The Nigerian equities market returned to negative mode yesterday as the Nigerian Stock Exchange (NSE) All-Share Index fell by 0.10 percent to close at 26,375.35, after opening on positive note the previous day. There were more price gainers than losers as 17 stocks appreciated as against nine price losers.
However, the losses recorded by bellwethers such as Nestle Nigeria Plc, MTN Nigeria Communications Plc, Guinness Nigeria Plc, and Guaranty Trust Bank Plc made the NSE ASI to close negatively. Market capitalization shed N12.5 billion to close at N12. 8trillion, while the year to date decline worsened to 16.1 percent. Activity level was mixed as volume traded declined 17.4 percent to 304.3 million units while value traded rose 44.2 percent to N4.0 billion.
In all, UACN Property Development Company Plc led the price losers’ chart, falling by 9.3 percent, trailed by Honeywell Flour Mills Plc with 5.7 percent. Nestle Nigeria Plc shed 4.1 percent, just as Guinness Nigeria Plc, May & Baker Nigeria Plc and MTN Nigeria Plc declined by 2.3 percent, 2.0 percent, and 1.2 percent respectively.
However, among the above three price losers, only Guinness Nigeria Plc posted negative financial performance in the last earning season. The brewing firm posted a loss of N370 million for the first quarter ended September 30, 2019.
Details of the unaudited results showed that Guinness Nigeria Plc posted revenue of 26.898 billion in 2019, down from N28 billion in the first quarter of 2018. While the company was able to curtail the marketing/distribution and administrative expenses, net financing cost went up by 117 percent to N1.287 billion in 2019, up from N593 million in 2018. As a result, Guinness ended the Q1 with a loss of N370 million, compared with a profit of N835 million in 2018.
According to analysts at FBN Quest, the combination of higher excise taxes and weaker beer volumes impacted topline, while the interest cost increase was caused by a rise in total borrowings.
“The Q1 loss was significantly behind our profit before tax (PBT) forecast of N2.2 billion. On an annualized basis, the loss also disappointed consensus 2020E forecast of N8.5 billion. As such, we anticipate a negative market reaction,” they said.
Meanwhile, Law Union and Rock Insurance Plc led the price gainers, appreciating by 9.5 percent, trailed by Unity Bank Plc with 9.4 percent, Consolidated Hallmark Insurance Plc added 7.8 percent, while Ecobank Transnational Incorporated chalked up 7.6 percent.