By Chinwendu Obienyi
Despite the rout across the global equities market, the rally in the Nigerian equities market remained unscathed as intense bargain hunting activities in stocks pushed the All-Share Index (ASI) higher by 4.25 per cent week-on-week (w/w) to close at 53,100.21 points.
This is now the market’s fifth consecutive weekly gain since December 24, 2020. According to Daily Sun analysis, strong buying interest in International Breweries (+30.4 per cent), Okomu Oil (+26.5 per cent), Flourmills (+20.1 per cent), MTNN (+15 per cent), WAPCO (+14.2 per cent), NB (+10.0 per cent), and SEPLAT (+8.3 per cent) was responsible for the gain recorded.
Accordingly, the market’s Month-to-Date (MTD) and Year-to-Date (YTD) returns for the index increased to +7.0 per cent and +24.3 per cent, respectively. Specifically, the NGX market capitalization closed at N28.626 trillion from an opening value of N27.459 trillion as investors gained N1.17 trillion.
Further analysis showed that activity level mirrored the upbeat performance, as volume of stocks traded rose by 13.6 per cent w/w while value of stocks traded rose by 38.7 per cent w/w. A total turnover of 1.816 billion shares worth N27.194 billion in 36,286 deals was traded by investors on the floor of the exchange, in contrast to a total of 1,598 billion shares valued at N19.603 billion that exchanged hands last week in 21,494 deals.
The Financial Services Industry (measured by volume) led the activity chart with 904.860 million shares valued at N8.498 billion traded in 12,883 deals; thus contributing 49.82 per cent and 31.25 per cent to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 263.830 million shares worth N540.313 million in 1,651 deals while the Consumer Goods Industry recorded a turnover of 238.964 million shares worth N5.816 billion in 7,635 deals.
Trading in the top three equities namely Transnational Corporation Plc, Guaranty Trust Holding Company Plc and Jaiz Bank Plc (measured by volume) accounted for 459,179 million shares worth N3.294 billion in 3,645 deals, contributing 25.28 and 12.11 per cent to the total equity turnover volume and value respectively.
Elsewhere, risk-off sentiments reverberated across global markets as investors assessed the risk of a slowing global economy against the Federal Reserve’s aggressive monetary tightening moves.
Accordingly, US (DJIA: -3.6 per cent; S&P 500: -4.7 per cent) stocks posted huge losses as investors reacted negatively to Federal Reserve officials comments on further tightening of monetary policy while European markets (STOXX Europe: -0.4 per cent; and FTSE 100: -0.9 per cent) were set for a weekly loss as global growth and inflation concerns remained elevated in the region.
Also, Asian markets posted mixed performances, as the Japanese Nikkei 225: (-2.1 per cent) closed lower mirroring selloffs on Wall Street.
Elsewhere, the SSE: (+2.8 per cent) reversed weeks of losses as authorities ruled out the imposition of a lockdown in Beijing amid measures to contain the spread of the coronavirus. Emerging (MSCI EM: -4.2 per cent) and Frontier (MSCI FM: -5.0 per cent) market stocks mirrored the bearish trend across global stocks consequent upon losses in South Korea (-1.5 per cent) and Kuwait (-7.3 per cent), respectively.
Reacting to the performance of Nigeria’s stock market, analysts at Cordros Research, said that there is likely to be some profit taking while adding that “cautious trading” is likely to dominate transactions on the trading floor of NGX this week.
“In the near term, we think the bears are likely to book profit across most counters, given the five-week bullish run in the market.
Thus, we see more of a “choppy theme” as cautious trading takes center stage ahead of the MPC meeting scheduled later in the month. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings”, they said.