By Chinwendu Obienyi
Nigeria’s equities market could not consolidate gains recorded in the prior week as profit-taking dominated activities last week.
Daily Sun analysis of the performance of the market in five days revealed that investors took advantage of the gains recorded over the past month in booking profit on bellwether stocks. Thus, this resulted in the NGX All-Share Index (ASI) dropping 0.06 per cent week-on-week (w/w) to close at 42,014.50 points.
Notably, profit-taking in Unilever (-14.4 per cent), WAPCO (-5.6 per cent), ETI (-5.1 per cent) and Flourmill (-2.7 per cent) drove the weekly loss. Consequently, the Month-to-date (MTD) and Year-to-date (YTD) return moderated to -0.1 and +4.3 per cent, respectively while investors lost N2 billion as market capitalisation closed the week at N21.926 trillion.
Activity levels on the NGX mirrored the market’s broad-gauge decline, as trading volumes and value declined by 52.4 per cent w/w and 64.2 per cent w/w, respectively as a total turnover of 1.428 billion shares worth N12.373 billion in 23,987 deals were traded last week by investors on the floor of the Exchange, in contrast to a total of 3.001 billion shares valued at N34.547 billion that exchanged hands in the previous week in 25,932 deals.
Trading in the top three equities namely FBN Holdings Plc, Sterling Bank Plc and United Bank for Africa Plc (measured by volume) accounted for 402.924 million shares worth N3.063 billion in 3,208 deals, contributing 28.22 per cent and 24.76 per cent to the total equity turnover volume and value respectively.
Reacting to the performance, Cordros Capital, in an emailed note, said they expect investors to rebalance their portfolios based on an assessment of corporate earnings released for Q3 2021.
“As a result, we expect market performance to remain mixed in the week ahead as investors rotate their portfolios towards dividend-paying stocks amid intermittent profit-taking activities. Overall, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings”, it said. On the other hand, analysts at Afrinvest said, they expect sell pressure to dominate the market barring any positive catalyst.