Analysts have anticipated the Nigerian stock market dynamics for the new week to include a mix of sentiments, profit-taking activities as the market remains short of positive catalysts.
The stock market has experienced notable profit-taking activities and sell-offs, particularly across some mid and large-cap stocks. This downturn further depressed the benchmark index, with high trading volumes and negative market internals highlighting both the market’s weakness. This trend unfolded as market participants continued to react to the positive outcome of the last treasury bills and FGN bonds auctions which recorded healthy subscriptions.
Analysts Optimism
Analysts at Cowry Assets Management Limited said, “the NGX index’s current position below the T-line, along with the 50-day Exponential Moving Average (EMA) and 50-day Simple Moving Average (SMA), signals underlying weakness in the market.
“This alignment of technical indicators reflects a broader caution, suggesting that the market is struggling amid evolving fundamentals and technical conditions. The breach of these key moving averages often points to a potential downtrend, indicating that market sentiment remains bearish for the time being.”
The firm noted that, “meanwhile, transaction volume patterns and support levels are signalling further buying opportunities, even as market participants look ahead to the forthcoming release of the Q2 2024 GDP report, along with audited half-year earnings and interim dividend declarations.”
Cowry Research anticipated “a mixed performance in the coming week, driven by ongoing portfolio rebalancing and profit-taking activities. Nevertheless, we continue to advise investors to focus on fundamentally sound stocks.”
On market outlook, the chief operating officer of InvestData Consulting Limited, Ambrose Omordion said that “we expect mixed sentiment to continue on bargain hunting, profit taking and sector rotation amidst an oversold region. Portfolios repositioning is however continuing, as investors take advantage of pullbacks to buy into value.
“This is amid the volatility and pullbacks that add more strength to upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.”
Last Week’s Trading Activities
The market last week experienced a bearish trend, with three out of five trading sessions closing in the red.
The All-Share Index (ASI), fell by 1.16 per cent on a week-on-week basis to close at 95,973.45 points. This decline was primarily driven by pressured sell-offs in the consumer goods and industrial goods sectors, a reflection of the ongoing interplay of market dynamics amidst heightened volatility. Additionally, the market capitalisation declined by N2 billion to close the week at N55.129 trillion.
In terms of sectoral performance, the picture was largely positive, as NGX Oil & Gas led the gainers for the week by 3.54 per cent. NGX Insurance index followed with a weekly gain of 1.90 per cent, while NGX Banking index rose by 0.37 per cent W-o-W.
On the other hand, the NGX Industrial Goods and NGX Consumer Goods indices retreated by 4.94 per cent and 1.42 per cent week-on-week respectively,
The market breadth for the week was positive as 43 equities appreciated in price, 34 equities depreciated in price, while 74 equities remained unchanged. R T Briscoe led the gainers table by 59.41 per cent to close at N2.71, per share. Tantalizers followed with a gain of 54.55 per cent to close at 68 kobo, while Oando went up by 33.47 per cent to close to N47.85, per share.
Similarly, Cutix led the decliners table by 37.37 per cent to close at N3.10, per share. Dangote Cement followed with a loss of 10.00 per cent to close at N532.00, while The Initiates Plc (TIP) declined by 9.78 per cent to close at N2.03, per share.
Overall, a total turnover of 5.641 billion shares worth N33.052 billion in 42,006 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.033 billion shares valued at N42.155 billion that exchanged hands previous week in 45,157 deals.
The Financial Services Industry (measured by volume) led the activity chart with 4.977 billion shares valued at N17.877 billion traded in 19,064 deals; contributing 88.22 per cent and 54.09 per cent to the total equity turnover volume and value respectively.
The Oil and Gas Industry followed with 179.469 million shares worth N8.954 billion in 5,780 deals, while the Services Industry, with a turnover of 123.505 million shares worth N525.417 million in 2,436 deals.
Trading in the top three equities; Standard Insurance, Jaiz Bank and Guaranty Trust Holdings Company accounted for 3.951 billion shares worth N7,947 billion in 1,839 deals, contributing 70.04 per cent and 24.04 per cent to the total equity turnover volume and value respectively.
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