The four deposit money banks classified under tier 1 bank including Guarantee Trust Bank plc, United Bank for Africa plc, Access Bank plc, and Zenith International Bank plc, led in the banking index gain of 2.2 percent, in 2016, outperforming other sector indices.
The Banking Index which ended 2015 as the worst performing index rebounded 2.2 percent in 2016. A breakdown of the performance shows that GTB gained 35.9 percent, UBA 33.1 percent, ACCESS +21.0 percent and ZENITH 5.0 percent.
Analysts at Afrinvest Securities limited said this offset weaker appetite towards the Tier-2 segment of the sector.
On the flip side, the Industrial Goods index which outperformed in 2015, led sector losers in 2016 with a Year To Date loss of 26.4 percent against the backdrop of significant losses in WAPCO (-57.7%) and ASHAKACEM (-51.9%) while the Oil & Gas index followed with a YTD loss of 12.3% on the back of declines in FORTE (-74.4%) and OANDO (-20.3%).
Also, selloffs in MANSARD (-37.9%) and AIICO (-30.8%) weighed on the Insurance index which returned -11.4 percent in 2016. Although the Consumer Goods index emerged lone gainer at the close of trade today, the index recorded a YTD loss of 4.5 percent as NESTLE (-5.8%) and Cadbury (-40.0%) dragged the sector index.
However, the local bourse recorded a positive performance on the last trading day of the year as gains in Consumer Goods and Banking large caps – NIGERIAN BREWERIES (+4.2%), GUINNESS (+3.8%) and ACCESS (+1.6%) – lifted the benchmark All Share Index (ASI) by 34bps to close at 26,874.62 points.
Similarly, market capitalization added N31.5bn to end the year at N9.3tn. In line with seasonal trend, December was overwhelmingly positive for equities (ASI gained 6.5%) as fund managers rebalanced their portfolios and oil & gas stocks rallied. These trimmed YTD loss of the ASI to 6.2 percent as the index posted a loss for the third consecutive year on the back of weaker domestic macroeconomic fundamentals and high discount rate which pressured earnings of companies and also weighed on investor sentiment. Trading activities were mostly concentrated on large-cap stocks today as value traded surged 77.2 percent to N1.6 billion while volume traded slid 9.1 percent to 106.3m units.
According to a report by Afrinvest investor sentiment measured by the market breadth rose to 1.4x from 1.2x yesterday as 23 stocks advanced while 16 declined. Top winners for the day were LAWUNION (+8.1%), WEMABANK (+8.0%) and NEM (+5.0%) while FORTE (-9.7%), PORTPAINT (-9.1%) and STERLNBANK (-6.2%) recorded highest losses.
“In line with seasonal trend, December was overwhelmingly positive for equities but we are less optimistic of the market sustaining the positive streak into January as macroeconomic headwinds which dragged performance in 2016 – low FX liquidity, high inflation and interest rates as well as tapered fiscal spending – remain largely in play. Thus, we expect a soft January, while dividend investing ahead of FY: 2016 corporate action releases would usher in a positive spell toward Q2:2017”, the analysts said.