Indices turn positive over improved Q3 results

Nigerian Stock Exchange

Improved third quarter (Q3) earnings recorded by some listed companies on the equity sector of the Nigerian Stock Exchange (NSE), buoyed transactions last week, as the market capitalisation and All-Share Index (ASI) gained 1.2 per cent.

However, volatility on the bourse continued at midweek despite the positive trend at the beginning of the earnings’ reporting season, with trading indicators oscillating and reversing previous gains, as the composite index closed lower on profit booking and selloffs in high cap stocks.

For instance, as at close of trading last week Wednesday, price losses suffered by virtually all the bluechip stocks caused investors’ wealth to plunge by N104 billion.

Also, NSE-ASI was down by 284.83 absolute points, representing a dip of 0.87 per cent to close at 32,437.35 points, while market capitalisation decreased by N104 billion to close at N11.842 trillion.

The plummeting numbers were impacted by losses recorded in medium and large capitalised stocks, amongst which were Seplat Petroleum Development Company, Dangote Cement, Chemical & Allied Products (CAP), UAC of Nigeria and Glaxosmithkline Consumer Nigeria.

But at the close of trading for the week ended October 19, 2018, the ASI and market capitalisation appreciated by 1.19% to close the week at 32,841.69 points and N11.99 trillion respectively.

Similarly, all other indices finished higher with the exception of the NSE-Main Board Index, NSE Consumer Goods Index, NSE Oil/Gas Index, NSE Industrial Goods Index and NSE Pension Index that closed lower by 0.57 per cent, 0.63 per cent, 0.87 per cent, 0.55 per cent and 0.59 per cent respectively.

The volume of shares traded also rose significantly, as a turnover of 1.380 billion shares worth N15.149 billion was recorded in 13,478 deals by investors on the floor of the Exchange, higher than a total of 915.856 million units valued at N9.835 billion that was exchanged in 14,033 deals during the previous week.

The Chief Research Officer of Investdata Consulting, Ambrose Omodion, said: “Expect the oscillating trend to continue as more companies present their numbers in the coming days, amid increased bargain hunting, while volatility and profit taking continue, if the numbers beat market and analysts’ projections.

“The much anticipated Q3 earnings’ reports would assist investors and fund managers rebalance their portfolios, while watching the political space and analysing the actual numbers that will give insights into expectations for Q3 Gross Domestic Product and full year company earnings.”

Further analysis of last weeks’ trading showed that the financial services industry led the activity chart with 1.237 billion shares valued at N9.725 billion, traded in 7,404 deals and contributed 89.62 per cent and 64.19 per cent to the total equity turnover volume and value respectively.

The consumer goods industry followed with 62.505 million shares worth N1.689 billion in 2,560 deals, while the third place was the oil and gas industry, with a turnover of 26.34 million shares worth N2.447 billion in 1,213 deals.

A total of 40,720 units of Federal Government Bonds valued at N42.580 million was traded this week in 26 deals, compared with a total of 8,619 units valued at N8.300 million transacted last week in 16 deals.

Also, 20 equities appreciated in price during the week, like the previous week and 42 equities depreciated in price, while 107 equities remained unchanged, higher than 100 equities recorded in the preceding week.

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