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

Customs Street Chalks up 1.08% on Renewed Buying Pressure

Published

2 hours ago

06/12/2025

Dipo Olowookere

By Dipo Olowookere

A 1.08 per cent growth was further printed by the Nigerian Exchange (NGX) Limited on Friday on improved appetite for Nigerian stocks.

Data showed that the insurance sector lost 0.61 per cent yesterday due to profit-taking as the energy space gave up 0.08 per cent, while the commodity counter closed flat.

However, the industrial goods landscape appreciated by 2.06 per cent, the banking index improved by 1.31 per cent, and the consumer goods sector expanded by 0.83 per cent.

At the close of business on Customs Street, the All-Share Index (ASI) increased by 1,563.92 points to 147,040.07 points from 145,476.15 points and the market capitalisation went up by N996 billion to N93.722 trillion from N92.726 trillion.

UAC Nigeria led the advancers’ log yesterday after it grew by 10.00 per cent to N96.80, Transcorp Hotels jumped by 9.71 per cent to N172.80, Royal Exchange appreciated by 8.89 per cent to N1.96, Ikeja Hotel soared by 8.74 per cent to N31.10, and Veritas Kapital leapt by 8.07 per cent to N1.74.

On the flip side, Union Dicon declined by 10.00 per cent to N6.30, ABC Transport slipped by 9.88 per cent to N3.10, AXA Mansard depreciated by 7.19 per cent to N12.90, FTN Cocoa lost 4.62 per cent to trade at N4.75, and Guinea Insurance dropped 3.36 per cent to finish at N1.15.

A total of 38 stocks ended on the gainers’ table and 17 stocks finished on the losers’ table, representing a positive market breadth index and strong investor sentiment.

Traders transacted 361.6 million equities for N14.8 billion in 21,051 deals yesterday versus the 1.9 billion equities worth N19.2 billion traded in 23,369 deals a day earlier, showing a decline in the trading volume, value, and number of deals by 80.97 per cent, 22.92 per cent, and 14.20 per cent, respectively.

The busiest stock for the session was Zenith Bank with 59.5 million units worth N3.6 billion, Access Holdings traded 46.1 million units valued at N973.0 million, Fidelity Bank exchanged 29.4 million units for N560.4 million, FCMB transacted 27.9 million units worth N293.9 million, and Tantalizers sold 13.0 million units valued at N29.8 million.

Economy

Nipco, 11 Plc Crash OTC Securities Exchange by 4.76%

Published

3 hours ago

06/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.

The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.

Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.

The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.

Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.

During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.

Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.

InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.

Economy

Naira Depreciates to N1,450/$1 at Official Forex Market

Published

3 hours ago

06/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira depreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, December 5, as FX demand pressure mounts.

The Nigerian currency lost N2.60 or 0.18 per cent against the greenback to close at N1,450.43/$1 compared with the previous day’s N1,447.83/$1.

Equally, the domestic currency declined against the Pound Sterling in the official forex market during the session by N4.48 to trade at N1,935.45/£1, in contrast to Thursday’s closing price of N1,930.97/£1 and shrank against the Euro by 43 Kobo to end at N1,689.17/€1 versus the preceding session’s rate of N1,688.74/€1.

Similarly, the local currency performed badly against the US Dollar at the GTBank FX counter by N2 to close at N1,455/$1 versus Thursday’s N1,453/$1 but traded flat at the parallel market at N14.65/$1.

As the country gets into the festive period, pressure mounted on the local currency reflecting higher foreign payments and lower FX inflows.

However, there are expectations that the Nigerian currency will be stable, supported by interventions by to the Central Bank of Nigeria (CBN) in the face of steady dollar Demand and inflows from Detty December festivities that will give the Naira a boost after it depreciated mildly last month.

Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450/$1 next week, buoyed by improved FX interventions by the apex bank.

As for the crypto market, it was down yesterday due to profit-taking associated with year-end trading. However, the December 1-Year Consumer Inflation Expectation by the University of Michigan fell to 4.1 per cent from 4.5 per cent previously and 4.5 per cent expected. The 5-Year Consumer Inflation Expectation fell to 3.2 per cent from 3.4 per cent previously and 3.4 per cent expected.

With the dearth of official economic data of late, these private surveys have taken on a new level of significance and the market banks of them to make decisions.

Cardano (ADA) depreciated by 5.7 per cent to $0.4142, Dogecoin (DOGE) slid by 5.1 per cent to $0.1394, Ethereum (ETH) dropped by 3.9 per cent to $3,039.75, Solana (SOL) declined by 3.8 per cent to $133.24, and Litecoin (LTC) fell by 3.7 per cent to $80.59.

Further, Bitcoin (BTC) went down by 2.6 per cent to sell at $89,683.72, Binance Coin (BNB) slumped by 2.2 per cent to $883.59, and Ripple (XRP) shrank by 2.1 per cent to $2.04, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.