Going the way of last week, the Nigerian stock market is expected to continue on weak performance.
Analysts at Afrinvest Limited stated that “In the absence of positive catalysts, we expect the weak performance to persist this week.”
Also, analysts at Cordros Securities Limited said that “In the week ahead, we anticipate cautious trading in the bourse following the Monetary Policy Committee (MPC) meeting scheduled for next week. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”
In the new week, Cowry Assets Management Limited expected the equities market index to close in negative territory as investors remain cautiously optimistic amid rising rates in the fixed income space and the depreciating naira against the dollar.
On market outlook for the week, the chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion said that “We expect the mixed trend to continue as investors and traders utilizes the market’s sideways trending to position, while many stocks are trading within their buy ranges, a situation expected to attract funds into the equity space given the dividend yields capable of serving as a hedge against inflation.”
He also said, institutional investors and others will continue to digest the second quarter (Q2) GDP growth ahead of more first-tier bank results, as well as the continued repositioning of portfolios for the year’s last quarter.
“Also, investors are still observing the interplay of forces in the FX market as the CBN gives a guideline for the new digital currency platform. Last week’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.”
Last week, the bearish sentiment trailed the domestic stock market amid mixed financial performance released by Banks. Specifically, Guaranty Trust Holding Company (GTCO) printed 15.76 per cent decline in profit after tax, while United Bank for Africa (UBA) recorded 36.35 per cent increase in net profit. The relatively weak financial performance by GTCO rubbed-off on the equities market, hence, the All-Share Index (ASI) declined week-on-week (W-o-W) by 339.23 points or 0.86 per cent to close at 38,921.78 points. Similarly, market capitalisation fell N177 billion W-o-W to close at N20.279 trillion. Consequently, the month-to-date (MTD) and year-to-date (YTD) losses increased to 0.8 per cent and 3.3 per cent, respectively.
Sectoral performance was relatively positive. Specifically, the NSE Consumer Goods index, the NSE Oil & Gas index and the NSE Industrial index rose by 0.18 per cent, 2.28 per cent and 0.01 per cent respectively to close at 550.13 points, 371.45 points and 1.959.24 points respectively. On the flip side, the NSE Banking index and the NSE Insurance index moderated by 0.96 per cent and 3.39 per cent respectively to close at 373.16 points and 185.09 points respectively.
Market breadth for the week was negative as 25 equities appreciated in price, 34 equities depreciated in price, while 97 equities remained unchanged. Oando led the gainers table by 14.00 per cent to close at N4.64, per share. FTN Cocoa Processors followed with a gain of 11.11 per cent to close at 50 kobo, while Mutual Benefits Assurance went up by 10.71 per cent to close to 32 kobo, per share.
On the other side, Cornerstone Insurance led the decliners table by 15.79 per cent to close at 48 kobo, per share. UPDC followed with a loss of 10.06 per cent to close at N1.61 and SCOA Nigeria declined by 9.72 per cent to close at N1.30, per share.
Overall, a total turnover 1.426 billion shares worth N13.073 billion in 19,315 deals were traded last week by investors on the floor of the Exchange, in contrast to a total of 1.338 billion shares valued at N8.650 billion that exchanged hands previous week in 19,830 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.136 billion shares valued at N8.201 billion traded in 10,700 deals; contributing 79.68 per cent and 62.73 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 76.520 million shares worth N1.383 billion in 3,076 deals, while Conglomerates pulled a turnover of 58.222 million shares worth N186.293 million in 769 deals.
Trading in the top three equities; FBN Holdings, Access Bank and Wema Bank (measured by volume) accounted for 626.756 million shares worth N4.458 billion in 2,802 deals, contributing 43.95 per cent and 34.10 per cent to the total equity turnover volume and value respectively.
On Exchange Traded Products (ETPs) platform, a total of 2,016 units valued at N537,038.08 were traded last week in 10 deals compared with a total of 54,468 units valued at N2.603 million transacted previous week in 19 deals, while on the Bonds market, a total of 93,019 units valued at N99.809 million were traded last week in 39 deals compared with a total of 100,152 units valued at N99.670 million transacted prior week in 27 deals.