Nigerian stocks closed the week lower, extending the losses recorded in the previous week. This was against a backdrop of extreme volatility in FX on the parallel market, heightened concerns about the extent of Non-performing loans in the banking system as well as investor apathy, given the low participation levels. The All-Share Index came off by 0.83% week-on-week to close at 24,228.79pts. It is worthy to note that the market had dipped to the 23,000pts range at mid-week, indicating significant levels of volatility.

Dragging the market lower were the Financials, with the Banks and Insurers down 2.45% and 1.25% respectively. The Banks which have been under pressure came under more pressure following the release of a profit warning by FBNH (the bank holding company that owns Nigeria’s largest lender by total assets). It guided that FY’2015 earnings would be materially below that of the prior year due to higher impairment charges. This sent shivers down the spine of investors, questioning if there was a possibility of similar announcements by other lenders. Ironically, FBNH closed the week marginally higher on the back of a retracement in Friday’s session after dipping 8.70% through to Thursday. The Oils continued to be supportive on further gains in SEPLAT while the Consumers and Industrials were only smallish up.

The headline figure for market activity would show a week-on-week improvement in market turnover (N11.742bn compared to N9.641bn in the previous week). However, when we strip out the block divestment in Tigerbranded Consumer Goods (formerly Dangote Flour), we get a better sense of market volumes. Dangote Industries Limited bought back the stake in the business it sold to TIGERBRANDS at over c.N9.50 per share just a few years ago. The buyback was done at N1.24 per share, in a deal worth over N4bn.

Activity levels were broadly lower and this is largely on the back of FPIs staying out of the market and only trading when they are forced to. Given that it was the last full trading week for the month, the action came in mostly from index fund managers who were rebalancing their portfolios.

Globally, the US and major European markets were higher backed by strong economic data from the US showing the economy grew faster than expected in the fourth quarter as well as gains in Oil and other commodities. In Asia, they were mostly flat, eking out only smallish gains. Shares in mainland China however ended the week lower, following its steepest plunge in over a month on Thursday.

NSE All Share Index Wtd Feb 26, 2016
Source: FT.com

Market Snapshot

• All-Share Index: 24,228.79pts
• Market Cap (NGN): 336bn
• Market Cap (USD): 313mn
• Total Volumes Traded: 476bn
• Total Value Traded (NGN): 742bn
• Daily Average Value Traded – WtD (NGN): 348bn
• Daily Average Value Traded – YtD (NGN): 225bn
• Advance/Decline Ratio: 0

Sector Performance:

Market Screeners:

SEPLAT (+12.40%; N340.00); UNITYBNK (+11.67%; N0.67) & LEARNAFRCA (+11.11%; N0.90)

LIVESTOCK (-12.98%; N1.14); DIAMONDBNK (-12.26%; N1.36) & SKYEBANK (-10.19%; N0.97)

TIGERBRANDS (3,302.869mn); FCMB (274.377mn) & FBNH (159.012mn)

TIGERBRANDS (N4.097bn); WAPCO (N1.231bn) & ZENITHBANK (N1.131bn)

Nil

OANDO (N3.19); MANSARD (N1.95); NCR (N10.47); MRS (N47.18); FBNH (N3.14); UNILEVER (N26.60); FCMB (N0.75); CHAMPION (N2.58); FIDELITY (N1.14) & DIAMONDBNK (N1.33)

The post above and its ensuing comments, if any, is purely the opinion of the writer(s). It therefore should never be considered as an investment advise of any sort. If required, readers should please consult a competent professional financial adviser for any investment decision.