4,300 deals.
Trading in the top three equities namely, FCMB Group Plc, Unity Bank Plc and Transnational Corporation of Nigeria Plc accounted for 1.538 billion shares worth N3.638 billion in 2,655 deals, contributing 56.44 per cent and 19.38 per cent to the total equity turnover volume and value in that order.
The ETFs recorded no transaction last week compared with a total of 60 units of NewGold Exchange Traded Funds (ETFs) valued at N114, 040.00 transacted in two deals..
But 12 units of FGN bonds valued at N14,341.54 exchanged ownership last week in one deal compared with a total of 2,200 units valued at N2.024 million transacted the previous week.
Gainers and Losers
In terms of price movement last week, 43 equities appreciated while 34 equities depreciated. About 121 equities stagnated. Union Dicon Salt Plc led the price gainers in percentage terms, rising 14.9 per cent. Costain(W.A) Plc trailed with a gain of 12.2 per cent. International Breweries Plc went up by 11.6 per cent, just as Fidson Healthcare Plc appreciated by 7.4 per cent.
African Prudential Registrars Plc chalked up 6.1 per cent while Nestle Nigeria Plc, Honeywell Flour Mills Plc and Dangote Cement Plc rose 5.8 per cent, 5.6 per cent and 5.5 per cent respectively. Continental Reinsurance Plc and NASCON Plc also closed positively, garnering 5.4 per cent and 5.1 per cent in that order.
Conversely, Union Bank of Nigeria Plc led the price losers with 12.6 per cent followed by Airline Services and Logistics Plc which went down by 12.4. Neimeth International Pharmaceuticals Plc shed 12.2 per cent, just as Cornerstone Insurance Plc and Unilever Nigeria Plc decline by 8.1 per cent and 5.8 per cent respectively.
Other top price losers included: Guinness Nigeria Plc (5.8 per cent); IHS Plc (5.6 per cent); Cadbury Nigeria Plc (5.3 per cent), Custodian and Allied Insurance Plc (5.2 per cent) and Paints and Coating Manufacturers Plc (5.1 per cent).
SEC’s Christmas Gift
One major development that happened in the market last week was the introduction of a new capital structure for operators by the Securities and Exchange Commission (SEC). Although there have been indications of a likely increase in the capital base of operators, they never expected it to be now. However, SEC introduced a new policy that has increased the share capital of broker/dealer from N70 million to N300 million. However for brokers only, the capital requirement has been increased from N40 million to N200 million each. Dealer is now required to have a capitalisation of N100 million as against N30 million.
To operate as an issue house in the market, N200 million is required up from N150 million, just the capital requirement for an Underwriter has been increased from N100 million to N200 million.
For a Registrar, the minimum capital requirement is now N150 million, from N50 million just as Trustees are required to have N300 million instead of the existing N40 million.
The minimum capital requirement for Rating Agency has been increased from N20 million to N150 million, while Corporate Investment Adviser will have N5 million as share capital which was unchanged.
Anyone operating as an individual investment adviser has to provide N2 million as capital, up from N500, 000. On the other hand, fund/portfolio manager is required to have a minimum capital of N150 million, up from N20 million.
The last recapitalisation exercise carried out by SEC was in 2004. An attempt to raise it to N1 billion in 2008 was suspended due to the negative impact it had on the market.