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

NASD Exchange Extends Bearish Run After 0.56% Drop

Published

2 days ago

03/04/2026

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south territory with a decline of 0.56 per cent on Wednesday, April 2.

This brought down the market capitalisation by N13 billion to N2.417 trillion from N2.430 trillion, and downed the NASD Unlisted Security Index (NSI) by 22.57 points to 4,062.87 points from the previous session’s 4,062.87 points.

It was observed that the NASD exchange ended with three price gainers and three price losers during the trading day.

MRS Oil Plc depreciated by N19.00 to close at N171.00 per unit compared with the previous price of N190.00 per unit, NASD Plc lost N4.14 to trade at N37.36 per share compared with Wednesday’s N41.50 per share, and Central Securities Clearing System (CSCS) Plc gave up N2.00 to sell at N78.00 per unit versus N80.00 per unit.

On the flip side, FrieslandCampina Wamco Nigeria Plc appreciated by 19 Kobo to N93.00 per share from N92.81 per share, Food Concepts Plc expanded by 15 Kobo to N2.87 per unit from N2.72 per unit, and Great Nigeria Insurance (GNI) Plc improved by 2 Kobo to 52 Kobo per share from 50 Kobo per share.

Yesterday, the volume of securities dipped by 91.8 per cent to 260.2 million units from 3.2 billion units, the value of securities went down by 98.1 per cent to N154.2 million from N8.3 billion, while the number of deals soared by 53.3 per cent to 46 deals from 30 deals.

GNI Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 56.9 million units valued at N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.

The most traded stock by volume on a year-to-date basis was also GNI Plc with 3.4 billion units sold for N8.2 billion, trailed by Resourcery Plc with 1.1 billion units exchanged for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.

Economy

Naira Slips to N1,380/$1 at Official Market, Remains N1,405/$1 at Black Market

Published

2 days ago

03/04/2026

Adedapo Adesanya

By Adedapo Adesanya

The Naira dropped N2.09 or 0.15 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 2, to trade at N1,380.79/$1 compared with Wednesday’s rate of N1,378.70/$1.

However, it appreciated against the Pound Sterling in the official market by N2.77 to quote at N1,824.86/£1 versus the N1,836.57/£1 it was traded at midweek, and improved its value against the Euro by N10.54 to N1,591.92/€1 from N1,602.46/€1.

Yesterday was the last trading session of the week for the local currency in the spot market, as the market will be closed on Friday and Monday for the Easter Holiday.

At the black market, the Nigerian Naira maintained stability against the greenback yesterday at N1,405/$1, but gained N8 at the GTBank FX counter to settle at N1,388/$1, in contrast to the previous session’s N1,396/$1.

Pressure eased on the domestic currency as strong policy indicators have helped calm the majority of worries within the financial systems. Particularly in the remittance segment, the apex bank has directed all International Money Transfer Operators (IMTOs) to route remittance transactions through designated Naira settlement accounts in banks, a move aimed at boosting transparency and channelling more foreign exchange into the formal market.

This helps take off pressure from the foreign reserves, which have fallen below the $50 billion mark as they are gradually decreasing rather than falling sharply.

Meanwhile, the cryptocurrency market was bullish on Thursday, as macro sentiment shifted against recent optimism after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.

The remarks came after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.

Cardano (ADA) chalked up 1.9 per cent to trade at $0.2435, Dogecoin (DOGE) grew by 1.2 per cent to $0.0912, Ethereum (ETH) appreciated by 0.8 per cent to $2,066.37, Bitcoin (BTC) added 0.5 per cent to sell at $67,080.53, Solana (SOL) increased by 0.5 per cent to $79.91, and Ripple (XRP) jumped 0.2 per cent to $1.31.

Conversely, Binance Coin (BNB) dipped 0.7 per cent to $586.90, and TRON (TRX) depreciated by 0.3 per cent to $0.3147, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.

Economy

Bulls, Bears Share Customs Street’s Spoils Amid Bullish Investor Sentiment

Published

2 days ago

03/04/2026

Dipo Olowookere

By Dipo Olowookere

The local stock market was relatively flat on Friday, as the bears and the bulls shared the spoils of war, though investor sentiment turned bullish compared with the preceding session’s bearish posture.

Data from the Nigerian Exchange (NGX) Limited showed that the All-Share Index (ASI) was marginally down by 4.66 points as it ended at 201,698.89 points versus Wednesday’s 201,703.55 points, and the market capitalisation slightly contracted by N3 billion to N129.806 trillion from N129.809 trillion.

Customs Street was shut on Friday because of the public holidays declared by the federal government today and next Monday.

Business Post reports that John Holt declined by 9.91 per cent to N15.45, Abbey Mortgage Bank shed 9.60 per cent to trade at N8.95, International Energy Insurance slipped by 6.48 per cent to N3.32, Chams shrank by 5.30 per cent to N3.75, and Tantalizers depreciated by 5.18 per cent to N4.03.

On the flip side, Unilever Nigeria improved by 10.00 per cent to N103.40, Fortis Global Insurance gained 9.82 per cent to trade at N1.23, Multiverse appreciated 9.81 per cent to N20.15, Legend Internet advanced by 9.38 per cent to N6.30, and Zichis grew by 9.02 per cent to N14.14.

The market breadth index was positive during the trading session, as there were 35 appreciating stocks and 24 depreciating stocks.

Yesterday, investors traded 560.0 million equities valued at N19.3 billion in 49,676 deals, in contrast to the 815.5 million equities worth N33.3 billion transacted in 52,641 deals in the preceding day, representing a drop in the trading volume, value, and number of deals by 31.33 per cent, 42.04 per cent, and 5.63 per cent, respectively.

Secure Electronic Technology dominated the activity log with 59.7 million shares valued at N61.1 million, Wema Bank exchanged 52.0 million equities worth N1.4 billion, VFD Group transacted 36.0 million stocks for N410.5 million, Access Holdings sold 35.3 million shares valued at N914.8 million, and Chams traded 31.0 million equities worth N115.0 million.