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Equities Market sheds N252bn on profit taking

By on August 18, 2015

The Nigerian equities market shed N252 billion last week as some investors took profit following the previous week’s  positive run on the Nigerian bourse.  in a major reversal of fortune, the  market had in the previous week  returned to positive territory with the Nigerian Stock Exchange (NSE) All-Share Index (ASI) chalking up 4.18 per cent.

However, half of the gains was eroded last week on profit taking as some investors rushed to lock in part of the profits recorded two weeks ago. Consequently, the market capitalisation went down by N200 billion, falling from n10.7 trillion to N10.5 trillion. Similarly, the NSE ASI fell by 2.34 per cent to close at 30,705.62.

Profit taking was more pronounced in the Financial Services and Consumer Goods sectors – same sectors that lifted the previous week. With a negative close last week, the Nigerian market had recorded its ninth week-on-week decline out of the eleven weeks so in the year. Also, the decline took the year-to-date return to 11.40 per cent, and month-to-date gain to 1.74 per cent.  Apart from the ASI that shed 2.34 per cent, the other indices finished lower with the exception of the NSE Industrial Goods Index that closed positively with a 0.11 per cent. The Banking index had the worst performance, shedding   5.2 per cent decline, compared with a gain of 4.55 per cent the previous week. The NSE Consumer Goods Index followed with a decline of 2.74 per cent caused by sell-offs in Dangote Flour Plc, PZ Cussons Plc and Flour Mills of Nigeria Plc. The NSE Oil/Gas Index went down by 1.11 per cent, just as NSE Insurance Index shed 0.64 per cent.

Market Turnover

Meanwhile, the volume of trading also went down last with as investors traded 1.357 billion shares worth N12.475 billion in 17,867 deals, down from 2.382 billion shares valued at N18.989 billion that exchanged hands last week in 19,769 deals.

However, the Financial Services Industry  remained the most active, leading with  1.144 billion shares valued at N7.357 billion traded in 10,830 deals; thus contributing 84.34 per cent and 58.98 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with a turnover of 53.776 million shares worth N218.675 million in 873 deals. The third place was occupied by the Consumer Goods Industry with 42.577 million shares worth N2.394 billion in 2,586 deals.

Trading in the top three equities namely – Standard Alliance Insurance Plc, Access Bank Plc, and Zenith International Bank Plc   accounted for 566.664 million shares worth N3.393 billion in 2,767 deals, contributing 41.77 per cent  and 27.20 per cent  to the total equity turnover volume and value  in that order.

Also traded during the week were a total of 55,201 units of Exchange
Traded Products (ETPs) valued at N2.905 million executed in 30 deals compared with a total of 6,639 units valued at N999,551.05 transacted last week in 22 deals.

Gainers/losers

At the close of trading last week, 16 equities appreciated down from 37 equities of the preceding week. Conversely, 58 equities depreciated in price, compared with 29 equities of the preceding week, while 116 equities remained unchanged.

Evans Medical Plc led the price gainers, rising by 22 per cent, trailed by Portland Paints and Products Nigeria Plc, which went up by 9.8 per cent. CAP Plc chalked up 8.8 per cent, just as Unilever Nigeria Plc added 8.4 per cent. Other top gainers included: Honeywell Flour Mills Plc (7.1 per cent); Total Nigeria Plc (5.3 per cent); Roads Nigeria Plc (4.9 per cent); AIICO Insurance Plc (3.4 per cent); Forte Oil Plc (3.3 per cent) and Presco Plc (3.2 per cent).

On the contrary, United Bank for Africa Plc led the price losers with 18.5 per cent, trailed by Eterna Plc with a decline of 13.6 per cent. Red Star Express Plc fell by 13 per cent. Other top price losers were: Fidelity Bank Plc (12.9 per cent); Vono Products Plc (12.4 per cent); NPF Microfinance Bank Plc, Skye Bank Plc( 10 per cent apiece); Champion Breweries Plc (9.8 per cent) and Conoil Plc (9.7 per cent.

SEC Restructures

During the week under review, the apex regulator of the Nigerian capital market reported a major restructuring of its operations aimed at boosting staff morale and improving service delivery to all stakeholders. The restructuring entails both a review of the organisational structure as well as a voluntary retirement scheme to trim down the previously top-heavy ranking structure.

Three Zonal Offices
Contrary to the previous organisational structure, the SEC operated with a head office in Abuja and seven zonal offices in Kaduna, Kano, Ibadan, Lagos, Maiduguri, Onitsha and Port Harcourt, the commission  has closed down its zonal offices in Kaduna, Ibadan, Maiduguri and Onitsha in order to allocate both human and material resources to strengthen the remaining  three in Kano, Lagos and Port Harcourt.

According to the commission, initially, the zonal offices were ostensibly created to bring SEC operations closer to the investing public both in terms of complaints resolution and investor education.

“The review however showed that the commission could accomplish these objectives more efficiently by leveraging technology and shifting resources to the use of both print and electronic media for public enlightenment. Additionally, the new complaints management framework being championed by the Commission will delegate first stages of complaints management to the operators and trade groups. This implies that less and less complaints will be handled by the SEC, further reducing the need for multiple zonal offices. With the three zonal offices to be maintained, SEC will still enjoy a balanced geopolitical spread as the Lagos zonal office covers the entire southwest geopolitical zone, the Port Harcourt office will service the south-south and southeast zone while the office in Kano will cater to investors across the northern region. In essence, by closing the four  zonal offices and strengthening the remaining  three, SEC can do more at a lower cost, this will free up resources to be allocated to critical areas of the Commission’s mandate like investor protection and investor education,” the commission said.

Enabling Career Progress
Another aspect of the structural reform of SEC a review of the  composition of staff  structure. According to the commission, it had been operating at an unsustainably top-heavy structure with a lot more senior level staff and junior level ones.
“For example, as at January 2015, there were over 30 Deputy Directors,

more than 40 Assistant Directors and upward of 80 Senior Managers. This issue had direct effect on staff morale as well as motivation because it inhibited career progression. To address this situation, the SEC Board approved a voluntary retirement scheme proposed by the executive management to incentivize top-level staff above the age of 45 who had served the Commission for more than 10 years and a nearing their retirement to voluntarily retire. Through this exercise, at the end of July 2015, 43 very senior staff exited the Commission, some of whom had served for more than 20 years and had stagnated for up to 11 years on the same position due to the non-availability of vacancies. They were therefore delighted to take the offer that allows them retire to focus on other endeavors they care about,” SEC said.

Leveraging Technology
Also, in line with our strategic directive to boost market efficiency and align with best practice, the Commission embarked on the process of auditing the industry information technology infrastructure. This, SEC said, is in a bid to ascertain the current status of automation in the market, articulate the appropriate level required, and invest in the required resources that will aid market automation, improve transparency and efficiency and indeed boost market competitiveness.
“To achieve the foregoing, the commission is currently overhauling and benchmarking its infrastructure requirements with jurisdictions such as India, Malaysia, South Africa and the United States of America. We are also in discussions with relevant service providers from these jurisdictions for the purposes of full scale implementation. This far-reaching restructuring underway at the SEC is repositioning the institution to focus on the strategic objective of faithfully implementing the 10-year capital market master plan developed by the market. The institution is now a lot more nimble and refocused on its core mandates,” it said.

 

[ThisDay]