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Nigeria: Investors Trade N11.9 Billion Shares in Three Days

This Day (Lagos)

Goddy Egene and Eromosele Abiodun

2 January 2012

It was a mixed performance at the stock market in the last week of 2011 as volume and value rose, while the index fell. Although the market opened for only three days due to the public holidays declared on Monday and Tuesday to celebrate Christmas and Boxing Day, investor traded 1.72 billion shares worth N11.9 billion in 7,309 deals.

This showed an increase of 10.2 per cent and 48 per cent in volume and value terms respectively above the 1.55 billion shares valued at N7.993 billion exchanged in 15,494 deals the previous week. The Financial Services sector accounted for 1.55 billion shares valued at N10.15 billion traded in 4,282 deals.

A further analysis of the trading statistics showed that the banking subsector of the Financial Services sector was the most active during the week (measured by turnover volume) with 1.35 billion shares worth N10.035 billion exchanged by investors in 3,766 deals. The volume of shares sold in the banking sector was largely driven by activity in the shares of First Bank of Nigeria Plc.

The market had the previous week recorded impressive performance on the back of activities of bargain hunters to take position ahead of expected corporate earnings and analysts expectation that the impact of the 2012 Federal Government budget on the capital market would be positive.

Trading however, resumed last week on a poor note as anxious investors rushed in to take profit following the previous week’s performance. And by the close of trading last Friday, the Nigerian Stock Exchange (NSE) All-Share depreciated by 32.63 points or 0.15 per cent to close on Friday at 20,730.63 while the market capitalisation of the 186 First -Tier equities dropped to N6.533 trillion.

Also, the NSE-30 Index depreciated by 7.99 points or 0.9 per cent to close at 923.77. The previous week, the NSE-ASI and the NSE-30 Indices appreciated by 3.6 per cent and 4.0 per cent, respectively.

Three of the four sectoral indices appreciated during the week compared with two that appreciated during the preceding week. While the NSE Food/Beverage Index appreciated by 5.19 points or 0.9 per cent to close at 589.60, the NSE Banking Index appreciated by 0.36 points or 0.14 per cent to close at 274.26 and the NSE Insurance Index appreciated by 0.06 points or 0.04 per cent to close at 143.54. However, the NSE Oil/Gas Index depreciated by 0.96 points or 0.42 per cent to close at 220.11.

Gainers and Losers

The price movement chart of the NSE displayed a total of 33 equities that appreciated in price during the week, lower than the 41 of the preceding week. Dangote Cement Plc led on the gainers’ table with a gain of N5.27 to close at N110.77 per share while Guinness Nigeria Plc followed with a gain of N5.00 per cent to close at N250.00 per share.

Other price gainers’ in the top 10 category included: Flour Mills of Nigeria Plc (N2.95), Unilever Nigeria Plc (N2.00), UAC of Nigeria Plc (N1.17), Okomu Oil Palm Plc (N1.10), Presco Plc (N0.80), Ecobank Transnational Incorporated (N0.53 ), Roads Nigeria Plc (N0.41) and Dangote Flour Mills Plc (N0.35 ).

Conversely, 29 stocks depreciated in price, lower than the 32 of the preceding week. Nigerian Breweries Plc led on the price losers’ table, dropping by N15.68 to close at N94.42 per share while Seven-Up Bottling Company Plc followed with a loss of N2.44 to close at N46.47 per share.

Other price losers in the top 10 category included: MRS Oil Nigeria Plc (N1.67), Lafarge WAPCO Cement Nigeria Plc (N1.64), Forte Oil Plc (N1.27), Union Bank of Nigeria Plc (55 kobo), Ashaka Cement Plc (32 kobo), Ikeja Hotel Plc (26 kobo), E-Tranzact International Plc (26 kobo) and Skye Bank Plc (22 kobo).

Taxation on Transactions

Meanwhile, the fragile investors’ confidence may get a boost in the days ahead if reports that the Exchange is meeting with various stakeholders, including government and its agencies, to stop the payment of taxes on transactions held on the floor of the exchange, are anything to go by.

Chief Executive Officer of the NSE, Mr. Oscar Onyema, had while speaking at an interactive session with newsmen at the Kaduna, last week, stated that the Exchange was working on driving investors’ education through investors’ clinic and market segmentation.

According to Onyema, the recently launching of the NewGold Exchange Traded Fund (ETF) has compelled the NSE to work hard towards ensuring that other ETF follows in a bid to further boost commodity trading in the country.

“We are in Kaduna to engage the brokerage community in the catchment area to see how we can facilitate capital raising and investors rising. Though improving investors’ confidence is challenging, the exchange is making lots of efforts to ensure that there are the right people at the right positions to drive strategic initiatives and communications with different stakeholders.

“We are advocating position with different agencies and government that there should be no taxation on transactions on the floor of the exchange, the value added tax and stamp duties could go as high as 12 per cent, for trading which is from investors while vat is consumption tax. We are also following other positions in different strata of government and appropriate communities, “he said.

He noted that, “As you know, the global gold market is traded in dollars and the ETF is traded in naira, there would be other ETFs to track some of our equity indices such as the NSE-30 index to track the top 230 listed stocks.”

Public Hearing on Capital Market

Also, a bid to get the market back on track received another major boost last week when the House of Representatives Committee on Capital Market and Institutions, said it would in January 2012 hold a public hearing on the nation’s capital market as part of efforts to resolve the crisis in the market.

The House had on December 14, passed a resolution mandating the Committee to conduct the public hearing.

Chairman of the Committee, Hon. Herman Hembe, confirmed to the THISDAY that the public hearing would take place in January.

“I can confirm to you that as part of efforts to resolve issues in the capital market and restore confidence back to the market and as part of our commitment to ensure that wealth of investors who patronise the Nigerian capital market are preserved, the Committee will hold a public hearing in January. The date for the hearing will be decided and made known to members of the public” Hembe said.

Still as part of efforts to reposition the market, the capital market community comprising the apex regulator, self regulator organisations and operators recently held a retreat in Uyo, Akwa Ibom, under the Capital market Community (CMC).

The retreat, which was the first of its kind was used to review how the market had fared in the outgoing year and how to reposition it in 2012.

Assessing the outcome of the retreat, the Director-General of the Securities and Exchange Commission (SEC), Ms. Arunma Oteh, said it exceeded the expectations of the all the stakeholders.

She said the objective of the retreat was to give operators an opportunity as a community to assess what were the issues that they had to deal with in 2011.

“What are the successes, what are the challenges we faced? And then map out the way forward to ensure we benefit from the experiences of 2011 for 2012. In my estimation, and I know I speak for all my colleagues, we exceeded our expectations in terms of what we wanted to achieve for the capital market retreat,” she declared.

According to her, some of the things they discussed related to how to ensure that both local investor base and retail investor base are as active as they can be in our market.

“What we will do early next year is to map out more clearly that plan to ensure that local investor base are able to take up the opportunity that the market that had declined provide. Because we don’t want a situation where it is the international investors who are picking up the equities at reasonable prices and both our local institutional and local retail investors are not able to. So, we have mapped out some very specific plans which we will further develop in January,” she said.

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