By Chinwendu Obienyi and Chukwuma Umeorah
As key stock market indices across the globe experienced a sluggish week, partly due to the Thanksgiving Holiday observed in the US and Japan, Nigeria’s stock market also faced subdued momentum as investors traded cautiously.
Despite concerns about the inconsistencies in the Monetary Policy Committee (MPC) meetings, especially with the postponement of last week’s meeting, the market closed in the green, overcoming pressure from profit-taking activities during the week as market capitalisation of the Nigerian Exchange Limited (NGX) grew by N65 billion to close at N39.173 trillion from an opening value of N39.108 trillion.
Notably, the All-Share Index rose by 0.17 week-on-week (w/w) to 71,230.48 points, driven by buying interest in GTCO (+5.4 per cent) and Zenith Bank (+3.9 per cent), which outweighed profit-taking activities in Stanbic (-7.1 per cent). As a result, the Month-to-Date and Year-to-Date returns settled at +2.9 per cent and +39.0 per cent, respectively.
From a sectoral viewpoint, the Insurance (+4.1 per cent) and Banking (+1.9 per cent) indices advanced while the Consumer Goods (-0.5 per cent) index declined. Conversely, the Oil and Gas and Industrial Goods closed flat. In terms of trading activity, the total traded volume of stocks rose by 20.0 per cent w/w while the total value of stocks traded declined by 18.0 per cent w/w.
A total turnover of 2.425 billion shares worth N22.665 billion in 33,230 deals was recorded this week on the floor of the exchange, in contrast to 2.025 billion shares valued at N27.693 billion that changed hands last week in 32,763 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.721 billion shares valued at N11.647 billion traded in 14,585 deals; thus contributing 71.00 per cent and 51.39 per cent to the total equity turnover volume and value respectively.
The Services Industry followed with 185.692 million shares worth N424.729 million in 2,816 deals while the ICT Industry recorded a turnover of 139.865 million shares worth N4.440 billion in 2,971 deals.
Trading in the top three equities namely Universal Insurance Plc, Veritas Kapital Assurance Plc, and Unity Bank Plc (measured by volume) accounted for 809.400 million shares worth N492.625 million in 2,005 deals, contributing 33.38 per cent and 2.17 per cent to the total equity turnover volume and value respectively.
Further analysis of the market revealed that Fifty-nine (59) equities appreciated in price during the week, higher than fifty-four (54) equities in the previous week. Twenty-one (21) equities depreciated in price lower than thirty (30) in the previous week, while seventy-six (76) equities remained unchanged, higher than seventy-two (72) recorded in the previous week.
Reacting to the development, market analysts projected that despite the gain recorded, cautious trading is expected to continue this week as the absence of significant positive catalysts is expected to impact market sentiments.
Analysts at Cordros Research said, “We anticipate cautious trading in the local stock market in the coming week due to the absence of significant positive catalysts to boost sentiments.
Overall, we reiterate the need for positioning in only fundamentally sound stocks as the unimpressive macro environment remains a significant headwind for corporate earnings”.