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Stanbic IBTC Market Watch
February 16th, 2009

The Secondary Market

The Nigerian Stock Exchange (NSE) All Share Index (ASI) ended the just-concluded week on yet another bearish note, depreciating by 11.5% to close on Friday at 24,000.09. The daily NSE ASI performance during the week under review is clearly shown in Figure 1. The market capitalisation of the 198 first-tier equities also depreciated, closing at N5.34 trillion as against N6.03 trillion in the previous week. A market turnover of 1.42 billion shares worth N7.84 billion and traded in 37,047 deals was recorded, in contrast to a total of 0.936 million shares valued at N6.8 billion and exchanged in 33,923 deals in the previous week.
As shown in Figure 3 below, the banking sector was the most active during the week (measured by turnover volume), with 655.8 million shares worth N5 billion exchanged by investors in 21,622 deals. The sector’s turnover was driven largely by activity in the shares of Fidelity Bank plc and First City Monument Bank plc. Trading in the shares of the two banks accounted for 256.03 million shares, representing 39.04% of the sector’s turnover.
The conglomerate sector, boosted by activity in the shares of Transnational Corporation of Nigeria plc, followed on the week’s activity chart with a turnover of 252.53 million shares valued at N342.31 million in 1,160 deals.
Two stocks appreciated in price during the week (versus 14 in the previous week). UAC Nigeria plc led on the gainers’ table with a gain of N0.34 to close at N28.99/share, while Omatek Ventures plc followed with a gain of N0.05 to close at N1.26/share. Meanwhile, 111 stocks depreciated in price during the week compared to 76 in the previous week. Mobil Oil Nigeria plc led on the price losers’ table, dropping by N32.38 to close at N73/share, while African Petroleum plc followed with a loss of N28.65 to close at N265.33/share.

Market Outlook

The continued divestment of local institutional investors — pension fund administrators and asset management firms — has been responsible for the decline in stock market activities in the past few weeks. This is as a result of pressure from their clients to invest in other asset classes, such as the fixed income and real estate markets. Although valuations still appear attractive because of impressive corporate results and a decline in share prices, we do not expect any increased activity in the stock market this week. This is due to a continued reduction of portfolio exposure by institutional investors.

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