Friday, July 01, 2016 02:26 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: June Highlights
· Apart from the Small Cap Index, all other (NGN) equity indices had positive returns for the month of June. Once again, the best performing index was the SFNG Blue-Chip 30 Index, which returned 5.93% compared to 16.36% in May.
· Volatility for the SFNG Blue-Chip 30 Index (Large Cap stocks) in June was at 40.61% (up from 33.76% in May).
· Currency Indices: With Nigeria now adopting a floating exchange rate as of 20.06.2016, the SFNG Equity indices calculated in US Dollars & Euros have since plummeted. The SFNG Blue-Chip 30 Index (USD) was down 25.30% while the SFNG Blue-Chip Index (EUR) was down 25.19% for the month of June.
· The SFNG Total Share Index (representing 99.5% of the Nigerian equity market) had a 7% increase in total market capitalisation from NGN 9.47trn (May) to NGN 10.13trn (June) while the free-float market capitalisation for the index increased by 4.28% from NGN 3.51trn (May) to NGN 3.66trn (June).
· Using the 6 month Average Daily Traded Value (ADTV) measure, liquidity for the SFNG Total Share Index in June came in at NGN 2.23bn (an increase from the NGN 2.08bn recorded in May).
· In June, 7 companies in the SFNG Total Share Index had dividends go ex, compared to 12 companies in May. The dividend yield for the index in June came in at 5.54% compared to 4.98% in May. In addition, there were two corporate actions i.e. bonus issues for Fortis Microfinance PLC and Lafarge Africa PLC effective during the month of June.
(TRBC is provided by Thomson Reuters)
· The best performing sector in the SFNG Total Share Index for the month of June was Basic Materials (10.74%) while the worst performing sector was Energy (-2.65%)
· Barring the Energy and Consumer Cyclicals sectors which both had negative returns, all other sectors in the SFNG Total Share Index were either unchanged or had positive returns for the month of June.
Top 5 Performers
Worst 5 Performers
· The best performing stock in the SFNG Total Share Index for the month of June was Champion Brew PLC (46.55%) while the worst performing stock was Fortis Microfinance Bank PLC (-49.90%)
SFNG Equity Index Quarterly Review Changes: Shares & Free float Changes + Fast Entry & Exit Review (Please note that the Fast Entry & Exit Review are carried out in June and December i.e. outside the Semi-Annual review periods in March and September.
· 36 companies had free float changes effective 20.06.2016.
· Fast Entry: Mrs Oil Nigeria PLC was promoted from the SFNG Small Cap Index to the SFNG Mid-Cap 40 Index as it ranked above the review buffer zone as of the cutoff date.
· Fast Exit: Mutual Benefits Assurance PLC was demoted from the SFNG Mid-Cap 40 Index to the SFNG Small Cap Index as it ranked below the review buffer zone as of the cutoff date.
Fixed Income: June Highlights
Fixed Income: June Highlights
· The Alpha Bond Index returned -2.22% in June while the Alpha Bond Index (USD) returned -31.17%.
· Volatility for the Alpha Bond Index in June was at 9.21% (down from the 12.22% recorded in May).
· The market value of the Alpha Bond Index decreased by 11.15% from NGN 5.532trn in May to NGN 4.915trn in June. The market value of the index represents 4.32% of Nigeria’s GDP.
· For the month of June, the Alpha Bond Index had an Average Weighted Coupon of 13.23% (13.39% in May) and an Average Weighted Maturity of 9.05 years (8.46 years in May).
· In June, the Average Weighted Coupon rate of the Alpha Bond Index came in at 0.85 points (i.e. 15%) below Nigeria’s inflation rate and 1.10 points (i.e.10%) above Nigeria’s interest rate.
· The Yield to Maturity of the index increased from 13.53% in May to 14.26% in June.
· Only one bond in the Alpha Bond Index had a coupon payment in June.
· There was one deletion from the Alpha Bond Index in June i.e. the 15.10 FGN 27-APR-2017, decreasing the component number of the index to 11. The bond was deleted due to it’s Time to Maturity falling below one year.
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