By Chinwendu Obienyi
Nigeria’s stock market suffered its second consecutive weekly loss as the bears continued to dictate proceedings leading to 0.18 per cent decline with the value of transactions standing at N9.47 billion.
Analysts had hoped to see some form of bargain hunting after the Central Bank of Nigeria (CBN) had retained all monetary policy parameters at the just-concluded MPC meeting. However, profit taking ensued in highly capitalized stocks such as Flourmill, BUA Cement, GT Bank.
As a result, the market’s index fell by 0.18 per cent to close at 38,256.99 points while investors lost N35 billion to close at N19.94 trillion. Consequently, the Month-to-Date (MTD) and Year-to-date (YTD) returns dipped further into negative territory, settling at -4.0 and -5.0 per cent respectively.
Furthermore, transaction activity levels were weaker than the prior week, as trading volume and value declined by one per cent w/w and 17.9 per cent w/w, respectively as a total turnover of 1.037 billion shares worth N9.471 billion in 17,577 deals were traded by investors.
This was in contrast to a total of 1.048 billion shares valued at N11.543 billion that changed hands in 17,233 deals the previous week. The Financial Services industry (measured by volume) led the activity chart with 687.623million shares valued at N5.659 billion traded in 9,506 deals; thus contributing 66.29 and 59.75 per cent to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 106.138million shares worth N545.020million in 1,146 deals while the ICT industry recorded a turnover of 84.31 million shares worth N350.698 million in 604 deals.
Trading in the top three equities namely Zenith Bank Plc, Guaranty Trust Bank Plc and Fidelity Bank Plc (measured by volume) accounted for 229.453 million shares worth N4.281 billion in 3,634 deals, contributing 22.12 per cent and 45.20 per cent to the total equity turnover volume and value respectively.
Thirty-two equities appreciated in price during the week, higher than 26 in the previous week. Thirty equities depreciated in price lower than the 41 equities in the previous week, while 98 equities remained unchanged, higher the 93 equities recorded in the previous week.
Speaking during the Business Morning show on Channels Television, Investment Analyst at Cordros Asset Management, Akintoye Oyelakun, noted that due to the uptick in fixed income (FI) instruments, the equities market would continue to experience volatility.
“We expect to see volatilities in the equities market and so we advise that investors should look towards stocks with more fundamentals and, given the recent performance of the market, the situation presents an opportunity for investors to look at securities that offer strong upside potential and high dividend yield as positioning themselves in such instruments will prove to be just right especially as we are approach the H1 2021 earnings from quoted companies.
We expect a neutral reaction from equity investors, given that a HOLD decision is likely to be interpreted as “business as usual”. Accordingly, we think the market will continue to exhibit a choppy theme as investors keep their gaze on yield movements in the FI market. We expect that fixed income investors will continue to cherry-pick dividend-paying stocks.
In contrast, risk-averse investors are likely to stay on the sidelines until positive triggers propel market performance. With the eagerly anticipated MPC meeting out of the way, we believe developments in the macroeconomic landscape and corporate actions will shape the direction of the local bourse”, he said.
For their part, analysts at Afrinvest, maintained that they expect to see bargain hunting activities as investors take advantage of the relatively cheaper prices of fundamentally sound stocks.