NSEASI inches up marginally by 0.03% amid negative market breadth

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Nigerian stock market closed on a positive note yesterday, as NSEASI appreciated by +0.03% to close at 32,152.90 basis points as against -0.18% depreciation recorded previously. Its Year-to-Date (YTD) returns currently stands at -15.93%.

Market breadth closed negative as Unity Bank led 16 Gainers as against 26 Losers topped by C.I. Leasing at the end of yesterday’s session- an Unimproved performance when compared with previous outlook.

Market turnover closes positive as volume moved up by +181.30% as against +17.19% uptick recorded in the previous session. Ikeja Hotel, FBNH and Diamond Bank were the most active to boost market turnover. Ikeja Hotel and Nestle topped market value list.

Unity Bank leads the list of active stocks that recorded impressive volume spike at the end of yesterday’s session.

The low volume of trading activities on the Nigerian Stock Exchange continued on Monday, following which the benchmark indicators again closed lower.

The benchmark index started the week marginally on the upside in the morning session, after which it oscillated through the mid-morning till midday as equities that had suffered heavy losses, hitting 52-week lows, staged a rebound. This was helped by their seemingly low price attractions, before witnessing a pullback by the afternoon, after touching intraday highs of 32,218.71 basis points, from a low of 32,123.14bps. There was however a retracement up in the last minutes to close the day at 32,143.41bps on a slightly improved volume.

The rumour of a planned acquisition of Diamond Bank Plc, by Access Bank, a peer, triggered selloffs in banking sector stocks, following which NSE Banking index shed 1.03%. Note that some second-tier banking stocks continue to witness sell pressure since the announcement by the Central Bank of Nigeria (CBN) noted in its half-year report published recently that three commercial banks have liquidity ratios below the 30% regulatory minimum. This is also despite the drop in the non-performing loans (NPL) ratios of bank from the previous 14.75%, to 12.45%, which we note is still very high, compared to 5% threshold set by the apex bank.

The huge NPL ratios of some of these second tier banks have negatively affected their bottom-lines, leading to a possible non-payment of dividend to investors by year-end. The recent financials of these banks show their health status, looking at loans, deposits, net assets, retained earnings and other pointers.

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