Caverton, Livestock Feeds, Mutual Benefits, others lead H1 underperformers
10 stockbroking firms trade 70% of equities
Caverton Offshore Support Group, Livestock Feeds Plc, Mutual Benefits Assurance Plc, and Guaranty Trust Holding Company Plc topped the list of underperforming stocks in the first-half of this year, falling by 40.7 percent, 39.5 percent, 24.2 percent and 21.2 percent respectively.
Other stocks that failed to impress investors in the period were Berger Paints Plc (-19.9 percent), Coronation Insurance Plc (-26.8 percent), Redstar Express Plc (-20.3 percent), FTN Cocoa Plc (-15.4 percent), Cutix Plc (-14.8 percent), Honeywell Flourmills Plc (-8.8 percent), NEM Insurance Plc (-15.6 percent), and Axa Mansard Insurance Plc (-13.8 percent).
Also on the list of the top laggards were University Press Plc (-12.2 percent), Custodian Investment Plc (-11.4 percent), Africa Prudential (-11 percent), Neimeth (-11.4 percent), and Nascon Plc (-11 percent), and Nestle Nigeria Plc (-10.1 percent).
The Nigerian stock market rose by 21.31 percent in H1, posting its best half-year performance in five years. This feat was driven majorly by increased buy activities in major counters, which include Meyer Plc (447.8 percent), Wema Bank Plc (343.1 percent), Guinness Nigeria Plc (132.1 percent), Seplat Energy Plc (100 percent), and Cadbury Nigeria Plc (96 percent).
Others were Presco Plc (87.9 percent), SCOA Plc (86.5 percent), Fidson Plc (80.1 percent), Airtel Africa Plc (81.4 percent), Academy Press Plc (154 percent), Nahco Plc (127.3 percent), and Learn Africa Plc (92.3 percent).
“We expect continued bargain hunting as investors look forward to the first-half 2022 earnings season and will seek to take high-yield positions. Still, we maintain that the broader equities market will remain on a bearish trajectory pending the release of H1-2022 results,” said research analysts at Lagos-based United Capital research in a recent note to investors.
Equity research analysts at Vetiva, an investment firm, said the market closed June as the worst-performing month in H1 2022 (-2.21 percent).
The All-Share Index and equities market capitalisation stood lower at 51,817.59 points and N27.935 trillion at the end of June 30.
Stock investors lost N981 billion in June as the month saw more bearish sessions because investors traded cautiously amid the 150-basis-points Monetary Policy Rate (MPR) hike by the Central Bank of Nigeria to 13 percent in May.
The analysts noted that investors stayed on the sidelines anticipating more attractive rates in the fixed income space.
Coronation Research analysts, in a July 4 market commentary, said: “The temptation to switch out of equities and into fixed income securities is less now than we imagined it would be at the time of the rise in the MPR.
“We have seen the equity market trade essentially flat for two weeks. We are slightly underweight the main index weights in the market and underweight many consumer-facing industrials and brewers. The danger to our outperformance is that they rally.”
According to them, the market does not seem in a hurry to move and is likely awaiting a steer from upcoming second-quarter results.
In the first half, only 10 stockbroking firms traded equities worth N1.169 trillion, which represents 70.16 percent of the total value of equities traded.
Cardinalstone Securities Limited topped the list as it accounted for deals worth N510.759 billion or 30.63 percent of the total value of stocks traded on the Nigerian Exchange Limited in the period.
Others were Apt Securities and Funds (N154.081 billion or 9.24 percent), Stanbic IBTC Stockbrokers Limited (N107.30 billion or 6.44 percent), Meristem Stockbrokers Limited (N88.311 billion or 5.30 percent), EFG Hermes Nig Limited (N74.277 billion or 4.45 percent), and Cordros Securities Limited (N70.002 billion or 4.20 percent).
Chapel Hill Denham Securities Limited traded equities worth N51.574 billion (3.09 percent), followed by CSL Stockbrokers Limited (N50.876 billion or 3.05 percent); Rencap Securities (Nigeria) Limited (N34.403 billion or 2.06 percent), and FBN Quest Securities Limited (N28.243 billion or 1.69 percent).
Tajudeen Olayinka, chief executive officer of Wyoming Capital & Partners, had in a recent market commentary noted that improved liquidity in the system in the last six months was responsible for the positive performance of the Nigerian stock market.
He also attributed it to the instant payment of dividends to shareholders through electronic means (e-dividend), which, according to him, provides opportunities for immediate reinvestment of these dividends, especially by institutional investors, who manage funds and portfolios for clients.
“This did not leave out other traditional investors, who took advantage of low prices, in the run-up to financial year-end rallies that we saw at the beginning of year 2022,” he had said.