Economy

Recovery in the Equity Market in Sight?

Published

7 years ago

29/04/2019

By FSDH Research

Most investors in the Nigerian equity market did not smile during the first quarter of 2019 as the value of their investments dropped. And many are now asking if there is any hope of a recovery in the equity market.

Meanwhile, investors who took advantage of the high yields in the fixed income securities market in Q1 2019 are smiling to the bank. Election uncertainties, high yields on fixed income securities and risk aversion strategies adopted by investors made the equity market to record low patronage during the quarter.

Even after the election, the equity market has struggled to recover. This suggests that there were other factors that led to the drop in the market apart from issues surrounding the election.

The Nigerian Stock Exchange All Share Index (NSE ASI), the barometer which measures the performance of the equity market, dropped by 1.24% in Q1 2019. A few individual stocks, however, actually appreciated: this was unusual as large investors in the equity market rarely patronize most of the stocks which emerged among the list of top performers in Q1 2019.

The five top performing stocks in Q1 2019 by price appreciation were: Associated Bus Company Plc (+82.76%), McNichols Plc (+48.94%), Dangote Flour Mills Plc (+48.91%), Julius Berger Nigeria Plc (+36.82%) and Royal Exchange Plc (+31.82%).

The worst performing five stocks by price depreciation in the same period were: Academy Press Plc (-34.00%), eTranzact International Plc (-33.16%), Champion Breweries Plc (-27.14%), GlaxoSmithKline Consumer Nigeria Plc (-25.52%) and Unity Bank Plc (-25.23%).

The relatively stable exchange rate, decline in inflation rate and the appreciation in the price of crude oil on the international market could not lift the equity market from the negative territory in Q1 2019.

Our analysis of the financial performance of the largest ten companies by market capitalisation listed on the NSE shows that their combined revenue improved marginally by 4.31% in 2018 compared with 2017.

Their combined profit before tax (PBT) shows appreciable growth of 19.72% in 2018 compared with 2017. Our expectation is the outlook of the performance of quoted companies is better in the short-to-medium term than what was recorded in the last one to three years.

As the Federal Government of Nigeria (FGN) continues to pursue its inclusive growth agenda, supported by a favourable external environment in the short-to-medium term, the equity market should return to a path of sustainable growth.

While we believe that the growth projection in the Nigerian equity market is strong, we advise investors to adopt a long-term investment strategy in the market. They should also seek professional advice before they invest in companies. Despite the short-term volatility in the equity market, which can lead to a drop in the value of equity investment, investing in companies that have strong fundamentals will provide investors with a good return that is higher than the inflation rate over the long-term and protect against other short-term risks.

For investors who have neither the time nor the expertise to monitor their equity market investments and who still want to benefit from investment opportunities in the equity market, they can invest in any mutual fund in Nigeria that has exposure to the equity market.

Experienced fund managers manage these funds, and both the fund and the managers’ activities are regulated by the Securities and Exchange Commission (SEC) to protect investors’ interests.

If the current low yields in the Nigerian fixed income securities prevail, crude oil price remains above $70/barrel, exchange rate remains stable, inflation rate remains close to single digit, and government continues to develop structures that will improve the business environment, the equity market should record strong growth on a sustainable basis.

FSDH Research sees fairly strong growth opportunities in the following sectors: Consumer Goods, Industrial Goods, Banking, and Oil and Gas.

The following are our top stocks to watch: Dangote Cement, Dangote Sugar, FBN Holdings, Flour Mills, GTBank, 11 Plc, Nigerian Breweries, UBA, Zenith Bank, Access Bank and Seplat.

Economy

Four Securities Erase N51.17bn from NASD Exchange

Published

14 hours ago

27/06/2026

Adedapo Adesanya

By Adedapo Adesanya

Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.

In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.

The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.

During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.

Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.

GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.

Economy

Cautious Trading, Profit-taking Weaken Nigeria’s Stock Exchange by 0.66%

Published

14 hours ago

27/06/2026

Dipo Olowookere

By Dipo Olowookere

The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.

This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.

Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.

At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.

Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.

The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.

As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.

Economy

Official FX Market Sees Naira Dip to N1,380.93/$1

Published

14 hours ago

27/06/2026

Adedapo Adesanya

By Adedapo Adesanya

The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.

Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.

At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.

Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.

Also, a stronger greenback has generally put significant pressure on emerging-market currencies.

Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).

The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.

If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.

At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.

On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.