Weak Sentiment Continues On Equities Trading This Week

Analysts expect Nigeria equities market for this week to be mixed, in the midst of continued selloffs. The local stock market endured another challenging week, characterised by downbeat sentiment among investors who were reacting to the latest consumer price inflation report from the National Bureau of Statistics (NBS) and speculations surrounding the forthcoming Monetary Policy Committee (MPC) meeting. The benchmark index experienced a slight decline, reflecting ongoing portfolio rebalancing influenced by first-quarter earnings and the dividend payment season, set against a backdrop of evolving market dynamics and fundamentals.

Analysts Optimism 

Looking ahead, analysts at Cowry Assets Management Limited said, the market is expected to maintain a weak sentiment as investors continue to digest the latest economic data from the statistics bureau. “The anticipated outcome of the upcoming MPC meeting, likely to result in a modest 100 basis points rate hike, could further dampen market sentiment. Despite the current market weakness and mixed sector performance, the oversold conditions and mixed technical indicators suggest potential buying opportunities for value investors aiming to capitalise on low prices and valuations. Meanwhile, we continue to advise investors on taking positions in stocks with sound fundamentals,” Cowry said.

This week, analysts at Afrinvest Limited said, ‘we expect the negative sentiment to persist as macroeconomic headwinds continue to dampen investors’ interest.’ On his part, the chief operating officer of InvestData Consulting Limited,  Ambrose Omordion said, “we expect mixed sentiments to continue as players continue to digest April CPI, low price attraction, dividend investing and reactions to Q1 numbers as Insurance corporate earnings are expected with dividend announcements and CPI report today, while taking advantage of pullbacks to position and rebalancing portfolio.” He noted that, “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 primarily demonstrated a bearish trend in four out of five trading sessions. Specifically, the All-Share Index declined by 0.11 per cent Week-on-Week (W-O-W) to close at 98,125.73 points. In the same vein, the market capitalisation of traded equities nosedived by N54 billion to close the week at N55.508 trillion. Across various sectors, most indices closed in negative territory. The NGX Industrial Goods index recorded a weekly gain of 0.01 per cent. Conversely, the NGX Banking index fell by 6.51 per cent W-o-W. The NGX Oil & Gas index decreased by 6.49 per cent; NGX-Insurance index dropped by 3.98 per cent; while NGX-Consumer Goods index was down by 1.29 per cent W-o-W. Market breadth for the week was negative as 28 equities appreciated in price, 51 equities depreciated in price, while 76 equities remained unchanged. International Energy Insurance led the gainers table by 11.49 per cent to close at N1.65, per share. McNichols followed with a gain of 9.89 per cent to close at N1.00, while Custodian Investment went up by 9.68 per cent to close to N10.20, per share.

On the other side, PZ Cussons Nigeria led the decliners table by 22.16 per cent to close at N21.60, per share. NEM Insurance followed with a loss of 18.36 per cent to close at N8.45, while Eterna declined by 18.32 per cent to close at N11.15, per share. Overall, a total turnover of 1.652 billion shares worth N42.677 billion in 38,123 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.187 billion shares valued at N50.667 billion that exchanged hands prior week in 45,277 deals. The Financial Services Industry led the activity chart with 979.479 million shares valued at N16.647 billion traded in 20,708 deals; contributing 59.30 per cent and 39.01 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 239.825 million shares worth N2.879 billion in 2,178 deals, while the Consumer Goods Industry traded  a turnover of 148.685 million shares worth N3.525 billion in 4,757 deals. Trading in the top three equities; Custodian Investment, Guaranty Trust Holding Company (GTCO) and Access Holdings (measured by volume) accounted for 500.343 million shares worth N11.768 billion in 6,551 deals, contributing 30.29 per cent and 27.57 per cent to the total equity turnover volume and value respectively.