Investment analysts have said that activities in the nation’s stock market will be bullish this week over positioning by investors in interim dividend stocks.
They posited that the market provides ample opportunity for capital gains but advised investors to position in only fundamentally sound stocks. According to analysts at Cowry Assets Management Limited, in the new week, we expect the equities market index to trade positively as investors position ahead of qualification period for interim dividend payment.
Also, Cordros Securities Limited said that, “This week, we expect earnings from the big banks, specifically Guaranty Trust Bank Holding Company (GTCO) and United Bank for Africa (UBA) to drive buying sentiments on the bourse, as the declaration of interim dividends may likely accompany the results.
“Overall, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”
The chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion said that “We expect a mixed trend as market players take advantage of the correction to position as many stocks enter their buy range to attract funds into the equity space, just as institutional investors and others digest the second quarter (Q2) GDP growth ahead of more first-tier banks results, as well as the continued repositioning of portfolios for the year last quarter.”
Omordion also noted that investors are still observing the interplay of forces in the FX market as the Central Bank of Nigeria (CBN) gives a guideline for the new digital currency platform. The day’s low volume suggests that institutional investors and others are still cautiously looking at the numbers. It is noteworthy that oil prices rebounded in the international market; corporate actions, as well as the interim dividend possibilities, are around the corner.
Meanwhile, last week, bearish sentiments dominated the market with the local bourse recording losses in three of the five trading sessions of the week, following sell-offs of large cap stocks including Nigerian Breweries, Dangote Cement and Zenith Bank.
Consequently, the All-Share Index (ASI) shed 224.64 points or 0.57 per cent week-on-week (W-o-W) to close at 39,261.01 points. Similarly, market capitalisation decreased by N117 billion to close at N20.456 trillion.
Specifically, the release of the positive first half (H1) 2021 financial result and the 30 kobo interim dividend declared by Access Bank appears not to have stimulated investor’s interest as banking sector index closed in red, decreasing by 0.58 per cent to 376.79 points.
The NSE Oil & Gas, NSE Consumer Goods and the NSE Industrial indices plummeted by 2.96 per cent, 1.34 per cent and 0.08 per cent to 378.99 points, 190.07 points and 1,976.72 points respectively. On the other side, the NSE Insurance index closed in the green with a gain of 0.79 per cent to 191.58 points.
Market breadth for the week closed negative as 26 equities appreciated in price, 36 equities depreciated in price, while 94 equities remained unchanged. Transcorp Hotels led the gainers table by 10 per cent to close at N5.17, per share. Skyway Aviation Handling Company followed with a gain of 9.46 per cent to close at N4.05, while Presco went up by 8.90 per cent to close to N79.50, per share.
On the other side, Oando led the decliners table by 15.21 per cent to close at N4.07, per share. Mutual Benefits Assurance followed with a loss of 12.50 per cent to close at 28 kobo and Courteville Business Solutions declined by 12.12 per cent to close at 29 kobo, per share.
Overall, a total turnover of 1.338 billion shares worth N8.650 billion in 19,830 deals were traded last week by investors on the floor of the Exchange, in contrast to a total of 1.026 billion shares valued at N8.183 billion that exchanged hands last week in 18,102 deals.
The Financial Services Industry (measured by volume) led the activity chart with 615.594 million shares valued at N4.188 billion traded in 9,021 deals; contributing 45.99 per cent and 48.42 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 253.392 million shares worth N280.789 million in 1,126 deals, while Consumer Goods traded a turnover of 185.854 million shares worth N1.593 billion in 4,107 deals.
Trading in the top three equities; Transnational Corporation of Nigeria (Transcorp), Honeywell Flour Mill and Access Bank accounted for 450.570 million shares worth N1.492 billion in 3,696 deals, contributing 33.66 per cent and 17.25 per cent to the total equity turnover volume and value respectively.
On Exchange Traded Products (ETPs) platform, a total of 54,468 units valued at N2.603 million were traded last week in 19 deals compared with a total of 39,465 units valued at N1.834 million transacted previous week in 27 deals, while on the Bond market, a total of 100,152 units valued at N99.670 million were traded last week in 27 deals compared with a total of 26,861 units valued at N27.503 million transacted prior week in 17 deals.