Nigerian stocks declined 1.08 per cent to a more than three-week low as investors sold off shares from across the board after weak sentiment hit equities. The main share index fell for the sixth session, down to 28,533.40 points. The relatively liquid banking sector declined the most, falling 3.85 per cent. Equities have been hit by weak sentiment, traders say, worsened by fears that the coronavirus outbreak would hit Chinese demand, one of Nigeria’s major trading partners, and dampen growth. On Friday, the United States issued a travel ban targeting prospective immigrants from Nigeria and five other countries, a move that could affect thousands of people, further worsening sentiment.
Stocks, which fell 14.6 per cent last year, started to recover this year, thanks to higher oil prices and as domestic funds pile into shares. However, with the U.S. visa policy and the coronavirus outbreak, fears over local growth have surfaced. A total of 24 stocks declined while only eight advanced on low volumes. Two companies traded flat while more than 100 others recorded no trades. Sterling Bank and Cadbury shed more than 9% while First Bank and Access Bank both declined more than 8%. Consequently, market capitalisation dipped ₦159.7 billion to close at ₦14.7 trillion. Activity level weakened as volume and value traded fell 29.9 per cent and 25.3 per cent to 246.5 million units and ₦3.1 billion respectively. The top traded stocks by volume were ZENITH (47.5m units), GUARANTY (35.8m units) and FCMB (23.5m units) while GUARANTY (₦1.1bn), ZENITH (₦952.9m) and MTNN (₦159.7m) led by value.
Sector performance was bearish as all indices under our coverage lost save the AFR-ICT index which closed flat. The Banking index led laggards with a 3.9% loss as a result of sell-offs in ZENITH (-4.6%), ACCESS (-8.1%) and FBNH (-8.4%). Similarly, the Industrial Goods (-1.3%) and Insurance (-0.1%) indices ebbed on the back of losses in BUACEMENT (-2.2%) as well as WAPIC (-9.1%) and CHIPLC (-2.8%). Price depreciation in CADBURY (-9.8%), VITAFOAM (-3.6%) and FORTE (-10.0%) dragged the Consumer Goods and Oil & Gas indices 0.1% and 0.8% lower respectively. Investor sentiment as measured by market breadth (advance/decline ratio) weakened to 0.3x from the 1.7x recorded on the previous trading day as 8 stocks gained as opposed to 24 losers. The best performing stocks for the day were LAWUNION (+10.0%), HONYFLOUR (+9.3%) and UPDCREDIT (+8.1%) while NCR (-10.0%), FORTE (-10.0%) and CADBURY (-9.8%) lost the most. For the rest of the week, we expect corporate earnings release to dictate the direction of the equities market.
Today’s Corporate Actions
Consolidated Hallmark Insurance Plc – Proposed Rights Issue Dealing Members are hereby notified that Consolidated Hallmark Insurance Plc (“Consolidated Hallmark” or “the Company”) has through its Stockbroker, Planet Capital Limited, submitted an application to The Nigerian Stock Exchange (The Exchange) for the approval and listing of a Rights Issue of Two Billion, thirty-two Million, five Hundred Thousand (2,032,500,000) ordinary shares of Fifty Kobo (N0.50) each at Fifty-two Kobo (N0.52) per share, on the basis of one (1) new share for every four (4) ordinary shares held. The Qualification Date for the Rights Issue is today Monday, 03 February 2020.
Highlights of Some Corporate Earnings Disclosures Announced Today:
Daar Communications Plc (Q4; 2019): Revenue declined 4.6% y/y to ₦4.4bn while PAT moderated to ₦369.0m from ₦3.2bn in 2018. As a result, EPS improved to ₦0.5 (Q4 2018: 0.40).
Fidson Healthcare Plc (Q4: 2019): Revenue fell 25.0% y/y to ₦3.6bn from ₦4.8bn while PAT improved to ₦39.1m from -₦5.6m in 2018
Union Homes Real Estate Investment Trust Plc (FY 2019): Net income before taxation declined 8.8% y/y to ₦350.1m while basic EPS remained flat at ₦1.9 (Q4 2018: ₦1.9)
Market Statistics for Monday, 3rd February 2020
| Market Cap (N’bn) | 14,697.3 |
| Market Cap (US$’bn) | 40.8 |
| NSE All-Share Index | 28,533.40 |
| Daily Performance % | (1.1) |
| W/W Performance % | (1.1) |
| MTD Performance % | (1.1) |
| QTD Performance % | 6.3 |
| YTD Performance % | 6.3 |
| Daily Volume (Million) | 246.5 |
| Daily Value (N’bn) | 3.1 |
| Daily Value (US$’m) | 8.7 |
Source: Afrinvest
