Market Update for December 12 2017
Profit booking on the floor of the Nigerian Stock Exchange on Tuesday slowed down, while volatility continued, halting two days of bear market as highly capitalized stocks appreciated marginally in value, ahead of the release of the November inflation figure. This was just as investors continue repositioning in fundamentally sound equities of stocks with good management and corporate governance that have remained attractive to foreign and institutional investors as the year winds down. The improvement in numbers presented by consumer, industrial and banking stocks have so far supported their share prices, pointing to the possibility of higher payout in 2018.
Trading opened on the downside in the morning and rallied little at midday to hit an intraday high of 39,104.09, reducing the loss momentum and crossing into the green region from a low of 38,836.25 before pulling back to close the day at 38,924.63, which was nonetheless higher than its 38,913.99 opening level.
Market technical for the day was mixed as NSE Index resisted further decline on a huge transaction volume. Volume index for the day stood at 0.96 with selling pressure of 67% and buying volume, 33% of the total transaction to short live bear transition on a mixed sentiments.
The breakout of oil price to the current high of $65.62 per barrel on Tuesday after a major pipeline was shut, due to cracks, a situation that would further push up government’s revenue, while enhancing the nation’s foreign reserves, despite the 1.8m barrels per day production cap set by the Organisation of Petroleum Exporting Countries (OPEC).
Meanwhile, the All-Share index inched up by 10.64 basis points to close at 38,924.63, from the 39,913.99 points, representing a 0.03% growth, in the same direction, market capitalisation climbed up by N3.71bn to N13.56tr, from previous day’s N13.55tr, representing a 0.03% value gain. The upturn recorded resulted from value gain in medium and high cap stocks like Dangote Cement, Nigerian Breweries, Guaranty Trust Bank, Guinness Nigeria, FBNH, Dangote Sugar and Dangote Flour, which impacted positively on the ASI’s year-to-date returns, to 44.84%, just as YTD growth in market capitalisation fell to N4.31tr, representing a 46.61% rise over the year’s opening value.
Market breadth for the day was negative as the number of decliners outpaced advancers in the ratio of 23:21 on a relatively huge traded volume that was higher than Monday’s level.
Transactions in terms of volume and value were up by 31.97% and 444.92% respectively to 462.67m shares worth N26.81bn from previous day’s 350.6m units valued at N4.92bn. The day’s activity was driven mainly by Dangote Cement and others like FBNH, Diamond Bank, FCMB and AXA Mansard, which topped the volume chart.
Best performing price at the end of the day were UBN and Diamond Bank that topped the advancers table, gaining 10.01% and 7.14% respectively to close at N7.91 and N1.50 on positive market forces.
On the flipside, FCMB and Fidelity Bank shed 4.69% to close at N1.22 and N2.26 respectively on market forces and profit taking,
Being the mid-week, volatility will continue as traders take profit and reposition, while at the same time smart money continue their accumulation of shares in value stocks ahead of 2018 earnings reporting season and Santa Claus rally amidst the improving and positive economic data especially as inflation figure for November is expected before the week runs out. The positive outlook for emerging market in 2018 as a result of high commodities price is a major attraction as currencies and exchange of these developing markets are relatively stable. This is in addition to undervalued assets in these exchanges.
Again, we advise that investors allow numbers to guide their decisions while repositioning for the rest of the year’s trading activities, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.
It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position.
• Foreign Exchange liquidity may have helped industries to grow
By Obinna Chima
After contracting for five consecutive quarters, the Nigerian economy has finally exited the recession, as data on the country’s gross domestic product (GDP) growth rate to be released at 10 a.m. today by the National Bureau of Statistics (NBS) has shown that the economy grew at 0.55 per cent in the second quarter (Q2) of 2017.
The preliminary Q2 2017 GDP results, which THISDAY had exclusively obtained from presidency sources, had been embargoed by the NBS at the weekend until the official release of the report today.
But THISDAY decided to go to press last night with the report because Reuters had flouted the embargo.
The Q2 2017 growth rate of 0.55 per cent (year-on-year) was 2.04 per cent higher than the rate recorded in the corresponding quarter of 2016 (-1.49%) and higher by 1.46 per cent points from rate recorded in the preceding quarter, which was revised to –0.91% from –0.52% due to revisions to crude output for March 2017.
According to the preliminary results for the second quarter of the year, Nigeria’s economic recovery was driven principally by the performance of four main economic activities comprising oil, agriculture, manufacturing and trade.
The results revealed that Oil GDP recovered significantly from -11.63 per cent in Q2 2016 and -15.40 per cent in Q1 2017 to 1.64 per cent in Q2 2017.
But while Oil GDP expanded considerably in the second quarter of 2017, Non-oil GDP only grew at 0.45 per cent, down from 0.72 per cent in the preceding quarter and -0.38 in the corresponding period in 2016.
It also showed that agriculture continued its strong and positive growth, which it had maintained throughout the recession, growing by 3.01 per cent in Q2 2017, from 3.39 per cent in Q1 2017 and 4.53 per cent in Q2 2016.
Manufacturing retained its positive growth for the second consecutive quarter in Q2 2017, growing at 0.64 per cent compared to 1.36 per cent in Q1 2017 and -3.36 per cent in Q2 2016, while trade which has a dominant share of GDP remained negative at -1.62 per cent, but the contraction in the sector decelerated from the -3.08 per cent recorded in Q1 2017.
Furthermore, electricity and gas and financial institutions sectors also recorded strong growths, with electricity and gas growing by 35.5 per cent, compared to -5.04 per cent in Q1 2017 and -10.46 per cent in Q2 2016 and financial institutions growing by 11.78 per cent in Q2 2017, compared to 0.60 per cent in Q1 2017 and -13.24 per cent in Q2 2016.
The results also showed that the industry sector grew positively by 1.45 per cent in Q2 2017, after nine consecutive quarters of negative growth since Q4 2014.
As a percentage of GDP, services retained the giant share of GDP at 53.73 per cent in Q2 2017, down by 1.94 per cent points (55.67 per cent) from the first quarter of 2017 and 54.80 per cent in Q2 2016; industries accounted for 23.31 per cent of GDP, compared to 22.90 recorded in Q1 2017 and 22.65 per cent in Q1 2016; while agriculture accounted for 22.97 per cent of GDP in the quarter under review, compared to 21.43 per cent in Q1 2017 and 22.55 per cent in Q2 2016.
From Fred Itua, Abuja
Twenty Minister of Information, Culture and Tourism, Alhaji Lai Mohammed has disclosed how President Muhammadu Buhari is spearheading a programme where Africans, including Nigeria, would not need visas to visit other African countries.
The minister said once the move is accomplished and the visa regime is liberalised, tourists would be encouraged to visit African countries.
Mohammed made these known when he briefed newsmen, shortly after defending the sector’s budget before the Senate Committee on Tourism, in Abuja, yesterday.
The minister noted that there is an improvement in Nigeria’s visa regime and that the current “visa on arrival programme” recently introduced by the Federal Government, is working very well.
Also, 24 hours after Minister of Finance, Mrs. Kemi Adeosun told visitors that the Federal Government will soon release N750 billion to fund capital projects in the 2017 budget, Mohammed, also spoke on the level of implementation.
“It is not that government is deliberately withholding releases to fund the 2017 budget or starving us. It is because we do not have enough money to do that.
“When budgets are made, they are made based on certain assumptions and if you are not able to get enough to meet your assumptions, there will be poor release.
“At least, there is improvement in different sectors like the Nigeria Customs Service, while the price of crude oil is getting better. There is also more peace in the Niger Delta. So we can produce more,’’ the minister disclosed.
He opined that Public, Private Partnership is one of the most viable ways to revive the tourism sector and that efforts are being made by the present administration in that direction.
The minister also said there is remarkable improvement in the sector’s activities.
He said: “Anybody who has been observing what is happening in the creative industry, including culture, film industry, fashion, will see that there is remarkable transformation and that is because government has provided the enabling environment.
“The creative industry is on a tripod, the government, the private sector and the practitioners and what government has done is to give the support that the industry needs to grow.
“For instance, sometime this year, the Federal Government included the film industry in the list of industries that will enjoy pioneer status. What this means is that if you invest in this industry with a certain amount of money, you will be entitled to tax holiday for three years at the initial stage and another two years. In addition, dividends from your businesses will be exempted from taxation. This is one of the incentives government has given
From Fred Ezeh, Abuja
The Joint Admissions and Matriculation Board (JAMB) said it has remitted another N3.6 billion generated from sales of the 2017 Unified Tertiary Matriculation Examination (UTME) application forms and other sundry business into the Federal Government treasury.
This was in addition to an earlier remittance of N5.3 billion, bringing to total N7.8 billion this year.
Oloyede disclosed this at a meeting with executives of the Colleges of Education Academic Staff Union (COESU) in Abuja, yesterday.
He maintained that the Board will continue to run its financial and other activities with transparency and accountability, even as it prepares for 2018 exercise.
The JAMB boss told COESU officials who complained of low academic-performing students in Colleges of Education that it is not the fault of the board but the choice of the candidates.
He said: “Applicants are always allowed to choose colleges of education as first choice institutions in admission forms.
“But, most of them prefer to choose universities because the O’ level five credits requirement for admission into higher institutions is uniform.”
COESU National President, Nuhu Ogirima, in his remarks, stressed that the admission system does not augur well for the teacher education system, especially at the colleges of education level.
He solicited the support of the board for the six-man committee that was constituted to review admission requirements for colleges of education.