Capital market analysts have predicted mixed performance for equities this week on interim dividend expectation and portfolio rebalancing on bargain hunting as players interpret macroeconomic data and impressive half-year results.
Analysts Optimism
Going into the new week, analysts at Cowry Assets Management Limited, expected “trading activities to end the week positively mild as portfolio rebalancing activities take the center stage resulting from the non-existence of a catalyst to drive activities as we head into the final month of the third quarter.
“Thus, we expect the bulls and bears to share the market leadership. However, we continue to advise investors to trade on companies’ stocks with sound fundamentals and a positive outlook.”
Cordros Securities Limited said: “we expect alpha-seeking investors to rotate their portfolios towards cyclical stocks that delivered decent earnings during the second quarter (Q2), 2022 earnings season amid the yield uptick in the FI market. However, we think the absence of a near-term catalyst will likely skew overall market sentiments to the negative side, particularly as the political space gets heated. Notwithstanding, we reiterate the need for positioning in only fundamentally sound stocks as the unimpressive macro environment remains a significant headwind for corporate earnings.”
Afrinvest Limited added that “in the absence of any positive catalyst, we expect the market performance to remain depressed next week, due to rising yield in the fixed income market.”
Last Week’s Trading Activities
Performance of the equities market in the just concluded week was downbeat as intense bargain hunting activities and bearish sentiments drove the market down.
The bears resurfaced on the domestic bourse as the benchmark index recorded declines in three of the five trading sessions. Accordingly, the All-Share index dipped by 350.71 points or 0.71 per cent week-on-week (W-o-W) to close at 49,695.12 points. Similarly, market capitalisation shed N189 billion W-o-W to close at N26.805 trillion.
Particularly, profit-taking activities witnessed in Zenith Bank, Stanbic IBTC Holdings, Airtel Africa and FBN Holdings (FBNH) drove the weekly loss.
Also, the sectoral performance was mixed as the Insurance index gained by 1.04 per cent W-o-W, while Consumer Goods index recorded weekly gain of 0.72 per cent. On the other hand, the Banking index declined by 0.60 per cent, Oil & Gas index shed 0.11 per cent, while Industrial Goods index closed flat.
However, market breadth for the week was negative as 22 equities appreciated in price, 36 equities depreciated in price, while 98 equities remained unchanged. Chams Holding Company led the gainers table by 19.23 per cent to close at 31 kobo, per share. P Z Cussons Nigeria followed with a gain of 12.80 per cent to close at N9.25, while NEM Insurance went up by 11.88 per cent to close to N5.65, per share.
On the other side, Japaul Gold & Ventures led the decliners table by 12.12 per cent to close at 29 kobo, per share. Honeywell Flour Mill followed with a loss of 11.07 per cent to close at N2.25, while Vitafoam Nigeria declined by 9.96 per cent to close at N21.25, per share.
Overall, a total turnover of 949.819 million shares worth N9.329 billion in 18,525 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 1.195 billion shares valued at N12.924 billion that exchanged hands previous week in 19,305 deals.
The Financial Services Industry (measured by volume) led the activity chart with 735.300 million shares valued at N4.133 billion traded in 10,186 deals; contributing 77.41 per cent and 44.30 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 69.775 million shares worth N191.041 million in 570 deals, while the ICT Industry pulled a transaction of 44.439 million shares worth N2.875 billion in 1,744 deals.
Trading in the top three equities namely Sterling Bank, United Bank for Africa (UBA) and Transnational Corporation (Transcorp) accounted for 472.701 million shares worth N1.164 billion in 2,333 deals, contributing 49.77 per cent and 12.48 per cent to the total equity turnover volume and value respectively.
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