Unity Bank, Caverton lead as stocks gain N1.4trn in first quarter 2018

The market capitalisation of equities listed on the Nigerian Stock Exchange (NSE) ended the first quarter of 2018 at N14.99 trillion, representing 10.17 percent increase over N13.61 trillion which was its value on the last trading day of 2017, which implies that the listed stock gained N1.38 trillion in the first quarter of this year.

However, this is far lower than the N2.29 trillion increase in market capitalisation at the end of January 2018 and N1.94 trillion gain at the end of February 2018. As stock market indices are leading indicators, market capitalisation inclusive, the reduction in market capitalisation of listed equities toward the end of the first quarter of 2018 aligns with the general view that current economic growth is weak.

On why the market momentum slowed in March compared with January 2018, this was attributed to low foreign inflows and inability of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to meet in the first quarter of 2018.

“Foreign inflows into the market in December 2017 through January 2018 were considerable, and that was why the market posted stellar performance in January 2018. By February, the momentum had slowed down”, Saheed Bashir, a senior analyst at Meristem Securities, said.

“There was no major news that could boost the market in February and March as most of the news was about killings, kidnappings and no MPC meeting. So, everyone wanted that boost which did not come from the government”, he added.

Similarly, the All Share Index (NSE) of the NSE added 3,261.32 points to close at the end of the first quarter at 41,504.51 points, representing 8.53 percent appreciation over 38,243.19 points which was its closing figure on the last trading day of 2017.

Unity Bank of Nigeria leads the 50 stocks that outperformed the market as its share price appreciated by 130.2 percent to end the first quarter at N1.22 per share. It was closely followed by Caverton Offshore which appreciated by 107 percent to close last Thursday at N2.67 per share.

Also, Cement Company of Northern Nigeria (CCNN), Wema Bank and NPF Microfinance Bank appreciated by 96.8 percent, 90.4 percent and 69.6 percent for their share prices to close at N18.70; N0.99 and N2.12 per share respectively. Thus, the aforementioned stocks emerged as the five equities that outperformed the market at the end of the first quarter 2018.

NEM Insurance, 65.7 percent; Eterna, 63.8 percent; Sterling Bank, 62 percent; FCMB, 60.8 percent and GSK, 57.3 percent complete the list of the top ten most performing stocks at the end of the first quarter.

Five sectoral indices also outperformed the All Share Index and they are the NSE Premium Index, NSE Pension Index, NSE Industrial Index, NSE Banking Index and the Corporate Governance Index.

The NSE Premium Index was up by 15.1 percent at the end of the first quarter of 2018. It added 386.10 points to close at 2,950.23 points on March 29,2018 as against 2,564.13 points on December 29,2017.

The NSE Industrial Index closed higher by 10.96 percent, rising from 1,975.59 points on the last trading day of last year to 2,192.12 points at the end of the first quarter of 2018. Also, the NSE Banking Index increased by 9.49 percent, moving from 475.44 points in December 29, 2017 to 520.57 points at the end of the first quarter of this year. And the NSE Corporate Governance Index was higher by 9.34 percent as it closed on March 29, 2018 at 1,659.25 points.

Apart from the above, other sectoral indices underperformed the Nigerian equity market. The NSE Insurance Index ended the first quarter at 8.4 percent which is slightly below the ASI performance. The NSE 30 Index closed at 7.3 percent just as the NSE Lotus Islamic Index ended the quarter at 5.4 percent.

In addition, the NSE Oil and Gas closed at 4.9 percent while the NSE Main Board Index and NSE Consumer Goods Index closed on the last trading day of March 2018 at 4.7 percent and 0.2 percent respectively.

At the end of the reference period, only the NSE ASeM Index ended the first quarter in the negative territory. It shed 98.79 points to close on March 29 2018 at 988.53 points down from 1,087.32 points on December 29, 2017.

Meanwhile, BusinessDay 2018 Dividends Monitor shows that 33 companies have so far declared different amounts as dividends per share while MRS Oil was the only firm to declare a bonus issue of 1 for every 5 shares held by shareholders as at June 29,2018. The total dividend declared as at the end of first quarter amounted to N463.88 billion.

The breakdown shows that the banking sub sector, led by Zenith Bank and GTB, accounted for N190.63 billion dividends or 41.1 percent of the total dividends so far declared while the manufacturing sector led by Dangote Cement accounted for N183.14 billion representing 39.48 percent of the first quarter 2018 dividends. The two sub sectors accounted for 80.57 percent of the total dividends declared year-to-date.

Nigerian Breweries, which declared N24.82 billion dividends accounted for 5.35 percent, while the food and beverages sub sector accounted for N37.1 billion dividends or 8 percent of the total dividends declared in first quarter of 2018.

The healthcare sector with N8.78 billion dividends accounted for 1.94 percent of the dividends so far declared just as the oil and gas sub sector with N8.16 billion dividends accounted for 1.76 percent of the first quarter total dividends declared on the Nigerian Stock Exchange.

However, when compared with the performance of the equity market in the first quarter of 2017, returns at the end of the first quarter of 2018 are far better. At the end of the first quarter of 2017, the market capitalisation of listed equities had lost N417.97 billion to close lower at N8.83 trillion as against N9.25 trillion on December 30, 2016.

The ASI also shed 1,358.28 points to close at 25,516.34 points on March 31, 2017 compared with 26,874.64 points on December 30, 2016, translating to -5.05 percent. The NSE Premium Index closed at -3.62 percent; NSE Main Board, -4.95 percent; NSE ASeM Index, 0.44 percent; NSE 30 Index -4.93 percent; NSE Banking Index, -0.03 percent and the NSE Insurance Index, -1.96 percent.

Others are the NSE Consumer Goods Index, -11.91 percent; NSE Oil/Gas Index, -6.48 percent; NSE Lotus Islamic Index, -7.29 percent; NSE Industrial Index, 0.07 percent and the NSE Pension Index -1.47 percent.