Equities market appreciates marginally by 0.05% amid profit-taking activities

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By Kayode Tokede

The equities market of Nigerian Exchange Limited (NGX) extended its positive performance due to an improvement in investor sentiment.

Given the bullish momentum in the equities space, the NGX All-Share Index (ASI) rose week-on-week (w-o-w) by 0.05 per cent to close at 38,962.28 basis points. Similarly, market capitalisation rose N10 billion W-o-W to close at N20.300 trillion.

Sectoral performance was also positive. The NSE Insurance, NSE Oil & Gas and the NSE Industrial index gained by 1.75 per cent, 1.38 per cent and 0.23 per cent respectively to close at 187.24 points, 363.93 points and 1,959.04 points respectively. On the flip side, the NSE Banking and the NSE Consumer Goods indices fell by 0.43 per cent and 0.04 per cent respectively.

Market breadth for the week closed positive as 28 equities appreciated in price, 23 equities depreciated in price, while 104 equities remained unchanged. Pharma-Deko led the gainers table by 32.10 per cent to close at N2.14, per share. Nigerian Aviation Handling Company (NAHCO) followed with a gain of 15.13 per cent to close at N3.50, while Conoil went up by 14.09 per cent to close to N25.50, per share.

On the other side, SCOA Nigeria led the decliners table by 17.92 per cent to close at 87 kobo, per share. Presco followed with a loss of 8.18 per cent to close at N73.00 and Neimeth International Pharmaceuticals declined by 7.89 per cent to close at N1.75, per share.

Overall, a total turnover of 1.290 billion shares worth N13.921 billion in 16,745 deals were traded last week by investors on the floor of the Exchange, in contrast to a total of 856.289 million shares valued at N10.752 billion that exchanged hands previous week in 15,663 deals.

The Financial Services Industry (measured by volume) led the activity chart with 978.172 million shares valued at N8.300 billion traded in 8,716 deals; contributing 75.80 per cent and 59.62 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 62.006 million shares worth N1.187 billion in 2,546 deals, while Conglomerates Industry traded a turnover of 49.055 million shares worth N126.288 million in 589 deals.

Trading in the top three equities namely FBN Holdings (FBNH), United Bank for Africa (UBA) and Guaranty Trust Holding Company (GTCO), measured by volume accounted for 626.958 million shares worth N5.766 billion in 2,526 deals, contributing 48.58 per cent and 41.42 per cent to the total equity turnover volume and value respectively.

On Exchange Traded Products (ETPs) platform, a total of 9,728 units valued at 437,821.70 were traded last week in 18 deals compared with a total of 106,810 units valued at N1.852 million transacted prior week in 21 deals, while on the Bond market, a total of 60,929 units valued at N62.810 million were traded last week in 27 deals compared with a total of 51,261 units valued at N52.911 million transacted previous week in 26 deals.

Capital market analysts expected the equities to close positive this week as investors positioned ahead of the release of third (Q3) earnings by quoted companies.

Analysts at Cowry Assets Management Limited said that “In the new week, we expect the equities market index to close in positive territory as investors take position ahead of companies’ nine months financial results releases.”

Cordros Securities Limited stated that “We expect savvy investors to take advantage of the moderation in the share prices of bellwether stocks to make a re-entry in the week ahead. However, we expect intermittent profit-taking activities to persist as investors search for clues on the direction of yields in the fixed income (FI) market.  Accordingly, we think the market will exhibit a choppy pattern. Overall, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”

Analysts at Afrinvest Limited noted that “In the coming week, we expect the momentum on the local bourse to remain elevated on improved investor sentiment.”

On market outlook for the week, the chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion said “We expect reversal as investors and traders take advantage of the market’s pullbacks to position, while many stocks are trading within their buy ranges, a situation expected to attract funds into the equity space, given the dividend yield capable of serving as a hedge against inflation.

“Also, institutional investors and others continue to digest recently release economic data ahead of the month and quarter-end, 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.

“The low volume suggests that institutional investors and others are still cautiously looking at the economic data and policy direction of the economic managers. It is noteworthy that oil price pullback in the international market; corporate actions, as well as the interim dividend possibilities, are around the corner.”