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Investors’ sentiment on stocks may improve amidst more firms’ earnings announcements

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Lost over N20bn last week

By Peter Egwuatu

INVESTORS’ sentiment on stocks listed on the Nigerian Stock Exchange, NSE, may improve as more companies’ earnings for the full year 2017 are expected to be released this week.

The stock market lost over N20 billion last week following  profit taking by investors as the NSE market capitalisation (market value of stocks) dropped to  N14.982 trillion at the end of trading last week Friday, from  N15.002 trillion the penultimate week.

The floor of Stock exchange

Analysts have opined that trading sentiment will continue to improve as investors begin to see more positive 2017 financial results from companies across the sectors on the Exchange.

Analysts with a Lagos based investment firm, Vetiva Capital Management have stated: “We believe trading sentiment will continue to improve at week close, albeit with the ASI ending the week with a negative Week-on-Week, WoW, return. We foresee a turnaround at the start of the coming week even as renewed appetites for banking stocks remain strong.”

Vetiva analysts tipped United Bank for Africa, UBA Plc and Ecobank Transnational Incorporated,  ETI,    as stock to watch, stating : “ UBA released its Full Year, FY’17 results with top and bottom line up 20% to  N462 billion and 9% to  N79 billion – coming in line with our expectations. The Group proposed a final dividend of  N0.65 (2016:  N0.55; Vetiva:  N 0.65). The stock currently trades at a price of N11.50 and has returned 12% Year to Date, YtD .  ETI released its Full Year, FY’17 results, with top and bottom line coming in at  N764 billion and  N70 billion, up 15% and 233% y/y respectively. The stock currently trades at N17.95 and has returned 6% YtD.”

Meanwhile, a total turnover of 2.328 billion shares worth N28.927 billion in 25,530 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 2.444 billion shares valued at N36.665 billion that exchanged hands last week in 26,712 deals.

The Financial Services Industry (measured by volume) led the activity chart with 1.784 billion shares valued at N20.385 billion traded in 16,823 deals; thus contributing 76.60% and 70.47% to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 171.111 million shares worth N5.404 billion in 4,055 deals. The third place was occupied by Oil and Gas Industry with a turnover of 124.065million shares worth N296.727 million in 1,607 deals. Trading in the top three Equities namely – Zenith International Bank Plc, Access Bank Plc and Fidelity Bank Plc (measured by volume) accounted for 664.391 million shares worth N10.659 billion in 6,429 deals, contributing 28.54% and 36.85% to the total equity turnover volume and value respectively.

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