Investors lose N21bn in first week of H2’24

By Chukwuma Umeorah

The first trading week in the second half of 2024 saw the equities market of the Nigerian Exchange (NGX) experience a downturn, with investors collectively losing approximately N21 billion. The NGX All-Share Index and Market Capitalization both depreciated by 0.04 per cent to close the week at 100,022.03 points and N56.581 trillion, respectively.

In the week under review, investors traded a total turnover of 2.259 billion shares worth N31.166 billion in 42,851 deals. This marks a notable decline from the previous week’s total of 2.651 billion shares valued at N49.976 billion exchanged in 41,610 deals, reflecting cautious sentiment amid broader economic uncertainties and high interest rates, which have prompted some investors to tilt towards fixed income markets.

Despite the overall negative trend in the week under review, there were some positive movements within specific sectors. The NGX Banking Index saw a 3.87 per cent increase, closing at 862.32 points, as investors maintained buying interest in bank stocks due to the ongoing recapitalization exercise. Similarly, the NGX Oil/Gas Index rose by 3.01 per cent to finish at 1,484.07 points, and the NGX Insurance Index increased by 2.26 per cent to end at 399.41 points.

However, several indices finished lower, with notable declines observed in the NGX 30 Index, which dropped by 0.27 per cent to 3,700.46 points, and the NGX Premium Index, which fell by 0.52 per cent to 9,812.87 points. The NGX Consumer Goods Index also decreased by 0.69 percent, closing at 1,570.68 points.

The Financial Services Industry maintained its dominance in the activity chart, leading by volume with 1.801 billion shares valued at N22.030 billion traded in 23,112 deals. This sector contributed 79.75 per cent and 70.69 per cent to the total equity turnover volume and value, respectively. The Oil and Gas Industry followed, with 121.001 million shares worth N1.771 billion traded in 3,124 deals. The Conglomerates Industry came third, recording a turnover of 90.713 million shares worth N1.081 billion in 2,277 deals.

Fidelity Bank Plc, Universal Insurance Plc, and Guaranty Trust Holding Company Plc emerged as the top three equities by volume, accounting for 909.821 million shares worth N12.057 billion in 4,798 deals, thus contributing 40.28 percent and 38.69 percent to the total equity turnover volume and value, respectively.

The top gainers for the week included Veritas Kapital Assurance Plc, which gained 25 percent, and Conoil Plc, which saw a 20.48 percent increase. On the flip side, UPDC Real Estate Investment Trust experienced the highest loss, declining by 17.43 percent.

Investor sentiment was mixed, with thirty-seven equities appreciating in price, fewer than the forty-eight that gained in the previous week. Conversely, forty-five equities depreciated in price, higher than the thirty-four recorded last week, while seventy-two equities remained unchanged.

Market operators and analysts have projected a largely positive outcome for the second half of the year, following gains recorded in H1, the ongoing recapitalization exercise and investors’ repositioning their portfolio in fundamentally sound stocks.

Looking ahead to the coming week, analysts at Cowry Research predict that bulls will lead the charge as the half-year earnings reporting season approaches. According to them, “Position-taking and sector rotation are anticipated to persist ahead of the new earnings season, bringing changes in liquidity, momentum, volume, and reactions to both positive earnings and disappointing numbers, driving volatility that creates wealth for market players.”