NSE Indices Close Lower On Profit Booking In Petroleum Stocks, Blue-Chips

Market Update for April 11

(By Ambrose Omordion) The Nigerian stock market indices suffered another steep loss again to close lower as highly capitalized stocks shed value to continue the three-day bearish transition on the exchange. Profit booking is evident in the market as traders’ cash out gains from the recent rally in petroleum stocks and others.
The high volume traded on Tuesday revealed interest of investors in high dividend yield stocks that released their earnings recently, as players position to benefit from the juicy dividend despite market fluctuations and economic situation.
As the market expects March inflation data and Q1 numbers, the recently released consumer confidence index for first quarter was up to 62.7 points from 58.1 points recorded in the previous fourth quarter of 2016, as the index trend up on monthly basis since the begin of the year, moving from 59.21 point in January to 60.2 point in February and to 68.68 point in March averaging to 62.7 point for the quarter.
This is a sign of rekindling confidence and improvement in the system which can be attributed to the Central Bank of Nigeria (CBN) intervention in the foreign exchange market.
INVESTDATA recommends that an all-inclusive plan is needed to sustain the intervention, while long term plans and policies are implemented to revamp the economy and support the recovery so far.
Stock markets across the world were mixed as the price of oil is still supported by the crisis in Libya.
On Tuesday, the U.K. released its consumer price inflation and producer price data at 2.3% in March.
G-7 Foreign ministers are poised to reconvene in Italy for the second and final day of the summit hosted in Italy. Foreign ministers from their respective major industrialized nations are expected to look for ways to intensify political pressure on Russia to break ties with Syrian President Bashar Assad.
Elsewhere, the International Monetary Fund (IMF) Managing Director Christine Lagarde is expected to speak on “Innovation, Technology and Growth” in Berlin.
Meanwhile, the composite NSE All Share Index shed 148.31 basis points to close at 25,478.06 after opening at 25,626.37, representing a 0.58% decline on a high volume traded, when compared to the previous day’s figures.
In the same direction, market capitalisation for the day was down N51.32bn to close at N8.82tr, from an opening value of N8.87tr, also representing 0.58% depreciation in value.
Losses recorded by Mobil Oil Nigeria, Oando, Forte Oil, Dangote Cement, Zenith Bank, GTBank and Flourmills impacted the All-Share index’s year-to-date negative position to 5.19%, while market capitalisation adjusted to a N428.12bn slide, representing 4.78% loss YTD, from the year’s opening value.
Market breadth for the day remained negative as the number of decliners outpaced advancers in the ratio of 26:12 to continue the down market. Market activity in volume and value were up by 109.91% and 229.16% respectively to 402.68m million shares from previous day’s 191.84m shares and to N1.92bn from the previous N584.72m.
The volume of transaction was driven by shares of Fidelity Bank, FCMB Holdings, FBN Holdings UBA and Transcorp as most traded equities.
The NSE All-Share index and all sectoral indices were in red to close the day’s trading.
At the end of the day’s trading, Fidelity Bank led the advancers log with 8.70% to close at N1.00, driven by its high Dividend Yield, followed by International Breweries with 4.92% to close at N17.50; while Mobil topped the decliners’ table, shedding 9.44% of its opening value to close at N326, ahead of Oando with 5.34% to close at N5.32. Petroleum stocks suffered declines, even while oil prices at the international market is looking up.
It is has been noted that transparency in the sector remains very low, especially the indigenously managed players which Mobil has now become by virtue of the acquisition of its 60% stake by NIPCO.
As market open this morning, we advise that investors allow numbers to guide their decisions to reposition for Q2 trading as the first quarter earnings reporting season is just kicking off. Industry potential is very important when picking a particular company, because there are things that are sector-wide and would naturally impact positively or negatively on companies operating within such an industry.

Email: ambroseconsultants@yahoo.com