Bearish week for investors as equities dip 1.51%

By Chukwuma Umeorah

The local equities market faced a bearish trading week, marked by significant profit-taking and sell-offs, particularly in mid and large-cap stocks. This downturn led to a 1.51 per cent decline in the All-Share Index (ASI), closing at 97,100.31 points, while market capitalization dropped to N55.132 trillion, erasing N846.53 billion in value.

The market’s weak performance was exacerbated by low trading volumes and negative market internals, reflecting both the ongoing volatility and the cautious sentiment among investors. Throughout the week, four of the five trading sessions ended in the red, with only Friday’s session closing flat.

A total turnover of 2.033 billion shares worth N42.155 billion was recorded in 45,157 deals, a decline from the previous week’s 2.679 billion shares valued at N49.017 billion in 47,451 deals. The Financial Services Industry dominated the activity chart, trading 1.377 billion shares valued at N25.652 billion in 20,132 deals, accounting for 67.73 per cent of the total equity turnover volume and 60.85 per cent of the value. The Oil and Gas Industry followed, with 276.729 million shares worth N6.026 billion in 6,848 deals.

The market’s decline was driven by sell-offs in key sectors, particularly the banking and industrial goods sectors, which retreated by 2.28 per cent and 5.16 per cent week-on-week, respectively. These declines were influenced by the interplay of market dynamics amidst heightened volatility, including the release of the July 2024 Consumer Price Index (CPI) data, which indicated a deceleration in Nigeria’s headline inflation to 33.40 per cent and expectations surrounding interim dividend declarations.

Despite the broader market downturn, some sectors managed to stay in positive territory. The NGX Oil & Gas Index led the gainers with a 5.25 per cent increase, driven by a 19.69 per cent surge in TotalEnergies Marketing Nigeria Plc. The NGX Insurance Index and NGX Consumer Goods Index also posted gains of 0.79 per cent and 0.37 per cent, respectively.

In terms of individual stock performance, Guaranty Trust Holdings Company Plc, Veritas Kapital Assurance Plc, and Japaul Gold & Ventures Plc were the most traded stocks, accounting for 674.233 million shares worth N16.055 billion in 3,977 deals, contributing 33.16 per cent to the total equity turnover volume and 38.08 per cent to the value. However, several notable stocks recorded substantial losses. BUA Cement Plc saw the most significant decline, with its share price dropping by 14.82 per cent to close at N109.80. Oando Plc also experienced a sharp decline of 11.70 per cent, ending the week at N35.85 per share, while Cutix Plc and Cadbury Nigeria Plc fell by 17.50 per cent and 9.95 per cent respectively.

On the flip side, certain stocks stood out as top gainers during the week. RT Briscoe Plc led the chart with a 33.9 per cent increase, followed by TotalEnergies (20 percent), Julius Berger Nigeria Plc (18 percent), Guinea Insurance Plc (18 per cent), and University Press Plc (12 per cent).

During the review week, the local bourse experienced widespread declines, with thirty-nine equities appreciating in price, down from forty-six in the previous week, while sixty-six equities depreciated, up from thirty-eight. The week closed with forty-six equities unchanged, compared to sixty-seven the previous week, underscoring the cautious sentiment that prevailed among investors. The market’s year-to-date (YTD) return now stands at 29.86 per cent, as investors navigate the challenges and opportunities presented by the current market conditions.

In their weekly review note, analysts at Cowry Research stated, “The market continues to trade within the value area, presenting entry opportunities for discerning investors and savvy traders. Transaction volume patterns and support levels are signalling further buying opportunities, even as market participants look ahead to the forthcoming release of the Q2 2024 GDP report, along with audited half-year earnings and interim dividend declarations.”

They anticipate a mixed performance in the coming week, driven by ongoing portfolio rebalancing and profit-taking activities.