Mixed sentiments expected to rule stock prices

By Peter Egwuatu

THERE are indications that mixed sentiments would rule the equities market this week as more companies are expected to turn-in third quarter, 2017 (Q3’17)/ nine-month (9M’17) financial results showing mixed performances in line with most of them already announced in the past two weeks. Index valuation may even open the week negative.

Financial analysts have opined that investors will continue to react in diversity as more corporate earnings are released.

Accordingly, analysts at Vetiva Capital Management Limited, stated: “We note that sideways trading persisted at the close of trading last Friday as investors reacted to mixed corporate earnings. We expect this sentiment to filter into next week and anticipate a negative week open even as more corporate earnings are released.”

Analysts at GTI Research, an investment research outfit based in Lagos, said: “Investors’ reactions to corporate earnings will continue as they may likely rally for Nigerian Breweries. It recorded a growth of 14.4 per cent and 19.4 per cent in revenue and net income respectively for the nine months period.”

Meanwhile, the Nigerian equities market shed 15 bases bps at last week close to bring Week-on-Week, WoW, loss to 34bps.

Drilling into sectors, the Banking sector was the only bright spot for the day and week, notching 32bps Day-on-Day, DoD and 84bps WoW.

A total turnover of 1.394 billion shares worth N16.403 billion in 19,195 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 872.892 million shares valued at N14.016 billion that exchanged hands penultimate week in 19,047 deals.

The Financial Services Industry (measured by volume) led the activity chart with 1.116 billion shares valued at N10.153 billion traded in 9,942 deals; thus contributing 80.05 per cent and 61.90 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 95.005 million shares worth N3.251 billion in 4,443 deals. The third place was occupied by Conglomerates Industry with a turnover of 90.194 million shares worth N645.159 million in 1,136 deals.

Increased automation, efficiencies

Meanwhile, the CSCS has announced that it would increase automation and improve efficiencies in the Nigerian capital market with the deployment of TCS BaNCS, a world class multi-asset class solution for  securities depository, clearing and settlement.

The solution replaced the NASDAQ Equator which has been in use since inception of the company in 1997.

The solution change is core to the company’s business transformation initiatives which aim at improving efficiency in depository, clearing and settlement services.

“This is a significant milestone for us and a demonstration of our commitment to bring excellent customer service delivery and efficiency to the Nigerian Capital Market,” said Mr. Bola Adeeko, Acting Chief Executive Officer of CSCS.

Speaking further, Adeeko stated: “We are proud of this achievement and confident that the new solution will be beneficial to the teeming market participants in particular and the Nigerian Capital Market in general.”

While listing some of the opportunities available on the platform, Adeeko said that TCS BaNCS, as a market infrastructure, will drive Straight-Through Processing (STP) by providing the unique ability to support multiple markets and asset classes on the same platform. It will also support various types of account ownership structures such as Segregated Depository Account, Nominee/Special Purpose Vehicle Accounts and Custodian Accounts.

According to him, “this initiative aligns very closely with one of  our  strategic objectives, which is to improve efficiency in our depository, clearing and settlement services – ultimately, we believe our customers and stakeholders at large will enjoy improved service delivery.”