By Kayode Tokede
Investors’ interest in Zenith bank plc, Guaranty Trust Bank plc (GTBank) and Dangote Sugar boost the Nigerian Stock Exchange All-Share Index (NSE ASI) by 12.97 per cent in one week.
The 21.8 per cent gain in Zenith Bank and 34.5 per cent gain in Dangote Sugar drove the equities market by 4021.29 basis points to 35,037.46 basis points from 31,016.17 basis points the equities market opened for trading in prior week’s transactions.
The positive performance in the local bourse took the market to uncharted territory, as the rally on the penultimate trading day, when the ASI gained 6.23 per cent triggered the market circuit breaker – the first time since its introduction in 2016.
This led to the suspension of trading activities when the market first hit the five per cent ceiling at 12:55 p.m, before reopening at 1:25 p.m.
Activity level mirrored the upbeat performance, as volume surged by 117.3% w/w while value spiked 158.5per cent w/w.
Despite profit-taking activities on the final trading day, the All-Share Index remained above the 35,000 basis points psychological mark breached on Thursday, closing at 35,037.46 basis points.
The MTD return stood at 30.6 per cent while the YTD return for index surged to 30.5 per cent.
Performance across sectors was positive, as the Industrial (+17 per cent), index led the chart closely followed by Banking (+14.4 per cent) then Consumer Goods (+11.4 per cent), Oil and Gas (+5.3 per cent) and Insurance (+4.9 per cent) indices.
The weekly market stated, “It was a historic trading week as the NSE All Share Index (ASI) posted its largest daily gain in more than five years on Thursday, 12 November 2020.
“The ASI rose beyond the set threshold of 5% triggering a 30 minute trading halt of all stocks for the first time since the Circuit Breaker was introduced in 2016.
“The Circuit Breaker protocol was triggered at 12:55p.m., when the NSE ASI increased from 33,268.36 to 34,959.39. The market reopened at exactly 1:25p.m., with a 10 minute intra-day auction session before resuming continuous trading till the close of the day at 2:30p.m.
“Meanwhile, a total turnover of 4.509 billion shares worth N58.733 billion in 47,140 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 2.067 billion shares valued at N22.636 billion that exchanged hands last week in 25,187 deals.
“The Financial Services industry (measured by volume) led the activity chart with 3.073 billion shares valued at N35.408 billion traded in 25,894 deals; thus contributing 68.15per cent and 60.29 per cent to the total equity turnover volume and value respectively.
“The Conglomerates Industry followed with 437.822 million shares worth N771.280 million in 1,864 deals.
“The third place was the Consumer Goods Industry, with a turnover of 373.613 million shares worth N7.816 billion in 7,471 deals.
“Trading in the top three equities namely Zenith Bank Plc, FBN Holding Plc and Transcorp Hotels Plc (measured by volume) accounted for 1.426 billion shares worth N18.083 billion in 9,537 deals, contributing 31.63 per cent and 30.79 per cent to the total equity turnover volume and value respectively.”
Analysts at Cordros Research stated that, “In the short to medium term, we still see scope for expansion in valuation multiples as sub 1% yields on NTBs will continue to engender rejigging of portfolios towards equities. In the week ahead, we expect investors’ attention to be centred on Q3 earnings yet to be published from the big banks (FUGAZ).
“Considering the robust gains recorded across most counters over the past two months, we expect some profit-taking activities, albeit a short-lived one. We reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.”