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By Chinwendu Obienyi and Chukwuma Umeorah
Despite losses recorded over three trading sessions, the shares of United Bank for Africa Plc, Fidelity Bank Plc and Access Holdings Plc dominated proceedings last week at the Nigerian Exchange Limited (NGX).
The three financial institutions collectively accounted for 447.125 million shares worth N6.488 billion in 4,913 deals., contributing to the total equity turnover volume and value of 29.88 per cent and 26.72 per cent respectively.
Local stocks had ended the week in the red, driven by selloffs in Stanbic (-13.1 per cent) and Geregu (-7.2 per cent). As a result, the All-Share Index shed 0.42 per cent week-on-week (w/w) to close at 66,915.41 points, while N156 billion was shaved off the market capitalisation which closed at N36.764 trillion.
Accordingly, the MTD and YTD returns moderated to +0.8 per cent and +30.6 per cent, respectively. Sectoral performance, however, showed a mixed picture with losses in the Insurance (-1.0 per cent), Consumer Goods (-0.5 per cent), and Industrial Goods (-0.1 per cent), indices but a gain in the Banking (+3.5 per cent) index. Elsewhere, the Oil and Gas index closed flat.
The loss did not come as a surprise as global stocks plummeted last week due to concerns about the potential escalation of the Israel-Hamas conflict in the Middle East. In addition, hawkish comments from the Federal Reserve Chairman on the possibility of further interest rate hikes and weak corporate earnings contributed to the risk-off sentiments. Accordingly, negative sentiments dominated trading in the US (DJIA: -0.8 per cent; S&P 500: -1.2 per cent) as investors reacted to a surge in the 10-year Treasury yield, mixed corporate earnings reports, and hawkish remarks from the Federal Reserve Chairman.
Furthermore, investors on seeing that Federal Government’s retained revenue settled lower at N4.83 trillion in first 7 months of 2023, – 3.9 per cent below the prorated budget (N5.03 trillion) coupled with the headline inflation increasing to its highest level since August 2005, rising by 92 basis points to 26.72 per cent y/y in September, pulled their profits away.
Hence, a turnover of 1.496 billion shares worth N24.284 billion in 29,298 deals was traded by investors on the floor of the Exchange, in contrast to a total of 1.470 billion shares valued at N24.431 billion that exchanged hands last week in 29,683 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.047 billion shares valued at N12.709 billion traded in 13,667 deals; thus contributing 69.99 per cent and 52.34 per cent to the total equity turnover volume and value respectively.
The ICT Industry followed with 94.997 million shares worth N1.445 billion in 1,982 deals. The third place was the
Conglomerates Industry, with a turnover of 80.655 million shares worth N526.409 million in 1,459 deals.
Reacting to the performance of the market, market analysts said they expect the new trading week will be shaped by the ongoing Q3 earnings. They reiterated the need for investors to keep taking positions in only fundamentally justified stocks as the weak macro environment remained a significant headwind on corporate earnings.
