Investors have started to take a position in the Nigerian equities following 2018 year bearish run which caused significant depreciation in the prices of listed stocks on the Nigerian bourse.
This sentiment has started to manifest as the first week of trading on the Nigerian Stock Exchange (NSE) in 2019 ended with 17 gainers, 42 losers while the share prices of 31 other equities remained unchanged. Julius Berger, Union Dicon and Custodian Investment topped the year to date gainers’ chart as their prices appreciated by 15.7 percent and 8 percent respectively. The share price of Union Bank rose by 7.1 percent year to date; Cutix, 6.7 percent; Livestock Feed, 6.1 percent; while the share prices of Jaiz Bank and Okomu Oil rose by 6 percent and 5 Percent.
Others on the gainers’ table at the end of the first week of trading in 2019 include Sterling Bank which gained 3.7 percent; International Breweries, 3.3 percent; Forte Oil, 3.1 percent; United Bank for Africa (UBA), 2.6 percent; United Capital , 2.5 percent; Vitafoam, 2.3 percent; African Prudential, 1.8 percent; PZ, 1.7 percent and AIICO, 1.6 percent.
Diamond Bank, with depreciation to the tune of 17.4 percent was the worst performing stock in the first week of trading in 2019. It was closely followed by GlaxoSmithKline which depreciated by 15.9 percent and Access Bank, FCMB and Champion Breweries shed 14.7 percent, 14.3 percent and 13.6 percent respectively from their prices to lead the decliners’ table as at January 4, 2019.
The All Share Index(ASI) of the Nigerian Stock Exchange ended the week at 30,638.90 basis points representing -2.52 percent decline year to date. The ASI performance in the first week of January 2019 compares to -2.32 percent fall in equity prices in the first week of January 2017 and 1.78 percent price appreciation in the first week of trading in 2018.
Similarly, the market capitalisation of quoted stocks closed at N11.43 trillion on January 4, 2019 as against N11.72 trillion on the last trading day of 2018. That amounted to -2.52 percent fall in market capitalisation or a loss of N295.20 billion in the value of listed stocks in the first week of trading.
Following the announcement of a merger between Access Bank and Diamond Bank, the share prices of the two financial institutions rallied in the weeks after the announcement, a deal which is expected to be finalised before the year end. The declines the two stocks suffered in the first week of trading in the New Year signalled that investors are ready for profit taking.
Chinonye Nnewuihe a senior analyst with Meristem Securities attributed the trend in the first week of trading to rebalance of portfolios among portfolios managers and considering that the market is having a low base, there is a very high tendency the Nigerian Stock Market will close in the positive territory by year end.
“At the beginning of the year, portfolio managers usually rebalance their portfolios for better opportunities. With the capital market having a low base now, there is a likelihood that the Nigerian capital market will close at the positive territory”, Nnewuihe said.
At the end of the first week of trading, 1.65 billion units of shares were traded valued at N8.41 billion executed in 14,773 deals compared with 3.13 billion units of shares worth N14.34 billion executed in the last week of 2018.
Expectedly, the financial services sub sector, led the activity chart as investors exchanged 1.15 billion shares estimated at N5.74 billion traded in 9,174 deals. By this the financial sub sectoral trades accounted for 70.08 percent of the market volume and 68.25 percent of the market value. The healthcare industry recorded 271.3 million shares worth N82.6 million traded in 219 deals.
A total of 395 units of exchange traded products (ETPs) valued at N816,344.70 executed in 13 deals in the first week of trading in the new year as against 25,500 units worth N1.78 million in 15 deals in the last week of trading in 2018.
Federal government bonds totalling 7,209 units worth N6.96 million were traded in 8 deals as against 686 units valued N689, 162.04 in 3 deals in the previous week.
Meanwhile, Vitafoam has proposed N0.25 dividend per share for the financial year ended September 30, 2018. The management will seek shareholders approval at the annual general meeting, shareholders will be paid on March 8, 2019 for members whose names appear in the register of members as at the close of business on Friday 15, February 2019. The firm will also pay a bonus issue in the ratio of 1 new share for every 5 existing ordinary shares.
“The board has approved a bonus issue of 1 new share for every 5 existing ordinary shares to shareholders whose names appear on the register of members at the close of business on Friday 15, February 2019. The new shares shall rank equally in all respect with the existing ordinary shares except they shall not rank for the dividend recommended for the year ended 30th September , 2018”, a statement from the company said.