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Equities trading rises by 228% as QNB buys into ETI

By on September 9, 2014

The value of equities traded on the Nigerian bourse Soared by 228 per cent last week to N52.808 billion, following the acquisition of 12.5 per cent stake in Ecobank Transnational Incorporated (ETI) by Doha-based Qatar National Bank (QNB).  Investors had invested N16.086 billion in 1.342 billion in 22,481 deals the preceding week amid bearish trend.
Although the bears remained in control of the market last week, the acquisition of 12.5 per cent stake in ETI shares by QNB boosted the value and volume of trading. Specifically, investors committed N52.808 billion in 3.280 billion shares in 25,592 deals. Out of this value, N36.722 billion was staked on ETI’s shares. QNB bought the ETI’s   shares from the Asset Management Corporation of Nigeria (AMCON) on the floors of the Nigerian Stock Exchange (NSE).

Ecobank said, following the transaction, it was discussing a strategic partnership with QNB, which will enable the two banks to forge business relationships of mutual interest to their respective customers.
According to Group Chief Executive Officer   of ETI, Mr. Albert Essien the strategic link with QNB, one of the world’s strongest banks, will enhance Ecobank’s reach in North Africa and the Gulf.” “Ecobank already has a strong strategic partnership with South African banking giant Nedbank, which makes it a dominant player in Middle Africa and South Africa. This will enhance Ecobank’s position as the Pan-African bank,” Essien said.
Positive investors’ reactions to the deal led a 5.6 per cent in the share price of ETI to close at N17.86 per share in a week that the  NSE All-Share Index dipped further by  0.89 per cent to close at 41,160.62 , while market capitalisation closed lower at N13.591 trillion.  The persistent bearish trading has led to the market recording a year-to-date (YTD) depreciation of 0.41 per cent as at last Friday.

A further analysis of  the activity chart showed that  the  Financial Services Industry led the activity chart with 2.741 billion shares valued at N41.891 billion traded in 13,170 deals, thus contributing 83.59 per cent and 79.33 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with a turnover of 239.064 million shares worth 1.847 billion in 2,886 deals. The third place was occupied by Oil and Gas Industry with 98.217 million shares worth N1.598 billion in 2,997 deals.

Summary of Daily Performance
The equities market commenced the month of September in the red, reversing the short term gains posted in the last two trading sessions. Tier-1 banks in the financial sector:  Zenith Bank Plc, Guaranty Trust Bank Plc, UBA Plc and Access Bank Plc accounted for last Monday’s drag, trimming a cumulative 132.1 points off the index. At the close of trading, the benchmark declined by 0.32 per cent to close at 41,398.05 points, whilst market capitalisation lessened by N44.3 billion to N13.67 trillion. Market sentiment was weak last Monday as 30 decliners outweighed 25 gainers on the bourse. The negative trend was also evident in volume and value traded as they both declined 37.5 per cent and 63.0 per cent respectively. As a result, a total of 222.42 million units of shares valued at N2.26 billion were traded on the floor.

On Tuesday, the benchmark index again closed in the negative as confidence levels continued affect  the  Nigerian bourse. Traders took profit on short gains in Nestle Nigeria Plc, Access Bank Plc and FBN Holdings Plc, offsetting marginal advances by previous laggards; Zenith Bank Plc and Dangote Cement Plc. At the close of business on the day, the broad index dropped 133.40 points to settle at 41,264.65 points. In the same way, market capitalisation also declined N44.05 billion to close N13.63 trillion. Market activity however took a significant upturn driven by heavy trades in the shares of Dangote Cement Plc (47.13 per cent of market turnover). In all, 296.10 million units of shares worth N6.49 billion were exchanged.

The equities market closed on a negative note on Wednesday, as the benchmark index depreciated by 0.14 per cent to close at 41,207.79 points, compared to the depreciation of 0.32 per cent recorded the previous day. The depreciation in the Index  on that day  could be attributed to the losses recorded in the share prices of some highly capitalised stocks such as: Nestle Nigeria Plc, Zenith Bank Plc, Unilever Nigeria Plc, FBN Holdings Plc and Nigerian Breweries Plc among others. Similarly, the market capitalisation depreciated by 0.14 per cent to close at N13.61 trillion, compared to the depreciation of 0.32 per cent recorded the previous day to close at N13.63 trillion. The total value of the stocks traded today on the floors of The NSE was N2.44 billion, down by 62.34 per cent from N6.49 billion traded Tuesday.

The market continued to trend southwards on Thursday as the benchmark index closed 0.46 per cent lower than previous day. The All Share Index settled at 41,017.49  as negative sentiments prevailed towards Guaranty Trust Bank Plc, Nestle Nigeria Plc and Dangote Cement Plc while renewed interests were seen in both ETI Plc and PZ Industries.  Following the same trend as the index, market capitalisation declined  by N62.84 billion and closed at N13.54 trillion. Activity level was improved last Thursday with volume traded soaring by 142 per cent to 485.62 million units with turnover increasing as well by 43.6 per cent to N3.51 billion. The uptick in turnover was driven by Nigerian Breweries Plc and Transcorp Plc’s 28 per cent contribution to the total value of trades.

The equities market returned to positive territory at the close of business last Friday as the benchmark index appreciated by 0.35 per cent to close at 41,160.62, compared to the depreciation of 0.46 per cent recorded last Thursday. The appreciation in the Index  was as a result of the gains recorded in the share prices of Lafarge WAPCO Plc, Guaranty Trust Bank Plc, Zenith Bank Plc, FBN Holdings Plc and ETI Plc among others. Similarly, the market capitalisation appreciated by 0.35 per cent to close at N13.59 trillion, compared to the depreciation of 0.46 per cent recorded last Thursday to close at N13.54 trillion. The total value of the stocks traded last Friday on the floors of the NSE was N2.73 billion, down by 92.98 per cent from N38.87 billion traded last Thursday.

Gainers and Losers
Meanwhile, 28 equities appreciated in prices during the week the same with 28 equities of the preceding week. Fifty-four equities depreciated in prices higher than 44 equities of the preceding week, while 118 equities remained unchanged lower than 128 recorded in the preceding week.

The top 10 gainers  were: NNFM Plc (N2.10), Premier Breweries Plc (N1.09), ETI Plc (96 kobo), Union Bank Plc (46 kobo), UPDC Real Estate Investment Trust Plc (43 kobo),  Fidson Healthcare Plc (36 kobo),  Ikeja Hotel Plc (23 kobo), R.T. Briscoe Plc (13 kobo), May & Baker Plc (11 kobo), and  McNichols (seven kobo).
Conversely, top 10 losers included: Cadbury Nigeria Plc (N4.77), Conoil Plc (N4.05), Oando Plc (N1.60), Dangote Sugar Plc (59 kobo), Access Bank Plc (57 kobo ), Caverton Plc (32 kobo), Vono Plc (18 kobo), Cornerstone Insurance Plc, WAPIC Insurance, and  Wema Bank Plc (6 kobo apiece).

 

 

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