Financial analysts have anticipated a mixed sentiment trading activity on the Nigerian equities market this week.
The local stock exchange exhibited resilience this past week, characterised by a touch of bullish optimism.
Investors continued their portfolio repositioning activities, with sectoral allocations coming into play ahead of the holidays. This occurred as market participants awaited the upcoming release of the May Consumer Price Inflation report. The positive market breadth supported a pattern reversal from the recent pullback, bolstered by the market’s low valuation.
Also, with banks unfolding their recapitalisation plans to meet the new capital requirement set by the Central Bank of Nigeria (CBN), the sector is witnessing improved volume of trade, buying interest and increased position taking in recent times ahead of the announcement of primary market offer prices. There is also the impact of the second quarter earnings reporting session in July. Guaranty Trust Company joined the list of peers that have notified the investing public of its primary market activities plan.
Analysts Optimism
Looking ahead to the week, analysts at Cowry Asset Management Limited said, “a mixed trend is expected, driven by profit-taking activities. Sector rotation and portfolio rebalancing on the exchange are expected to continue in anticipation of the second half of the year’s window dressing activities and the release of the May 2024 consumer price inflation report.
“As trading volume patterns continue to fluctuate, suggesting buying interest in some sectors and profit-taking in others amidst a wait-and-see attitude among market players, investors are advised to trade in stocks of companies with sound fundamentals.”
The chief operating officer of InvestData Consulting Limited, Ambrose Omordion said, “we expect mixed sentiment to continue in the face of low valuation and portfolios repositioning, dividend investing and reactions to Insurance corporate earnings, while taking advantage of pullbacks to position and rebalancing portfolio.
“This is amid the volatility and pullbacks that add more strength to upside potential. As such, 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 local stock market last week exhibited a bullish trend in three out of four trading sessions as the federal government declared Wednesday 12th June 2024 as Public Holiday to commemorate Democracy’s Day celebration.
The NGX All-Share Index increased by 0.71 per cent week-on-week (W-o-W) to close at 99,925.29 points. Similarly, market capitalisation gained N398 billion W-o-W to close at N56.527 trillion.
Sectoral performance was particularly strong, with the NGX Oil & Gas and NGX Banking indices leading the weekly gainers with increases of 5.28 per cent and 3.63 per cent respectively. Following closely were the NGX Insurance, NGX Consumer Goods, and NGX Industrial Goods indices, which rose by 3.42 per cent, 1.05 per cent, and 0.27 per cent respectively W-o-W.
Market breadth for the week was positive as 51 equities appreciated in price, 24 equities depreciated in price, while 79 equities remained unchanged. Cutix led the gainers table by 28.21 per cent to close at N4.00, per share. Regency Assurance followed with a gain of 23.68 per cent to close at 47 kobo, while Chams Holding Company went up by 23.38 per cent to close to N1.90, per share.
On the other side, DAAR Communications led the decliners table by 17.46 per cent to close at 52 kobo, per share. C&I Leasing followed with a loss of 14.72 per cent to close at N2.55, while Custodian Investment declined by 10.95 per cent to close at N9.35, per share.
Overall, a total turnover of 2.633 billion shares worth N43.652 billion in 33,709 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 1.703 billion shares valued at N30.495 billion that exchanged hands previous week in 37,765 deals.
The Financial Services Industry (measured by volume) led the activity chart with 2.176 billion shares valued at N31.741 billion traded in 17,295 deals; contributing 82.64 per cent and 72.72 per cent to the total equity turnover volume and value respectively.
The Consumer Goods Industry followed with 176.983 million shares worth N5.309 billion in 3,785 deals, while the Oil and Gas Industry, with a turnover of 71.184 million shares worth N3.906 billion in 2,648 deals.
Trading in the top three equities; Fidelity Bank, Access Holdings and Zenith Bank (measured by volume) accounted for 1.351 billion shares worth N20.222 billion in 6,631 deals, contributing 51.31 per cent and 46.33 per cent to the total equity turnover volume and value respectively.
