Wednesday, January 4, 2016 3:55 PM/Scottfree Markets
Monthly overview of the Nigerian financial markets as reflected through SF Markets equity and fixed income indices. SF Markets is a provider of innovative benchmark and tradable indices focused on the Sub-Saharan African region.
Equity: December Highlights
· Apart from the Small Cap and Micro Cap Indices, all other (NGN) equity indices had positive returns for the month of December. The best performing index for the month was the SFNG Mid Cap 40 Index, which returned 5.98% compared to -8.84% in November.
· Volatility for the SFNG Blue-Chip 30 Index (Large Cap stocks) in December was at 10.56% (up from 9.68% in November).
· Currency Indices: The SFNG Blue-Chip 30 Index (USD) was up 4.82% while the SFNG Blue-Chip Index (EUR) was up 9.52% for the month of December.
· The SFNG Total Share Index (representing 99.5% of the Nigerian equity market) had a 6.66% increase in total market capitalisation from NGN 8.64trn (November) to NGN 9.21trn (December) while the free-float market capitalisation for the index increased by 4.59% from NGN 3.24trn (November) to NGN 3.39trn (December).
· Using the 6 month Average Daily Traded Value (ADTV) measure, liquidity for the SFNG Total Share Index in December came in at NGN 2.13bn (a decrease from the NGN 2.32bn recorded in November).
· In December, 1 company in the SFNG Total Share Index had a dividend go ex, compared to 3 companies in November. The dividend yield for the index in December came in at 6.22% compared to 5.99% in November. In addition, there were also 5 deletions from the SFNG Total Share Index during the month of December as depicted in the table below:
· The best performing sector in the SFNG Total Share Index for the month of December was Oil & Gas (16.28%) while the worst performing sector was Technology (-1.06%).
· Barring the Technology, Consumer Basics and Consumer Optional sectors, all other sectors in the SFNG Total Share Index had positive returns for the month of December.
Top 5 Performers
Worst 5 Performers
· The best performing stock in the SFNG Total Share Index for the month of December was Forte Oil Plc (57.20%) while the worst performing stock was Unilever Nigeria Plc (-27.08%).
SFNG Equity Index December Quarterly Review Changes: Shares & Free float Changes + Fast Entry & Exit Reviews (Please note that the Fast Entry & Exit Reviews are carried out in June and December i.e. outside of the Semi-Annual review periods in March and September).
· 1 company had a share change while 9 companies had free float changes effective 19.12.2016.
· Fast Entry: 7-UP Bottling Company (NG7UP0000004) was promoted from the SFNG Mid Cap 40 Index to the SFNG Blue-Chip 30 Index and Standard Alliance Insurance PLC (NGSTDINSURE7) was promoted from the SFNG Small Cap Index to the SFNG Mid Cap 40 Index. Both companies ranked above the review buffer zones as of the cutoff date.
· Fast Exit: Dangote Flour Mills PLC (NGDANGFLOUR2) was demoted from the SFNG Blue-Chip 30 Index to the SFNG Mid Cap 40 Index and Multi-Trex Integrated Foods PLC (NGMULTITREX0) was demoted from the SFNG Mid Cap 40 Index to the SFNG Small Cap Index. Both companies ranked below the review buffer zones as of the cutoff date.
Fixed Income: December Highlights
· The Alpha Bond Index returned 1.86% in December while the Alpha Bond Index (USD) returned 1.85%.
· Volatility for the Alpha Bond Index in December was at 3.51% (down from the 5.02% recorded in November).
· The market value of the Alpha Bond Index increased by 1.97% from NGN 5.27trn in November to NGN 5.36trn in December. The market value of the index represents 5.70% of Nigeria’s GDP.
· For the month of December, the Alpha Bond Index had an Average Weighted Coupon of 13.24% (13.26% in November) and an Average Weighted Maturity of 8.93 years (8.91 years in November).
· In December, the Average Weighted Coupon rate of the Alpha Bond Index came in at 0.72 points (i.e. 28%) below Nigeria’s inflation rate and 0.95 points (i.e.5%) below Nigeria’s interest rate.
· The Yield to Maturity of the index decreased from 16.09% in November to 16.02% in December.
· One bond in the Alpha Bond Index had a coupon payment in December.