Positive sentiments to linger in equities market

*As Fidson, Livestock Feeds record highest returns in 10 days 

By Peter Egwautu

The positive sentiments in the Nigerian equities market may continue this week due to the impact of the 2017 budget just passed last week by the National Assembly and the new Investors and Exporters ,I &E  forex window introduced by th the  Central Bank of Nigeria, CBN.

Meanwhile, Fidson   Healthcare Plc , Livestock Feeds, May & Baker Plc, Oando, and Nahco  Plc  recorded the highest return on the Nigerian Stock Exchange, NSE, following the rally that ensued in the market in the last 10 days .

“Recent improvements in global oil prices above the US$45.0/b mark, improvement in domestic production currently above 2.0mbpd, fiscal responsiveness – including the release of Economic Recovery Growth Plan,   ERGP, successful issuance of US$1.5bn Eurobond, passage of 2017 budget – as well as recent positive readings in manufacturing PMI, suggest possible rebound in economic activities from Q2:2017,” analysts at Cowry Assets Management, a Lagos- based investment outfit said.

Following  the ten consecutive days of positive gains, the Nigerian equities market returned 5.76 per cent   Year-to-Date (YtD), to push the index level to 28,423.70 bases points, its highest level since December 2015.

Since the rally began on the 27th  of April 2017, sixty-five (65) stocks have recorded appreciations in value.  Fidson  is currently leading the pack, after recording a return of 92.38 per cent   , the last ten (10) days. Following closely on the list of gainers are  Oando  (64.48%),  May & Baker  (50.59%),  Livestocks  (36.76%) and  Nahco  (32.11%).

Also, activity last week   on the   NSE showed that  a total turnover of 3.255 billion shares worth N28.738 billion in 25,370 deals were traded by investors on the floor of the Exchange in contrast to a total of 1.154 billion shares valued at N10.439 billion that exchanged hands penultimate week in 16,676 deals.

The Financial Services Industry (measured by volume) led the activity chart with 2.716 billion shares valued at N17.230 billion traded in 15,103 deals; thus contributing 83.42% and 59.96% to the total equity turnover volume and value respectively.

The Consumer Goods Industry followed with 185.750 million shares worth N6.596 billion in 3,817 deals. The third place was occupied by Conglomerates Industry with a turnover of 156.010 million shares worth N385.427 million in 1,340 deals.

Trading in the Top Three Equities namely – FBN Holdings Plc, FCMB Group Plc and Zenith International Bank Plc and (measured by volume) accounted for 1.419 billion shares worth N8.185 billion in 5,117 deals, contributing 43.59% and 28.48% to the total equity turnover volume and value respectively.

Future outlook:

Cowry Assets Analysts   said   “While we anticipate profit taking in the days to come, we expect the general positive sentiments in the market to linger. This position is based on our outlook for 2017, as well as projected improvements in company financial performances and corporate actions. Although some of the gains in the market were largely due to the bandwagon effect, we note that most of the price gains recorded so far are fundamentally justified. Furthermore, based on our valuation estimates, some of these stocks still possess upside potentials, implying value may still be inherent.”

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