THE local bourse reversed prior week’s gains as the All-Share index declined by 1.10 percent week-on-week (W-o-W) to close at 67,395.74 basis points. Concomitantly, the total market capitalisation of listed equities experienced a decline of N400 billion week-on-week to close at N36.886 trillion.
As the third quarter reporting season draws closer and investors take a bet on the back of recently published macroeconomic data, bearish momentum and pattern pervaded the domestic market last week with the benchmark index recording a 1.10 percent week-on-week loss.
This comes as FTSE Russell, a global index provider, opted to downgrade Nigeria’s equity index from ‘frontier’ to ‘unclassified’ market status on September 18 on the back of Nigeria’s ongoing foreign exchange (FX) crisis, which has posed hurdles for international institutional investors seeking to repatriate their capital from the nation.
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This means that Nigerian stocks will be excluded from the FTSE Frontier Index Series, the FTSE Frontier 50 Index and others.
The week’s performance was driven by profit-taking activities in Zenith Bank, Guaranty Trust Holding Company (GTCO), Dangote Sugar Refinery and MTN Nigeria Communications (MTNN).
The sectoral performance in the week under review unveiled a largely bearish outing. The NGX Insurance index emerged as the lone gainer in the week by 0.46 percent week-on-week.
On the contrary, the NGX Banking index was hardest hit in the week as the index lost 3.24 percent week-on-week. The NGX Oil and Gas, NGX Consumer Goods and NGX Industrial Goods indices also exhibited signs of decline, albeit to a lesser extent, with losses of 2.02 percent, 1.84 percent and 0.28 percent, respectively.
However, market breadth for the week was negative as 32 equities appreciated in price, 53 equities depreciated in price, while 70 equities remained unchanged. Oando led the gainers’ table by 42.86 percent to close at N11.00 per share. Chellarams followed with a gain of 32.76 percent to close at N3.85, while CWG went up by 29.76 percent to close to N7.50 per share.
On the other side, Associated Bus Company led the decliners table by 33.63 percent to close at 75 kobo per share. Omatek Ventures followed with a loss of 31.03 percent to close at 40 kobo, while eTranzact International declined by 26.50 percent to close at N7.35 per share.
Overall, a total turnover of 2.933 billion shares worth N47.449 billion in 44,654 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.644 billion shares valued at N45.450 billion that exchanged hands prior week in 44,189 deals.
The financial services industry (measured by volume) led the activity chart with 1.955 billion shares valued at N26.384 billion traded in 21,707 deals, contributing 66.67 percent and 55.61 percent to the total equity turnover volume and value, respectively.
The oil and gas industry followed with 281.356 million shares worth N5.307 billion in 4,423 deals, while the conglomerates industry traded a turnover of 280.586 million shares worth N1.763 billion in 3,079 deals.
Trading in the top three equities, United Bank for Africa (UBA), Transnational Corporation (Transcorp) and Access Holdings (measured by volume) accounted for 1.026 billion shares worth N13.649 billion in 9,733 deals, contributing 34.98 percent and 28.77 percent to the total equity turnover volume and value, respectively.
Capital market analysts had predicted cautious trading on the Nigerian stock market last week, in the absence of strong positive triggers to boost investors’ appetite for risky assets.
Looking into the new week, analysts at Cowry Assets Management Limited said, “Market sentiment is likely to be diverse as investors engage in bargain hunting ahead of the highly anticipated third-quarter earnings season which draws closer.
“This will be driven by reactions on the just published inflation data from the National Bureau of Statistics (NBS), which has remained elevated, potentially prompting further interest rate adjustments by the Central Bank of Nigeria (CBN) at its upcoming Monetary Policy Committee (MPC) meeting later this month. Meanwhile, we continue to advise investors on taking positions in stocks with sound fundamentals.”
Cordros Securities Limited noted that “We anticipate cautious trading on the bourse next week in the absence of strong positive triggers to boost investors’ appetite for risky assets. Overall, we reiterate that investors should seek trading opportunities in fundamentally sound stocks as the weak macroeconomic environment remains a significant headwind to corporate earnings.”
While, Comercio Partners Limited stated that “looking ahead, we anticipate a continuation of similar market dynamics in the new trading session.”