Equities market drops by 0.06% over bearish market performance
After seven weeks of sustained rally, bearish sentiment resurfaced on the Nigerian Exchange Limited (NGX) last week as the equities market declined by 0.06 wee-on-week (W-o-W) prrformance.
Investors profit-taking in Unilever Nigeria, Courteville Business Solutions, Nigerian Exchange Group (NGXGroup) and CUTIX shares. Hence, the All-Share Index (ASI) shed W-o-W by 24.10 points or 0.06 per cent to close at 42,014.50 points. Similarly, the market capitalisation lost N13 billion W-o-W to close at N21.926 trillion.
Similarly, sector gauges mirrored the bearish sentiment. The NSE Banking, NSE Oil & Gas and the NSE Consumer Goods indices nosedived by 1.73 per cent, 1.63 per cent and 0.74 per cent to close at 403.27 points, 384.54 points and 565.30 points respectively. However, the NSE Insurance and the NSE Industrial indexes rose by 0.99 per cent and 0.88 per cent to close at 181.70 points and 2,196.62 points respectively.
Market breadth for the week closed negative as 23 equities appreciated in price, 43 equities depreciated in price, while 90 equities remained unchanged. Regency Assurance led the gainers table by 18.92 per cent to close at 44 kobo, per share. Multiverse Mining and Exploration followed with a gain of 10.00 per cent to close at 22 kobo, while SCOA Nigeria went up by 9.47 per cent to close to N1.04, per share.
On the other side, Eterna led the decliners table by 15.49 per cent to close at N7.31, per share. Unilever Nigeria followed with a loss of 14.42 per cent to close at N13.35 and Courteville Business Solutions declined by 11.36 per cent to close at 39 kobo, per share.
Overall, a total turnover of 1.428 billion shares worth N12.373 billion in 23,987 deals were traded last week by investors on the floor of the Exchange, in contrast to a total of 3.001 billion shares valued at N34.547 billion that exchanged hands previous week in 25,932 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.010 billion shares valued at N7.992 billion traded in 12,208 deals; contributing 70.75 per cent and 64.60 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 94.729 million shares worth N207.829 million in 878 deals, while the Consumer Goods Industry pulled a transaction of 62.779 million shares worth N1.326 billion in 3,814 deals.
Trading in the top three equities; FBN Holdings, Sterling Bank and United Bank for Africa (UBA) accounted for 402.924 million shares worth N3.063 billion in 3,208 deals, contributing 28.22 per cent and 24.76 per cent to the total equity turnover volume and value respectively.
Capital market analysts said following the latest trend in the Nigerian equities space, the market is likely to see mixed trading this week.
Speaking on market performance for this week, analysts at Cordros Securities Limited said “We expect investors to rebalance their portfolios based on an assessment of corporate earnings released for third quarter (Q3), 2021. As a result, we expect market performance to remain mixed in the week ahead as investors rotate their portfolios towards dividend-paying stocks amid intermittent profit-taking activities.
“Overall, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”
This week, analysts at Afrinvest Limited expected sell pressure to dominate the market barring any positive catalyst. However, analysts at Cowry Assets Management Limited Cowry Research expected “The local bourse index to close northwards as investors respond positively to the proposed sale of 575 million units of MTN shares to institutional and retail investors. Also, we feel investors will also position in those companies that have printed higher profitability and are likely to pay good dividends in full year, 2021.”
The chief operating officer of InvestData Consulting Limited noted that the bearish sentiment and weak momentum since the beginning of November were due to selloffs and profit-taking across major sectors and equities that had recently rallied in the midst of impressive corporate earnings and positive macroeconomic indices, saying that these point to a better market that will support prices in the short to long run as players reposition their portfolios ahead of seasonality like the Santa Claus rally and others in the remaining sessions of the year 2021.
