The All Share Index (ASI) of the Nigerian Stock Exchange (NSE) closed at 21,300.47 points on the last trading day of the first quarter of 2020. In terms of performance, it amounted to a return of -20.65 percent. The mood at the end of the first quarter of this year was in contradistinction to the mood of the market in the first few days of trading in the New Year.
Starting on January 2, 2020 at 26,968.79 points, renewed interest in listed stocks on the NSE ensured that the first two weeks of the New Year were a time of a rebound of interest in the nation’s capital market. On January 8, 2020, ASI gained 3.48 percent when it closed at 28,562.48 points.
ASI maintained an upward movement albeit in an arithmetic sequence until it attained the highest point in the quarter on January 20, 2020 when it closed at 29,710.56 points-the highest points during the quarter. Since then, ASI has consistently sustained its downward movement, no thanks to coronavirus that made mess of Nigeria’s highest source of income-crude oil.
NSE changes into bonds market
Equities listed on the NSE during the period shed a whooping N1.95 trillion in the first quarter of the year. At N12.97 trillion on January 2, 2020, the total market capitalisation of equities, bonds and exchange traded funds (ETF) was skewed in favour of equities which controlled over 50 percent of the market value of stocks. Not anymore. The continuous beating equities have received year to date, has made the bond market to surpass the equities market capitalisation. As at the close of business on Friday, April 3, 2020, the bond market capital was N13.42 trillion; equities market capitalisation was N10.99 trillion meaning that the bonds listed on the NSE accounted for 55 percent of the entire market capitalisation while equities accounted for 45 percent.
Sectoral performance
Six sectoral indexes outperformed the market whereas nine sectoral indexes underperformed the market. The best performing index in the market is the NSE Industrial Index which returned -3.28 percent. NSE Insurance ended the quarter at -5.10 percent; NSE Premium Index, -16.77 percent; NSE Lotus Islamic Index, -17.56 percent; NSE Oil and Gas, -18.01 percent and NSE AFR Div Yield Index, -18.86 percent.
On the flip side, we have the NSE Consumer Goods as the worst performing index during the quarter. It closed at -45.10 percent. It was followed by NSE AFR Bank Value Index which ended the quarter at -38.18 percent; NSE Corporate Governance Index, -37.29 percent; NSE Banking Index, -33.90 percent; NSE Meri Growth Index, -29.66 percent; NSE Meri Value Index , -23.67 percent; NSE Main Board Index, -23.41 percent; NSE 30 Index, -23.39 percent; and the NSE Pension Index, -21.57 percent.
Source: NSE, BRIU
Market volume and value at 49.59 billion units and N627.47bn
Based on the market volume and value metrics, the top ten stockbroking firms traded 23.60 billion units of shares which implies that the total volume of shares traded in the first three months of this year amounted to 49.59 billion shares. In terms of value, the top ten brokers executed N391.85 billion shares which represented 62.45 percent of the total market value, implying that the total market value was N627.47 billion in the first quarter.
On the value chart for the top ten brokers are Stanbic IBTC Brokers, which traded N93.25 billion worth of shares, representing 14.86 percent of the market value; EFG Hermes Nigeria Limited that traded N78.28 billion worth of transactions translating to 12.48 percent; Rencap Securities, N58.34 billion or 9.30 percent of the market value; CSL Stockbrokers, N36.41 billion or 5.30 percent of the market value; Cardinal Stone Securities, N26.54 billion representing 4.23 percent of the market; Tellmer Capital, N24.36 billion or 3.88 percent; ChapelHill Denham, N24.02 billion or 3.83 percent; ARM Securities, N17.72 billion or 2.82 percent; Cordros Securities, N16.75 billion or 2.67 percent and Meristem Stockbrokers, N16.16 billion or 2.58 percent.
Dividend recommendations
Twenty one firms and three funds recommended dividends during the quarter. The firms are Vitafoam Nigeria Plc, Nigerian Breweries Plc, Infinity Trust Mortgage Bank Plc, Africa Prudential Plc, United Capital Plc, Zenith Bank Plc, Transcorp Hotels Plc, United Bank for Africa Plc, Transnational Corporation of Nigeria Plc, Guaranty Trust Bank Plc, Stanbic IBTC Holdings Plc and Custodian Investment Plc.
Others are Access Bank Plc, MTN Nigeria Communications Plc, Fidelity Bank Plc, Sterling Bank Plc, Seplat Petroleum Development Company Plc, Nestle Nigeria Plc, Dangote Cement Plc, Julius Berger Nigeria Plc, and BOC Gases Plc.
The funds are Lotus Halal Fixed Income Fund, Nigeria Energy Sector Fund (NESF) and The Frontier Fund.
Delisting of firms
Three firms delisted from the main board of the Nigerian Stock Exchange in the last quarter. They are A.G. Leventis (Nigeria) Plc which delisted on 7-Jan-2020 voluntarily;
Cement Company Of Northern Nigeria Plc which delisted on 9-Jan-2020 as a result of its merged with BUA Cement Plc(formerly OBU Cement Company Plc), and Continental Reinsurance Plc which delisted voluntarily on 17-Jan-2020. The three firms that delisted in January brought the total number of delisted firms since 2002 to 113.
Board appointments
Between January and March 2020, about 30 firms effected changes in their boards, leading to the appointment of 36 individuals. The firms are Transcorp, Dangote Sugar, Nestle, PZ, UBA, NCR and Champions Breweries. Others are MRS, Eterna, Fidelity Bank, Unilever, Meyer, Ikeja Hotels, Abbey Mortgage Bank, FCMB and Unity Bank.
Some Institutions were also appointed. The institutions are Greenwich Registrars and Alsec Nominees Limited, appointed by NCR and SPN Packaging Studio Press as their companies’ registrars’ respectively. FCMB appointed Deloitte and Touché as its external auditors.
Most of the female board members have first and second degrees in law, MBA while industry experience averaged 20 years.
Notable male managing directors and chief executive officers are Georgious Polymenakos, who is now the managing director and chief executive officer of Champion Breweries; Christopher Ezeafulukwe, managing director and chief executive officer of Transcorp Power; Oliver Alawuba, CEO of UBA Africa; Carl Raymond R. Cruz, managing director and chief executive officer of Unilever while Austin Oyegha, was appointed as the acting managing director of Global Spectrum Energy Plc.
Outlook for the second quarter
The performance of the nation’s capital market will be shaped by how countries could quickly address the coronavirus pandemic. A rise in the fortune of crude oil will bolster investor’s confidence in the nation’s capital market. Also, we foresee a pick in the activities of private equity firms due to the fact that equity valuations of most stocks are far below their real worth. In addition, the current valuations offer opportunities to those who want to position for long term. There will be regular profit taking in the market.
