Equities in strong gaining momentum – NIGERIAN equities sustained their bullish rally for the second consecutive quarter with a net capital gain of about N1.23 trillion in the third quarter, including a strong rally of N785 billion in September. The gaining momentum continued with net gain of N80 billion in the first trading in the month.
Benchmark indices at the Nigerian Stock Exchange (NSE) at the weekend showed a sustained rally at the stock market with successive consolidation in the upward pricing curves. The All Share Index (ASI)- the common value-based index that tracks share prices of all quoted equities at the NSE, indicated average gain of 9.61 per cent in the third quarter ended September 30, 2020, equivalent to net capital gain of N1.227 trillion.
The ASI, which doubles as Nigeria’s sovereign equities index, showed average gain of 5.94 per cent last month, equivalent to net capital gains of N784.85 billion.
Nigerian equities had witnessed a major recovery in the second quarter ended June 30, 2020 with positive average return of 14.12 per cent within the three-month period, representing net capital gains of N1.656 trillion.
The main index finally erased the hangover from the first quarter with its first leap in October, rising by 0.57 per cent 0r N80 billion to close weekend with average year-to-date return of 0.54 per cent. The ASI closed weekend at 26,985.77 points while aggregate market value of all quoted equities closed at N14.105 trillion.
Nigerian stocks had posted net loss of N2.68 trillion in the first quarter, which overshadowed the second quarter recovery, leaving investors with net loss of N1.14 trillion for the six-month, half-year period. The ASI had posted a double-digit negative return of 20.7 per cent in the first quarter, driven by a steep decline of 18.75 per cent in March.
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The ASI closed last month at 26,831.76 points as against 25,327.13 points recorded in August 2020 and 24,479.22 points recorded at the beginning of the third quarter, the closing index for June 30, 2020. It had opened the year at 26,842.07 points.
Aggregate market value of all quoted equities had opened the year at N12.958 trillion. It closed last month at N14.025 trillion while rallying further to close weekend at N14.105 trillion. It had closed first half at N12.770 trillion.
The difference between the percentage change in market value and the ASI was due mainly to additional listing of shares. ASI, a weighted value-based index, is usually adjusted for new listings while additional shares are directly credited to market value without any adjustment. ASI is used as the main tracker of price changes.
Total equities turnover at the NSE last week stood at 1.53 billion shares worth N16.90 billion in 17,882 deals, as against a total of 1.57 billion shares valued at N20.56 billion traded in 18,396 deals in previous week.
The financial services sector led the activity chart with 1.292 billion shares valued at N10.562 billion traded in 10,046 deals; thus contributing 84.29 per cent and 62.49 per cent to the total equity turnover volume and value. The conglomerates sector followed with 62.395 million shares worth N89.205 million in 453 deals while industrial goods sector placed third with a turnover of 55.168 million shares worth N2.976 billion in 1,752 deals.
Banking stocks dominated activities chart with the trio of Zenith Bank Plc, Sterling Bank Plc and United Bank for Africa Plc emerging the most active stocks. The three most active stocks accounted for 815.646 million shares worth N7.311 billion in 4,461 deals, contributing 53.22 per cent and 43.26 per cent to the total equity turnover volume and value respectively.
“We anticipate a sustained bullish run in the coming week as investors continue to position in fundamentally sound stocks ahead of earnings releases for the third quarter,” Afrinvest Securities stated.