It hasn’t been a fabulous year for 12 large cap stocks on the NSE30 in 2018. The NSE30 is an index that tracks changes in prices of the largest stocks in the equity market. NSE 30 companies account for more than 95 percent of the total stock market capitalization of the Nigerian Stock Exchange (NSE).
After a blistering start to the year that saw the NSE30 index move from around 1,800 points to over 2,000 points within the first 3 weeks of the year, the NSE30 has since reversed all its gains in January and is now down -2.11 percent, after dropping to 1,709 points at market close on Thursday.
Large cap equities such as Nigerian Breweries, Total and Nestle are currently down -14.78 percent, -3.17 percent and -1.91 percent respectively. As a result of the significant price losses in Nigerian Breweries this year, the market valuation of the company has now dropped below N1 trillion to about N910 billion.
Market bears have been extra powerful this year and their might has been felt most by Forte oil. The company is the least performing stock on the NSE30 index and is currently down -39.4 percent. Forte oil has now dropped to N28.50 on Thursday, its lowest point since late 2013. The rout is still not over for Forte oil shareholders who have seen their wealth sharply eroded after the stock began its current downward trend from its record high of N342 per share in February 2016.
Alongside Forte oil as NSE30 biggest market laggards this year are Union Bank of Nigeria (-26.92%), International Breweries (-22.29%), Dangote Flour (-16.47%) and Lafarge Africa (-10.19%). The market rout appears to be far reaching across different companies in multiple industries as almost every sector is represented among the big losers.
Dangote Sugar and Fidelity bank which were the top market performers in 2017 are both down this year by -2.79 percent and -7.34 percent respectively. Diamond bank which reported significant losses in 2017 and Transcorp which suffered around 30 percent drop in profit between 2016 and 2017 were punished by investors as the stocks are currently down -6.67 percent and -7.79 percent year to date respectively.
While the bears have been very busy this year, the bulls haven’t been idle either. Equity prices of 19 publicly listed companies on the NSE30 index have all trended northwards this year. All of these companies have outperformed their market benchmark.
The best performing stock on the NSE30 this year has been Okomu oil (+40.86), Skye bank (+38%) and NASCON (+31%). Yes, Skye bank is the second best performing stock this year but don’t be fooled, the stock is currently trading at 72 kobo as at market close on Thursday and still has an ocean to cross to get to its 2014 level of N4 before the rout began.
On a positive note though the Central Bank of Nigeria (CBN) recently announced that it will extend the tenure of the board it put in place to manage Skye bank till 2020. The current board has managed the Skye bank on behalf of the CBN after the apex bank took over control of the troubled bank in 2016.
This news has increased market confidence in the bank and fed into the stock price, lifting share prices higher.
Other top performing stocks with double digit growth in the first half of the year include Unilever (+26.83%), Stanbic IBTC (+26.74%), FBN Holdings (+21.74%) and Ecobank Transnational (+17.65%) as at Thursday, 5th July 2018.
On July 28th, NSE reviewed the NSE30 index composition, removing Conoil and including Fidelity bank. More reshuffling may be on the way if the some lightweights on the NSE30 continue their downward spiral.
