Market Update for March 13
It was a trading day of struggles on the floor of the Nigerian Stock Exchange as the indicators turned green and red intermittently from the early hours to mid-day trading with sellers gaining more ground to push the market lower on the first day of the week. In the process also, highly capitalized stocks shed weight.
Zenith Bank’s share price was adjusted for a dividend of N1.77, just as the first Federal Government savings bond opened also on Monday with coupon rate of 13.01% further depressed the market and as if this was not enough bad news, crude oil price fell again.
Monday’s drop in market indicators left traders and analysts wondering what will happen after the earnings season if the market is struggling like this now with investor optimism already waning. This is just a prelude of things to come if sellers take control after earnings season with the 2017 budget still awaiting approval at the National Assembly.
Meanwhile, at the end of Monday’s trading, the composite NSE All-Share Index shed 101.38 points to close at 25,136.63 points, down from the opening 25,238.01 points, representing 0.4% decline on a low trading volume. This was as a result of investors trying to interpret the government savings bond of 13.01% coupon, considering that Monetary Policy Rate (MPR) is 14%; inflation rate, 18.55%; and Treasury Bills, 18.20%; being the concerns of the investing public as the bond opened.
Of concern to investors at this time are issues such as the political will to implement the ERGP, sliding oil price and another interest rate hike in the U.S that will affect the six global currencies, in addition to low liquidity and confidence already in the market.
Similarly, market capitalisation for the day was down by N35.09 billion to close lower at N8.70 trillion, from an opening value of N8.73 trillion, representing 0.40% lost for investors, as the market still having mixed sentiments for the earnings season.
The decline in the share price of Forte Oil, Mobil Oil, Oando, Dangote Cement and Stanbic IBTC that increased the All-Share index’s year-to-date negative position to 6.49%, just as that of the market capitalisation for the period adjusted to N501.75 billion, representing 5.89% loss over the same period.
Market breadth was flat for the day as the number of advancers and decliners were equal in a ratio of 12:12 to reverse the previous day’s bull market.
The day’s transaction volume and value were down by 44.85% and 70.53% respectively to 135.40 million of shares from 245.39million in the previous day, while value went down to N681.63 million from previous vale of N2.13 billion.
Transactions in financial services stocks like Diamond Bank, FBNH, Fidelity Bank, Access Bank and Zenith Bank dominated the activity chart as most traded equities by volume.
The NSE All-Share index and all sectoral indices were mixed to close the day’s trading.
During the trading session RT Brisco notified the investing public of a delay in releasing its 2016 numbers due to review of the account, Neimeth also notified the market of a fire accident at its Lagos raw materials warehouse.
United Capital led the advancers table, chalking 6.20%, to close at N2.57, followed by Union Bank of Nigeria with 4.97% to close at N4.90; while Forte Oil led the decliners table, shedding 4.99% to close at N49.90, next was Livestock Feeds with 4.48% to close at N0.64
Monday’s trading was the last day for investors seeking to qualify for Access Bank’s 40 kobo final dividend.
We advise you hold your position in value stocks that are likely to pay dividend and those that have recommended dividend, but whose prices are falling due to the prevailing mood of the market. Watch out for support levels to reposition.
