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By Chinwendu Obienyi
Positive sentiments returned to the Nigerian Exchange Limited (NGX) as investors took advantage of the moderation in share prices last week to make re-entry into sound companies with attractive dividend yields.
Consequently, market transactionsdriven by gains in MTNN, Union Bank of Nigeria (UBN), WAPCO and Presco, inched higher by 0.55 per cent week-on-week (w/w) to close at 53,201.38 points from an openning value of 52,815.78 points, while NGX capitalisation closed at N28.681 trillion from N28.523 trillion as investors gained N158 billion.
Performance across sectors of the market was mixed albeit with a bearish tilt, that saw the Oil and Gas (+0.7 per cent) and Industrial Goods (+0.3 per cent) indices closed positive while the Banking (-2.1 per cent), Insurance (-1.6 per cent) and Consumer Goods (-0.1 per cent) indices declined.
Based on the gain recorded, the market’s Month-to-Date (MtD) and Year-to-Date (YtD) returns for the index increased to +0.4 per cent and +24.5 per cent, respectively.
However, activity levels were weaker than in the prior week, with trading volume and value declined by 93.6 per cent w/w and 90.7 per cent w/w, respectively.
A total turnover of 1.831 billion shares worth N19.494 billion in 21,723 deals was traded, in contrast to a total of 28.736 billion shares valued at N209.060 billion that exchanged hands last week in 23,688 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.173 billion shares valued at N12.485 billion traded in 10,657 deals; thus contributing 64.07 and 64.04 per cent to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 419.100 million shares worth N607.703 million in 1,095 deals while the Consumer Goods Industry recorded a turnover of 69.680 million shares worth N2.754 billion in 3,158 deals.
Trading in the top three equities namely FBN Holdings Plc, Transnational Corporation Plc and United Bank for Africa Plc (measured by volume) accounted for 1.136 billion shares worth N8.323 billion in 2,906 deals, contributing 62.08 and 42.70 per cent to the total equity turnover volume and value respectively.
Twenty-nine (29) equities appreciated in price during the week, lower than Thirty-six (36) equities in the previous week. Thirty-six (36) equities depreciated in price, lower than forty-five (45) equities in the previous week, while ninety-one (91) equities remained unchanged higher than seventy-five (75) equities recorded in the previous week.
Reacting to the performance of the market, analysts at Cordros Capital, said they expect alpha-seeking investors to continue to seek trading opportunities in companies that delivered impressive earnings during the first quarter (Q1) of 2022 earnings season despite the expectation of an uptick in yields in the FI market.
“However, we think the absence of a near-term catalyst will likely skew overall market sentiments to the negative side, particularly as the political space gets heated up. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings”, they said. For their part, analysts at Coronation Research, said, “the market might experience jitters in the early trading session. However, we believe the market would rebound and close the week positively as investors position for interim dividend”.
