By Chinwendu Obienyi
The bearish sentiment consolidated its grip on the Nigerian Exchange Limited (NGX) as investors liquidated their holdings to cash out profits made across bellwether stocks last week.
Specifically, sell-offs in Airtel Africa (-4.7 per cent), Flourmill (-3.5 per cent), GTCO (-2.9 per cent) and Stanbic (-2.4 per cent) drove market capitalisation down N177 billion to close the week at N20.279 trillion from an opening value of N20.456 trillion.
This was as the All-Share Index (ASI) shed 0.86 per cent week-on-week (w/w), to close at 38,921.78 points, forcing Month-to-Date (MTD) and Year-to-Date (YTD) losses to increase to -0.8 and -3.3 per cent, respectively.
But activity levels were stronger, as trading volumes and value rose by 7.9 per cent w/w, and 52.1 per cent w/w, respectively. Performances across sectors were mixed with Oil and Gas (+2.3 per cent), and Consumer Goods (+0.2 per cent) indices recording gains, while the Insurance (-3.4 per cent) and Banking (-1.0 per cent) indices declined. However, the Industrial Goods index closed flat.
Market’s total turnover was 1.426 billion shares worth N13.073 billion in 19,315 deals were traded by investors on the floor of the exchange, in contrast to a total of 1.338 billion shares valued at N8.650 billion that exchanged hands penultimate trading sessions in 19,830 deals.
Meanwhile, the Financial Services Industry (measured by volume) led the activity chart with 1.136 billion shares valued at N8.201 billion traded in 10,700 deals; thereby contributing 79.68 per cent and 62.73 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 76.520 million shares worth N1.383 billion in 3,076 deals while the Conglomerates recorded a turnover of 58.222 million shares worth N186.293 million in 769 deals.
Trading in the top three equities namely FBN Holdings Plc, Access Bank Plc and Wema Bank Plc (measured by volume) accounted for 626.756 million shares worth N4.458 billion in 2,802 deals, contributing 43.95 per cent and 34.10 per cent to the total equity turnover volume and value respectively.
Commenting on the performance of the market, analysts at Cordros Capital, said: “In the week ahead, we anticipate cautious trading in the bourse following the MPC meeting scheduled for next week. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro fundamentals remain a significant headwind for corporate earnings”.
Meanwhile, shareholders of the NGX approved the exchange’s proposals to introduce equity-based incentives to employees’ remuneration, including an Employee Share Ownership Plan and a Long-Term Incentive Plan, aligning the interests of internal stakeholders with those of shareholders in long term value creation.
The NGX board had recommended that shareholders approve the issuance and allotment of 200,419,990 ordinary shares of 50 kobo each out of the authorised share capital of Nigerian Exchange Group Plc for the operation of a Long Term Incentive Plan consisting of a Deferred Bonus Plan (DBP) and an Employee Share Purchase Plan (ESPP), with effect from January 1, 2021, subject to obtaining the requisite regulatory approvals.
Both plans, by offering appropriate equity incentives to scheme participants, will encourage wider employee ownership of shares and thereby align the NGX workforce with shareholders’ interest.