Chinwendu Obienyi
Amid mild gains recorded in three of the four trading days on the floor of the Nigerian Stock Exchange (NSE), buying interest in top bellwethers by investors improved the market’s Year-to-Date (YTD) return to 30 per cent.
This is even as the market’s All Share Index (ASI) rose by 2.19 per cent, closing the trading week at 34,885.51 points while market capitalisation grew by N390 billion to close at N18.228 trillion.
Further analysis of the stock market’s performance for the week revealed that the volume and value of stocks traded plunged by 84 per cent and N28 per cent respectively as a total turnover of 1.816 billion shares worth N25.791 billion in 31,665 deals was traded on the floor of the Exchange, in contrast to a total of 11.400 billion shares valued at N35.892 billion that exchanged hands in the prior week in 39,265 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.274 billion shares valued at N14.710 billion, traded in 18,392 deals; thus, contributing 70.15 per cent and 57.04 per cent to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 217.170 million shares worth N231.809 million in 1,226 deals while the Consumer Goods Industry recorded a turnover of 113.760 million shares worth N2.598 billion in 4,568 deals.
Trading in the top three equities namely Zenith Bank Plc, Transnational Corporation of Nigeria Plc, and Access Bank Plc (measured by volume) accounted for 649.529 million shares worth N8.104 billion in 6,395 deals, contributing 35.76 and 31.42 per cent to the total equity turnover volume and value respectively.
Twenty-seven (27) equities appreciated at price during the week, higher than twenty-one (21) equities in the previous week. Forty-three (43) equities depreciated in price, lower than fifty-five (55) equities in the previous week. Ninety-one (91) equities remained unchanged, higher than eighty-five (85) recorded in the previous week.
Commenting on the performance of the market, stock market analysts who spoke to Daily Sun, said the decision of the Central Bank of Nigeria (CBN) to leave all key indicators unchanged, kept stock market investors relieved amid the bias that Nigerian banks would have enough headway in mitigating the prevailing economic uncertainties currently in play.
They however, called on investors to be cautious as transactions resume today, taking into consideration the low presence of the foreign portfolio investors amid low investments seen lately in the market while adding that stringent capital controls set in place by the CBN could limit the bullish run in the long term.
Analysts at Cordros Capital, in an emailed note to Daily Sun, said, they expected alpha-seeking investors to continue rotating their portfolio towards equities amid attractive dividend yields on bellwether stocks.
“We expect market performance to be dominated by the bulls, as positioning by early birds in dividend-paying stocks ahead of FY 2020 dividend declarations should outweigh profit-taking activities. We reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings”, they said.
For his part, a stockbroker who craved anonymity, said the macroeconomic situation still remains uncertain while adding that profit taking would ensue in this week’s transactions.