The Nigerian capital market expected equities to maintained previous week gain as retail investors increased their holdings in dividend paying stocks ahead of 2021 full year declarations.
In the new week, analysts at Cowry Assets Management Limited expected the local bourse index to trade sideways as investors wait on the sidelines to take advantage of declining stock prices. We expect more sales from retail investors than the institutional investors as yuletide season beckons.
Also, Cordros Securities stated that, “in the week ahead, we expect market performance to be dominated by the bulls, as positioning by early birds in dividend-paying stocks ahead of 2021 full year dividend declarations should outweigh profit-taking activities.
“We reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.”
While analysts from Afrinvest Limited said: “this week, we expect the market to extend previous week’s positive performance on improved sentiment, barring any negative shock.”
The chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion said: “we expect a mixed trend to continue, as players digest the outcome of the latest Monetary Policy Committee meeting (MPC), ahead of Treasury Bills primary market auctions, with seasonality and cycles likely to influence equity prices ahead of year-end window dressing.
“The low volume traded in the midst of pullbacks is creating new buy opportunities on the strength of the third quarter (Q3) numbers. Also, candlestick formation and volume traded during the session revealed that institutional players are not selling but positioning in blue-chip companies, as the index slide on a light volume.”
According to him, it is equally noteworthy that during a ranging market many players seat on the fence waiting for a breakout or down before jumping into any position. Even as many stocks are trading within their buy ranges, a situation expected to attract more funds into the stock market, given the dividend yield capable of serving as a hedge against inflation.
Last Week’s Trading Activities
Last week, the Nigerian equities market closed positive amid renewed buy sentiment, especially on Telecoms stocks even as MTN International Mauritius offered for sale up to 575 million shares of its shareholding in MTN Nigeria Communications (MTNN) Plc to high-net-worth investors in Nigeria.
Hence, the NGX All-Share Index rose week-on-week (W-o-W) by 109.02 points or 0.25 per cent to close at 43,308.29 points. Similarly, market capitalisation grew N54 billion W-o-W to close at N22.598 trillion.
Reflective of non-broad-based performance of the benchmark index, most sector gauges closed in red. The NGX Banking, NGX Consumer Goods, NGX Oil & Gas and the NGX Industrial indices plummeted by 0.29 per cent, 2.00 per cent, 0.87 per cent and 0.03 per cent to close at 390.48 points, 549.62 points, 364.84 points and 2,193.80 points respectively. However, the NGX Insurance rose by 3.56 per cent to close at 183.058 points.
The market breadth for the week was negative as 29 equities appreciated in price, 36 equities depreciated in price, while 91 equities remained unchanged. University Press led the gainers table by 27.83 per cent to close at N2.94, per share. Ikeja Hotel followed with a gain of 17.39 per cent to close at N1.35, while Honeywell Flour Mill went up by 16.81 per cent to close to N3.96, per share.
On the other side, UACN Property Development Company Plc (UPDC) led the decliners table by 14.94 per cent to close at N1.31, per share. Cutix Plc followed with a loss of 14.02 per cent to close at N2.76, while MRS Oil Nigeria declined by 9.87 per cent to close at N13.70, per share.
Overall, a total turnover of 3.435 billion shares worth N30.915 billion in 21,109 deals were traded last week by investors on the floor of the Exchange, in contrast to a total of 1.392 billion shares valued at N27.886 billion that exchanged hands last week in 19,990 deals.
The Oil & Gas Services Industry (measured by volume) led the activity chart with 2.014 billion shares valued at N13.448 billion traded in 1,350 deals; contributing 58.63 per cent and 43.50 per cent to the total equity turnover volume and value respectively. The Financial Service Industry followed with 1.052 billion shares worth N10.168 billion in 10,941 deals, while the Consumer Goods Industry traded a turnover of 183.803 million shares worth N4.492 billion in 4,007 deals.
Trading in the top three equities; Oando Plc, FBN Holdings (FBNH) and Guaranty Trust Holding Company (GTCO) accounted for 2.283 billion shares worth N17.395 billion in 3,645 deals, contributing 66.47 per cent and 56.27 per cent to the total equity turnover volume and value respectively.
On Exchange Traded Products (ETPs) platform, a total of 147 units valued at N15,766.78 were traded last week in 7 deals compared with a total of 54,936 units valued at N481,455.15 transacted prior week in 19 deals, while
on the Bond market, a total of 31,275 units valued at N33.596 million were traded last week in 21 deals compared with a total of 65,606 units valued at N68.507 million transacted previous week in 9 deals.