Equities exceed N13trn mark as investors continue hunt for value stocks

by Iheanyi Nwachukwu

November 30, 2017 | 1:15 am
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Nigeria’s stock market surpassed the N13.13 trillion mark for the first time in about 3-years on Wednesday as investors continue to chase value across select stocks.
The market breached the level after a two-day rally buoyed stocks by N160 billion.
“We note the resumption of positive trading sentiment on the Exchange, driven by bargain hunting across counters and indicated by the strongly positive market breadth,” said Olalekan Olabode-led team of research analysts at Lagos-based Vetiva Capital Management.
Vetiva Capital analysts expect another positive trading session as investors continue to hunt for value across select stocks.
BusinessDay check reveals stocks that have outperformed the NSEASI in their year-to-date price change. They include Access Bank (70.4percent); Air Service Plc (138percent); Beta Glass Plc (69.2percent); Caverton (52.2percent); Cement Company of Northern Nigeria Plc (88percent); C&I Leasing (182percent); Dangote Flour Mills (136.9percent); Dangote Sugar Plc (188.7percent), and Ecobank Transnational (65.2percent).
FBN Holdings Plc has also rallied by 109percent this year; Fidelity Bank Plc (136.9percent); Fidson Healthcare Plc (196.9percent); Flourmills Nigeria Plc (83.9percent); GTBank Plc (72.3percent); Honeywell Flour Mills Plc (57.7percent); and International Breweries Plc (212.6percent).
Also, May & Baker Nigeria Plc has impressed investors with Ytd gain of 187.2percent; Nascon Plc (80.6percent); Nestle (62.3percent); Okomu Oil Palm Plc (67.3percent); Presco Plc (64.6percent); P Z Cussons Plc (53.4percent); Stanbic IBTC Plc (178.7percent); Transcorp Plc (59.8percent); UBA Plc (120percent); and Zenith Bank Plc (68.1percent).
Kayode Tinuoye-led research analysts at United Capital Plc expect the market to stay upbeat “as economic fundamentals continue to improve on the backdrop of the sustained oil rally.”
The economy has exited recession, oil price is back above $60/barrel, and external reserves accumulation has been impressive. This is even as the Federal Government recently tapped the Eurobond market for the second time this year. Nigeria’s inflation rate is currently at 15.91percent.
Oil price has risen to $64.07 per dollar while the nation has witnessed accretion in external reserves in excess of $34.5billion, even as the third-quarter (Q3) GDP grew by 1.4percent. Naira has been stable against the dollar at circa N360.
Analysts note that the Nigerian market has benefited immensely from positive news on an improvement in macro data.
FBNQuest analysts note that the Nigerian stock market “was still in negative territory YtD in early May but has surged, driven largely by the offshore investor response to the FX window for investors and exporters (NAFEX). Domestic investors have played a secondary role.”
The aggregate value of transactions at the Nigerian Stock Exchange (NSE) increased from January to September 2017 by 78.60percent to N1.655trillion as against N927.08billion recorded in same nine months period in 2016.
Foreign investors outperformed domestic investors by 8.13percent, the NSE data on domestic and foreign portfolio participation in equity trading show.
In their medium-term outlook for the stock market, Afrinvest researchers remain positive, saying that improvement in macroeconomic fundamentals will have knock-on impacts on corporate earnings and valuation multiples.
They expect short-term performance of the Nigerian bourse to remain broadly positive as investors take position ahead of anticipated year-end rally in equities.
Nestle Nigeria Plc, Dangote Flour Mill Plc, Fidelity Bank Plc reached 52-week highs Wednesday even as investor increasingly demanded stocks of newly listed Global Spectrum Energy Services Plc.
Nestle Nigeria Plc reached hit N1,315 after gaining N25 or 1.94 percent from N1,290 the preceding trading day; Dangote Flour Mills Plc rose from to N10.07from N9.95, adding 32 kobo; Fidelity Bank Plc gained 18 kobo, from N1.81 to N1.99; while the newest oil and gas firm, Global Spectrum which listed at N5 per share traded at N5.65 at close of trading Wednesday.

Iheanyi Nwachukwu

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by Iheanyi Nwachukwu

November 30, 2017 | 1:15 am
  |     |     |   Start Conversation

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