Daily Market Performance: Commentary


Stocks Shed Weight Amid Volume Strength: Nestle, AP and Conoil are Big Losers; Chevron and Oando Still Record Strong Gains ::
>>Friday 04/01/2008


It was a balancing day on the Nigerian Stock Exchange as prices that had paced up for the first two trading days of the year showed some fatigue and a slow-down. Significant losses were picked up by a number of top stocks, with Nestle and AP leading with N10.92 and N9.20 losses respectively. Forty-eight other stocks followed suit, with a sizeable number in high values. CONOIL N3.79, FLOURMILL N3.00, MOBIL N3.00, WAPCO N2.95, BCC N2.67, FIRSTBANK N2.20, GUINNESS N1.99 and UBN N1.90 were other top losers. Though 63 stocks gained in the day's trading, advances were relatively more cautious, causing the All-Share Index to drop 407 points (0.69%). Oando bounced back up from yesterday's decline, picking a N5.95 gain. Chevron was also strong on price, leading the pack with N8.00 appreciation. Overall, the price momentum slowed as the week closed, in spite of sustained turnover volume performance. See all price movements for the day in absolute and relative terms.

Top Volume Trades
Company
Volume (Units)
Value (N)
NIGERINS
102,880,002
593,801,986.64
INTERCONT
66,378,104
2,589,611,886.67
OCEANIC
65,349,095
2,370,354,995.56
STACO
46,054,977
191,681,222.51
NEM
44,820,427
188,467,186.44

Volume turnover rose by 21.54% just as value of transactions was up by 16.75%, indicating sustained buying interest. That volume was again heavily driven by insurance stocks in units and by banking stocks in value, because of the latter's price edge over insurance stocks. While insurance did 407 million units, banking came second with 386 million. Though some of the insurance stocks declined in price in the day's trading, market interest in them has obviously remained sustained.

The building materials sector was decidedly in reverse gear, with all the active stocks shedding weight, but no fundamental weakness can be adduced. Construction sector transaction volumes were typically low, but all the active stocks pulled price gains. With government's expected infrastructure rebuilding effort that should come with the passage of the budget, the construction sector may yet witness a good year. Most other sectors reflected the day's mixed grill price performance but with active trades.

Looking to the coming week, there is no reason to expect sustained price weakness. The market is likely to regain steam as more investors return to business and as positions are taken for the year, especially in anticipation of year-end results of companies that have just closed their financial year. Interest in the insurance sector is also not expected to wane soon. While large-cap, high price stocks are always in the limelight because price gains are often reported in absolute terms, it's also helpful to look closely at the lower-priced stocks which are often off the radar, but some of which quietly log up significant relative price gains.

 

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