All-Share Rises 0.33% as Market Pares Losses to End Four-Week Decline

It was a positive performance for the Nigerian equities market last week after four weeks of decline as increased buying interest in bellwethers lifted the market. The Nigerian Stock Exchange (NSE) All-Share Index rose 0.33 per cent to close at 30,773.64, while market capitalisation rose by same margin to be at N11.241 trillion.

Similarly, all other indices finished higher with the exception of the NSE CG and NSE Banking Indices that depreciated by 0.05 per cent and 2.20 per cent respectively while the NSE ASeM index closed flat.

The renewed interest in FBN Holdings Plc, Nestle Nigeria Plc and Dangote Cement Plc outweighed sell offs in Access Bank Plc, Union Bank of Nigeria Plc and Ecobank Transnational Incorporated. With last week, the year-to-date decline of the ASI moderated to 19.5 per cent.

An analysis of the market performance showed that four out of five sectors tracked closed in green.  The NSE Insurance Index recorded the highest gain of 3.5 per cent as a result of appreciation in the shares of NE Insurance Plc and WAPIC Insurance Plc.

The NSE Oil & Gas Index and NSE Industrial Goods Index went up by 2.3 per cent and 1.1 per cent respectively following buying interest in Forte Oil Plc, Double One Plc, Cement Company of Northern Nigeria Plc and Dangote Cement Plc.

Similarly, price appreciation in Nestle and Nigerian Breweries lifted the NSE Consumer Goods Index by 0.9 per cent higher.  However, on the flip side the NSE Banking Index fell by 2.2 per cent due to decline in the shares of Access Bank Plc and ETI.

Although Access Bank Plc remained in the news last week due to its move to acquire Diamond Bank Plc, its share price suffered a decline, while that of Diamond Bank Plc appreciated. Specifically, Access Bank Plc shed 5.2 per cent, while Diamond Bank Plc jumped by 57.89 per cent.

However, the swoop on the shares of Diamond Bank, which led to the jump in price, was expected given the terms of the merger with Access Bank.

The proposed merger would involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger.

Based on the agreement reached by the boards of the two financial institutions, Diamond Bank shareholders would receive a consideration of N3.13 per share, comprising of N1 per share in cash and the allotment of two new Access Bank ordinary shares for every seven Diamond Bank ordinary shares held as at the implementation date.

Immediately following completion of the merger, Diamond Bank would be absorbed into Access Bank and it will cease to exist under Nigerian law.

And some stock market operators said the business combination was a welcome development that seemed to be more favourable to Diamond Bank Plc.

Mr. David Adonri of Highcap Securities Limited, said: Diamond Bank Plc has been failing. Merger with Access Bank has finally rescued the bank from imminent collapse. The terms of merger weigh heavily in favour of Diamond Bank Plc.”

Market Turnover

Meanwhile, the value and volume of trading also went up last week with investors trading 1.472 billion shares worth N18.678 billion in 15,610 deals compared with 1.169 billion shares valued at N14.762 billion that exchanged hands the previous week in 14,554 deals.

The Financial Services Industry remained the most active leading the activity chart with 918.303 million shares valued at N11.015 billion traded in 9,154 deals. The sector thus   contributed   62.4 per cent and 58.9 per cent to the total equity turnover volume and value respectively. The Healthcare Industry followed with 280.722 million shares worth N78.511 million in 259 deals. The third place was Industrial Goods Industry with a turnover of 108.712 million shares worth N 2.949 billion in 1,496 deals.

A further breakdown of the performance showed that the top three equities namely Union Diagnostic & Clinical Services Plc, Zenith Bank Plc, and Access Bank Plc, (measured by volume) accounted for 619.444 million shares worth N6.053 billion in 2,818 deals, contributing 42.09 per cent and 32.41 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 880,145 units of Exchange Traded Products (ETPs) valued at N6.742 million executed in five deals compared with a total of 316 units valued at N849,000 that was transacted two weeks ago in five deals.

Also, a total of 14,068 units of Federal Government Bonds valued at N12.701million were traded last week in 23 deals compared with a total of 10,934 units valued at N10.746 million transacted the preceding week in 31 deals

Price Gainers and Losers

The price movement chart showed that 49 equities appreciated in price during the week, higher than 34 in the previous week, while 23 equities depreciated in price, lower than the 37 of the previous week. Diamond Bank Plc led with 57.89 per cent, trailed by Unity Bank Plc with 39.13 per cent. Neimeth International Pharmaceuticals Plc with 31.67 per cent.  The pharmaceutical firm last week announced a bonus issue of one for every 10 shares already held for the year ended September 31, 2018.

Neimeth recovered from loss in 2017 to a profit in 2018. Specifically, Neimeth posted a revenue of N2.269 billion for the year ended September 30, 2018, up from N1.534 billion in 2017.Cost of sale jumped from N604.670 million to N1.107 billion, while gross profit stood at N1.161 billion in 2018, as against N929 million in 2017.

Finance cost fell from N84 million to N76 million. The company ended the year with a profit before tax (PBT) of N202 million compared with a loss before tax of N404 million and profit after tax of N184 million in 2018, which is a recovery from a loss of N411 million in 2017. Based on the performance, the board of directors recommended a bonus instead of cash dividend.

Also, NEM Insurance Plc was among the price gainers last week, chalking up 20.87 per cent. Forte Oil Plc added 18.05 per cent. Double One Plc garnered 18.01 per cent. Other top price gainers included: UACN Property Development Company Plc (17.5 per cent); Cement Company of Northern Nigeria Plc (13.38 per cent); Honeywell Flour Mills Plc (12.61 per cent) and Vitafoam Nigeria Plc (10.47 per cent).

Conversely, Ikeja Hotel Plc shed 9.6 per cent, trailed by Japaul Oil & Maritime Services Plc with 9.1 per cent. Union Bank of Nigeria Plc went down by 8.2 per cent, just as Veritas Kapital Assurance Plc and Abbey Mortgage Bank Plc shed 8.0 per cent and 7.5 per cent in that order.

Other top price losers included: CAP Plc (6.4 per cent); John Holt Plc (6.2 per cent); AIICO Insurance Plc (5.8 per cent); Access Bank Plc (5.3 per cent).