Investors record 4.39% returns year-to-date
A review of investment activities on the floor of the Nigerian Exchange Limited in October showed that investors in the equities market smiled to the banks with good returns on their investment. BUSAYO SAMUEL reports
Figures of trading transactions made available by the Nigerian Exchange Limited showed that Year –to- Date, return on investment stood at 4.39% percent for investors after a dreary half year 2021 performance.
The implication is that an investor who invested N1million in shares in the period of one month got a return of N43, 900 in capital appreciation apart from dividend and bonus. That return is higher than what a savings account with one or two percent interest rate will offer the account holder in one month.
The bullish trend has been linked to positive investor sentiment, upswing in oil prices in global oil markets and the consecutive decline in inflation numbers in the last six months.
Bismarck Rewane, Managing Director and Chief Executive Officer, Financial Derivatives Company Limited, noted that moderation in interest rates and investor’s rally for capitalized stocks with solid fundamentals are other factors which helped investors to make gains from the market.
Resilient corporate earnings, dividend hunting and speculative buying after a dreary H1 5.07% acquisition in FBNH by Femi Otedola, were other reasons given for a good return for investors.
Otedola, former chairman of Forte Oil Plc, is now the second single largest shareholder of FBNH Limited by the reason the serial acquisition of it shares on the floor of the NGx.
Meanwhile, NGX market cap 4.67 percent to N21.94 trillion in October buoyed by the NGX Group share listing of 1.96billion shares. Bulls gained steam to push NGX ASI 4.52 percent to 42,038.60 points.
Weekly performance
A total turnover of 2.179 billion shares worth N21.963 billion in 22,438 deals were traded in the first week of October by investors on the floor of the Exchange, in contrast to a total of 2.187 billion shares valued at N16.183 billion that exchanged hands in the last week in September in 14,377 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.770 billion shares valued at N18.058 billion traded in 12,942 deals; thus contributing 81.20% and 82.22% to the total equity turnover volume and value respectively.
The Conglomerates followed with 93.178 million shares worth N169.819 million in 736 deals.
The third place was ICT Industry, with a turnover of 72.338 million shares worth N1.043 billion in 861 deals.
“The bullish trend has been linked to positive investor sentiment, upswing in oil prices in global oil markets and the consecutive decline in inflation numbers in the last six months
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Trading in the top three equities namely FBN Holdings Plc, Universal Insurance Plc and Fidelity Bank Plc (measured by volume) accounted for 1.161 billion shares worth N12.338 billion in 3,460 deals, contributing 53.28% and 56.18% to the total equity turnover volume and value respectively.
Turnover in the second week ended October 15, recorded an upbeat as total turnover of 2.838 billion shares worth N31.653 billion in 23,355 deals were traded.
The Financial Services Industry (measured by volume) led the activity chart again with 2.428 billion shares valued at N26.442 billion traded in 13,884 deals; thus contributing 85.56% and 83.54% to the total equity turnover volume and value respectively.
The Consumer Goods followed with 170.407 million shares worth N1.653 billion in 3,350 deals.
The third place was Conglomerates Industry, with a turnover of 68.996 million shares worth N133.382 million in 625 deals. Trading in the top three equities namely FBN Holdings Plc, Guaranty Trust Holding Company Plc and Ecobank Transnational Incorporated Plc (measured by volume) accounted for 1.834 billion shares worth N23.372 billion in 5,981 deals, contributing 64.61% and 73.84% to the total equity turnover volume and value respectively.
The market opened for four trading days in the week ended October 22 as the federal government of Nigeria declared Tuesday, October 19, 2021 a public holiday to commemorate the Islamic festival ofEid-il-Maulud.
Meanwhile, a total turnover of 1.565 billion shares worth N18.384 billion in 21,621 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 2.838 billion shares valued at N31.653 billion that exchanged hands the preceding week in 23,355 deals.
Again, the Financial Services Industry (measured by volume) led the activity chart with 1.179 billion shares valued at N12.746 billion traded in 13,272 deals; thus contributing 75.38% and 69.33% to the total equity turnover volume and value respectively. The ICT Industry followed with 131.585 million shares worth N2.151 billion in 636 deals. The third place was Conglomerates Industry, with a turnover of 110.828 million shares worth N 262.227 million in 928 deals.
Trading in the top three equities namely FBN Holdings Plc, E-Tranzact International Plc and Access Bank Plc (measured by volume) accounted for 626.888 million shares worth N6.303 billion in 3,677 deals, contributing 40.07% and 34.29% to the total equity turnover volume and value respectively while total turnover of 3.001 billion shares worth N34.547 billion in 25,932 deals were traded in the last week of the month by investors on the floor of the Exchange, in contrast to a total of 1.565 billion shares valued at N18.384 billion that exchanged hands last week in 21,621 deals.
As usual, the Financial Services Industry (measured by volume) led the activity chart with 1.600 billion shares valued at N15.608 billion traded in 14,065 deals; thus contributing 53.33% and 45.18% to the total equity turnover volume and value respectively.
The Oil and Gas Industry followed with 845.699 million shares worth N11.725 billion in 1,706 deals. The third place was Conglomerates Industry, with a turnover of 220.120 million shares worth N335.235 million in 1,238 deals.
Trading in the top three equities namely Eterna Plc, FBN Holdings Plc, and Transnational Corporation Of Nigeria Plc (measured by volume) accounted for 1.731 billion shares worth N19.681 billion in 4,207 deals, contributing 57.66% and 56.97% to the total equity turnover volume and value respectively.
“Telecoms sector is expected to remain resilient driven by Increased competition and partnership with financial institutions and digital content providers
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Performance by sector
The Cement sector recorded an impressive performance as key players like Dangote Cement, Lafarge Plc and BUA Cement declared improved revenue and profit in nine months of the financial year ending December 2021.
Increased housing infrastructure & commercial construction and 11% increase in cement prices in 10 months were reasons for their impressive outing. Investors in Dangote Cement stock recorded a 14% YTD return in the period while Lafarge Plc offered its investors a 28% gain. Shareholders of BUA Cement Plc , however lost 7% YTD in October.
Outlook
Outlook for the sector, according to Analysts at FDC Limited, is positive as robust demand for housing and infrastructural activities will persist on the back of economic recovery and the 18.4% increase in capital expenditure to N4.89 trn 2022 budget.
But inflationary pressures is expected to taper private consumption and contract profit margins while weather irregularities will likely put a drag on industry growth. Meanwhile, industry will start to benefit from AfCFTA through increased productivity and deepened market penetration
Telcos Industry
Top and bottom line figures remained resilient despite restrictions on SIM activations as MTN crossed the N1trn revenue mark for the first time ever, supported by increase in data traffic and data usage, improved operational efficiency.
Airtel on the other hand recorded a 33% increase in interim dividend in line with its upgraded dividend policy Airtel. YTD, MTN investors gained 3% return on investment while Airtel lost 8% on their investment.
Outlook
Telecoms sector is expected to remain resilient driven by Increased competition and partnership with financial institutions and digital content providers. Telecoms are expected to focus on increased network capacity, expanding rural coverage and focus on 4G coverage, deepened multi products propositions as the industry is projected to grow at 14-15% in 2021.
Breweries industry
There was impressive performance across players in the breweries industry as bottom line was supported by strong revenue growth base year effect. Guinness Plc recorded a 38% reduction in finance cost but average growth of 35% in production cost impacted negatively on its profit.
Shareholders of Nigerian Breweries Plc lost 6% YTD as Guinness was up 91%.
Outlook
Management of players in the industry is expected to improve cost containment as domestic prices pinch. Rising inflation, increasing insecurity and regulatory risk are possible limiting factors for growth while increased government spending as elections approach and flexible exchange rate and increased forex supply to increase output will drive performance.
