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By Chinwendu Obienyi
Amid current weak macro-economic environment, political tension, inflation and foreign exchange challenges, the Nigerian stock market closed in the negative territory at the weekend, recording 3.4 per cent to close at 47,351.43 points– its biggest weekly loss in 3 years.
Similarly, investors’ earnings dipped by N660 billion week-on-week (w/w) as market capitalisation which opened at N26.451 trillion, closed the week at N25.791 trillion.
Accordingly, the market’s year-to-date (YTD) return weakened to 10.8 per cent which previously stood at 14.8 per cent
Daily Sun investigations revealed that profit-taking occurred in major stocks like Airtel Africa (-10 per cent), Presco (-9.99 per cent). In addition, tier-1 banks like AccessCorp (-5.59 per cent), GTCO (-4.23 per cent) and Zenith Bank (-2.25 per cent) all faced an extended rout, most likely the continued fallout from the outcome of the previously held Monetary Policy Meeting (MPC).
Performance across sectors was largely bearish, as losses in the Banking (-3.4 per cent), Insurance (-1.2 per cent), Oil & Gas (-1.0 per cent), Consumer Goods (-0.6 per cent), and Industrial Goods (-0.3 per cent) indices reflected the overall market sentiment. Further analysis of the market performance showed that activity levels mirrored the market’s broad gauge, as trading volume and value declined by 41.6 per cent w/w and 15.1 per cent w/w, respectively.
Commenting on the performance of the market, analysts at Cordros Research, said, “We expect the weak sentiments that dominated the local bourse this week to persist in the week ahead as investors continue to scale down exposure to equities amidst expectations of a continued uptick in fixed income yields.
Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings”.
A total turnover of 586.939 million shares worth N8.837 billion in 17,183 deals was traded this week by investors, in contrast to a total of 1.005 billion shares valued at N10.406 billion that exchanged hands last week in 17,844 deals.
The Financial Services Industry (measured by volume) led the activity chart with 393.814 million shares valued at N4.660 billion traded in 9,168 deals; thus contributing 67.1 per cent and 52.73 per cent to the total equity turnover volume and value respectively. The ICT Industry followed with 48.178 million shares worth N1.203 billion in 1,294 deals while the Conglomerates Industry, recorded a turnover of 40.135 million shares worth N44.406 million in 513 deals.
Trading in the top three equities namely Guaranty Trust Holding Company Plc, Sterling Bank Plc and Zenith Bank Plc. (measured by volume) accounted for 239.637 million shares worth N3.546 billion in 4,375 deals, contributing 40.83 per cent and 40.13 per cent to the total equity turnover volume and value respectively.
