Equities market down by 0.61% in one week over upward yield in money market
By Kayode Tokede
The bearish performance of the Nigerian Stock Exchange (NSE) extended to a third consecutive week, as the upward retracement in yields in the financial market continued to dampen investors’ sentiments.
The bond auction results, wherein stop rates rose by an average of 254 basis points to 11.10 per cent from 8.56 per cent at the last auction, further magnified the downbeat mood of investors last week.
The NSE All-Share Index and market capitalization depreciated by 0.63 per cent and 0.61 per cent to close the week at 40,186.70 basis points and N21.026 trillion respectively.
Consequently, the market Year-till-Date (YtD) return swung into negative territory, settling at -0.2 per cent.
All other indices finished lower with the exception of NSE Banking, NSE AFR Div Yield, NSE MERI Value, NSE Oil/Gas and NSE Growth Indices which rose by 0.54 per cent, 1.20 per cent, 0.27 per cent, 4.60 per cent and 5.43 per cent while the NSE ASeM and NSE Sovereign Bond Indices closed flat.
A total of 39 equities appreciated in price during the week, higher than 16 in the previous week while 33 depreciated in price, lower than 55 in the previous week, even as 90 equities remained unchanged, lower than 91 equities recorded in the previous week.
A total turnover of 1.541 billion shares worth N18.235 billion in 22,752 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 2.683 billion shares valued at N23.662 billion that exchanged hands last week in 27,844 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.099 billion shares valued at N11.110 billion traded in 12,544 deals; thus contributing 71.35 per cent and 60.92 per cent to the total equity turnover volume and value respectively.
The Consumer Goods Industry followed with 133.156 million shares worth N2.327 billion in 3,941 deals. The third place was Conglomerates Industry, with a turnover of 121.143 million shares worth N263.219 million in 839 deals.
Trading in the top-three equities namely First Bank Holding Plc, Guaranty Trust Bank Plc and Zenith Bank Plc (measured by volume) accounted for 553.512 million shares worth N8.931 billion in 5,132 deals, contributing 35.92 per cent and 48.98 per cent to the total equity turnover volume and value respectively.
A total of 1.054 million units of ETPs valued at N7.902 billion were traded in the week in 49 deals compared with a total of 1.394 million units valued at N5.163 billion transacted last week in 36 deals.
A total of 8,613 units of Bonds valued at N12.566 million were traded in the week in two deals compared with a total of 46,721units valued at N60.054 million transacted last week in 19 deals.
Analysts at Cordros Capital stated that, “We expect the deluge of corporate earnings accompanied by dividend declarations to temper bearish sentiments in the week ahead. However, we do not rule out the possibility of continued profit-taking activities due to growing concerns about yield elevation in the FI market.
“As a result, we think the local bourse will likely exhibit a zig-zag pattern. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”
