18 October, 2020
By Taofik Salako, Deputy Group Business Editor
Nigeria’s two largest banks and largest pan-African banking group were the main drivers of activities at the stock market as investors sought to lock in positions into value stocks ahead of the third quarter earnings.
Nigeria’s largest financial institution, by market capitalisation, Guaranty Trust Bank (GTBank), the second largest bank, Zenith Bank and pan-Africa banking group, United Bank for Africa (UBA) were the three most active stocks at the stock market, accounting for more than 45 per cent of turnover during the week.
Trading report at the weekend showed that the three most active stocks accounted for 885.515 million shares worth N15.88 billion in 6,308 deals, representing 45.30 per cent and 69.11 per cent of the total equity turnover volume and value.
The banks belong to the exclusive list of Nigerian banks that traditionally pay dividends twice a year. GTBank, Zenith Bank and UBA had recently paid interim dividends based on their first half results. The six-month results had shown steady outlook, despite the adverse impact of the coronavirus on corporate earnings.
Total turnover at the Nigerian Stock Exchange (NSE) stood at 1.96 billion shares worth N22.98 billion in 22,844 deals last week as against 3.14 billion shares valued at N35.37 billion traded in 35,099 deals two weeks ago.
The bank-led financial services sector retained its traditional most active position on the activity chart with a turnover of 1.65 billion shares valued at N18.82 billion in 13,050 deals; representing 84.29 per cent and 81.92 per cent of the total equity turnover volume and value. The conglomerates sector occupied a distant second position on the activity chart with 99.313 million shares worth N87.823 million in 553 deals. The consumer goods sector placed third with a turnover of 60.57 million shares worth N991.19 million in 3,269 deals.
Benchmark price indices at the stock market closed positive for the fourth consecutive week, with average return of 0.86 per cent, equivalent to net capital gain of N128 billion for the week. This nudged the average year-to-date return to 6.77 per cent.
Aggregate market value of all quoted equities on the NSE rose from the week’s opening value of N14.852 trillion to close weekend at N14.980 trillion. The All Share Index (ASI)- the value-based common index that tracks all share prices at the NSE, closed weekend higher at 28,659.45 points as against its week’s opening index of 28,415.31 points.
Sectoral indices showed that the positive overall market situation was driven by widespread bargain-hunting, especially within the banking, oil and gas and consumer goods sectors. The NSE Banking Index closed the week with average return of 2.89 per cent. The NSE Oil and Gas Index trailed with 2.40 per cent. The NSE Consumer Goods Index posted average return of 1.87 per cent. The NSE Industrial Goods Index inched up by 0.24 per cent. The NSE 30 Index- which tracks the 30 largest companies, rose by 1.07 per cent. However, the NSE Insurance Index dipped by 0.68 per cent.
There were 35 gainers against 23 losers last week as against 53 gainers and 14 losers recorded in the previous week. Eterna recorded the highest gain, in percentage terms, of 34.99 per cent to close at N4.90. International Breweries followed with a gain of 12.92 per cent to close at N5.33 while Cadbury Nigeria rose by 12.59 per cent to close at N8.05 per share.
On the negative side, E-Tranzact led with a drop of 26.38 per cent to close at N1.73. Portland Paints and Products Nigeria followed with a drop of 10.31 per cent to close at N2 while Consolidated Hallmark Insurance declined by 8.11 per cent to close at 34 kobo per share.
Also traded during the week were a total of 701,543 units of Exchange Traded Products (ETPs) valued at N6.051 billion in 44 deals compared with a total of 1.051 million units valued at N4.847 billion traded in 33 deals two weeks ago.
In the debt segment, a total of 19,475 units valued at N23.752 million were traded in five deals compared with a total of 79,691 units valued at N108.241 million traded in 23 deals penultimate week.