The direction of the Nigeria equities market for this week is expected to be mixed, as investors expected to focus on the outcome of the Monetary Policy Committee (MPC).
Despite the profit booking and recent accumulation in some value stocks, core investors are, however, reinvesting their dividends into the market to support the liquidity flow index.
Going into the new week, analysts at Cowry Assets Management Limited anticipated the current trend of buying interests in value stocks and profit taking to continue as dividends payments by companies support the liquidity levels in the market as core investors continue their portfolio rebalancing ahead of markdown dates, MPC meeting and first quarter (Q1) GDP report expectations.
“However, we continue to advise investors to trade on companies’ stocks with sound fundamentals and a positive outlook,” Cowry said.
Cordros Securities Limited said: “Looking ahead, we believe investors will focus on the outcome of the MPC meeting scheduled to hold this week to gain further clarity on the movement of yields in the Fixed Income market.
“As a result, we expect cautious trading from domestic investors in the short term. Overall, we reiterate the need for positioning in only fundamentally sound stocks as the uninspiring macro story remains a significant headwind for corporate earnings.”
Afrinvest Limited added that, “in the coming week, we anticipate mild gains on the local bourse as investors hunt for bargains in relatively cheap and fundamentally sound stocks.”
Last Week’s Trading Activities
Losses recorded in the shares of top telecommunication player Airtel Africa, on the penultimate trading day of last week, ensured the market closed lower, as the local bourse suffered its second consecutive weekly loss.
Specifically, the All-Share Index declined by 0.05 per cent Week-on-Week (W-O-W) to close at 52,187.93 points. In the same vein, the market capitalisation of traded equities nosedived by N15 billion to close the week at N28.417 trillion.
Sectoral performance was mixed as the NGX Insurance index recorded a wekly gain of 5.2 per cent. NGX Banking index followed with a weekly gain of 2.9 per cent while NGX Consumer Goods index rose by 1.9 per cent W-o-W. on the other side NGX Oil and Gas index declined by 1.7 per cent W-o-W, while NGX Industrial Goods index closed flat.
Market breadth for the week was positive as 44 equities appreciated in price, 27 equities depreciated in price, while 85 equities remained unchanged. FTN Cocoa Processors led the gainers table by 37.50 per cent to close at N44 kobo, per share. Ikeja Hotel followed with a gain of 30.13 per cent to close at N2.03, while PZ Cussons Nigeria went up by 28.00 per cent to close to N16.00, per share.
On the other side, CWG Plc led the decliners table by 25.60 per cent to close at N1.54, per share. Ardova Plc (AP) followed with a loss of 23.67 per cent to close at N20.15, while May & Baker Nigeria declined by 10.11 per cent to close at N4.00, per share.
Overall, a total turnover of 3.029 billion shares worth N33.626 billion in 29,505 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 3.602 billion shares valued at N36.451 billion that exchanged hands previous week in 27,801 deals.
The Financial Services Industry (measured by volume) led the activity chart with 2.095 billion shares valued at N21.847 billion traded in 14,008 deals; contributing 69.17 per cent and 64.97 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 398.558 million shares worth N1.185 billion in 3,129 deals, while the Services Industry traded a turnover of 270.111 million shares worth N1.853 billion in 1,317 deals.
Trading in the top three equities; Fidelity Bank, Access Holdings and Transnational Corporation, (measured by volume) accounted for 1.328 billion shares worth N8.159 billion in 5,286 deals, contributing 43.84 per cent and 24.26 per cent to the total equity turnover volume and value respectively.