NSE: Oil stocks moves market to a marginal increase

The Nigerian equities market sustained a positive outing for the second consecutive week as the benchmark index rose 0.3 per cent Week on Week (WoW) to settle at 25,817.69 points.

The All Share Index (ASI) recorded marginal gains on all trading days of the week except for Tuesday when the ASI dipped 0.3 per cent on account of profit taking of some companies.

However, overall performance was largely driven by significant interest in Forte Oil PLC with 62.8 per cent increase in its share value which touched a record low in the previous week,  as well as price appreciation in Total PLC at  10.1 per cent appreciation.

Zenith Bank Plc and Nigerian Breweries Plc also contributed to a positive week with 3.3 per cent and 1.4 per cent respective increase in share worth.

Consequently, the YTD loss eased to -9.9 per cent while market capitalization improved by N28.1 billion WoW to settle at N8.8 trillion. Activity level was mixed as average volume traded fell 63.9 per cent and value traded rose 6.4 per cent to 178.9 million units and N2.1 billon.

Performance across sectors remained mixed with the Oil & Gas index appreciating the most, up 7.7 per cent on the back of sustained interest in Forte Oil PLC  and Total Nigeria Plc.

The Banking index followed, adding 0.5 per cent WoW due to  gains in First Bank Nigeria Holdings PLC at  10.8 per cent and Fidelity Bank Plc at 8.9 per cent. In the same vein, the Insurance index rose 0.4 per cent consequent on price appreciation in NEM Insurance Plc  at +5.4 per cent and Continental Insurance Plc at +3.1 per cent.

On the flip side, the Industrial Goods index topped losers’ chart, down 3.3 per cent due to loses in WAPCO at -9.1 per cent while declines in Nestle Nigeria PLC, -1.2 per cent and Guinness Nigeria PLC at -12.5 per cent dragged the Consumer Goods index 0.8 per cent lower.

Market breadth slightly waned to 0.8 (from 0.9x in the previous week) on account of 27 advancing stocks against 36 declining stocks. The best performers were FORTE, PORTPAINT (+26.5 per cent) and TRANSCORP (+19.7 per cent) while the worst performers included GUINNESS (-12.5 per cent), NEIMETH (-9.1 per cent) and AVONCROWN (-9.1 per cent).

The sentiment in the local bourse during the week was mainly driven by bargain hunting, particularly in stocks like FORTE and PORTPAINT which has rallied significantly in the last few trading sessions.

Analyst however expect performance in the week ahead to follow a similar trend with marginal gains recorded at the end of the week as the companies prepare for the end of the year and the beginning of a new trading year.

Stanbic IBTC links custody services to economic developmentStanbic IBTC Nominees Limited, the custody subsidiary of Stanbic IBTC Bank PLC, in its bid to facilitate the building of a more robust market for custody services in Nigeria to support economic growth organised a forum aimed at deepening development of the local capital market and enhancing investor appetite for market securities in the country.

A custodian is a financial institution that holds clients’ securities for safekeeping in order to minimize the risk of their theft or loss. Among such clients’ assets include securities such as share certificates, bonds, stocks and treasury bills.

Custody services are available to a wide portfolio of clients, including unit trust schemes, pension funds, corporate clients, high networth individuals, financial institutions, foreign, local and individual investors, insurance funds, fund managers, brokers, and dealers.

The session, which was held in Lagos had in attendance local investors, fund managers, capital market players, regulators, policymakers, bankers and other stakeholders from the private and public sectors.

Deputy Chief Executive, Stanbic IBTC Bank, Dr Demola Sogunle, said the aim of the session was to examine contemporary issues in custody services and also to highlight the role of custodianship as a critical component in the capital market value chain. However, the level of awareness on how to harness the benefits of custodianship remains low in Nigeria.

“The need for excellent custody services in Nigeria remains strong. This is particularly driven by the impetus in cross-border investment activities, which we are well-positioned to provide. As the leading non-pension custodial firm in Nigeria, Stanbic IBTC provides a steady guide for clients in having the confidence that their assets under the custody of Stanbic IBTC are well-protected,” Sogunle stated.

He remarked that aligning Nigeria with the rest of the world in money market and fixed income securities was a major factor that led to the appointment of custodians by the Central Bank of Nigeria, adding that the adoption of international best practices will enhance transparency in money market operations in the country and cause an attendant lift in investors’ confidence, which will in turn enhance growth of the financial services industry. “Stanbic IBTC will continue to help financial services in Nigeria become even more sophisticated and robust to attract further investments into the country,” he added.

Executive Director, Capital Markets, Nigerian Stock Exchange, Mr HarunaJalo-Waziri, who commended Stanbic IBTC for organizing the event, said it needs to be emphasized that the capital market is an enabler of wealth creation, which is vital for sustainable economic growth. He highlighted several initiatives introduced by the Exchange to develop and deepen the Nigerian capital market.

Chief Executive, Stanbic IBTC Nominees Limited, Mr Akeem Oyewale, said the imperative of placing assets under custodianship cannot be over-emphasized.

“It is in recognition of the vital role of custodians in protecting clients’ assets that regulators such as the Central Bank of Nigeria (CBN) have regulations that ensures that non-proprietary assets of banks are kept with duly licensed custodians, whilst the National Pension Commission (PenCom) also ensures that pension assets are kept with licensed Pension Fund Custodians (PFCs) in line with the Pension Reforms Act. The insurance industry regulator has also directed insurance assets to be kept with custodians. All these efforts are designed to protect investors’ funds and boost confidence in the system,” ha said.

Oyewale said advances in technology have enabled custodians to expand product solutions well beyond their traditional roles of settlement and safekeeping to reporting on and monitoring fund investment portfolios, which is consistent with increasing demands on corporate governance, as well as the increased accountability expected of fund managers and/or trustees.

Stanbic IBTCNominees Limited, he said, would not rest on its oars in delivering value to customers as well as prospects.

“The company, which holds custodial assets on behalf of clients of Stanbic IBTC Bank, will continue to leverage the expertise, technology and experience of the Standard Bank Group, to which Stanbic IBTC belongs, to deliver sustainable shareholder value to its clientele. Standard Bank is itself the largest banking group and sub-custodian in the African continent, with assets under custody in excess of $300 billion.

Through its banking subsidiaries, Standard Bank currently provides custody services in South Africa, Nigeria, Kenya, Ghana, Namibia, Botswana, Swaziland, Zambia, Zimbabwe, Uganda, Mauritius and Malawi. That gives Standard Bank the largest footprint, by far, in the African continent among service providers in sub-custody business.