Chinwendu Obienyi
Transactions on the floor of the Nigerian Stock Exchange (NSE) ended in the negative territory following concerns shown by investors towards the increasing number of COVID-19 cases in Nigeria as well as weak economic conditions.
Reports at the weekend revealed that Nigeria had become the third African country to record over 10,000 cases of COVID-19 and this affected investors’ sentiment at the nation’s bourse. Due to losses recorded in four trading sessions, the NSE All Share Index (ASI) fell by 0.99 per cent while market capitalisation decreased by N186 billion to close the week at 24,826.75 points and N12.951 trillion respectively.
Further analysis by Daily Sun reveal that this is the second weekly decline in three weeks, as investors dumped heavyweight stocks which include Dangote Cement, MTNN and Nigerian Breweries. Consequently, the market’s year-to-date (ytd) and month-to-date (mtd) losses increased to -1.7 and -7.5 per cent, respectively.
Performance across sectors was bearish as 4 of the 6 indices declined week-on-week (w-o-w). The Industrial (+2.2 per cent) and Consumer Goods (+1.8 per cent) indices were the gainers, driven by price appreciation in BUA Cement (+6.0 per cent), Honeywell Flour (+17.4 per cent) and Nestle (+10.0 per cent).
On the flip side, the Oil & Gas index (-4.9 per cent) led the laggards due to losses in Sepalt (-10.0 per cent) and Japaul oil (-8.0 per cent). Similarly, the Banking (-3.1 per cent) and Insurance indices (-3.1 per cent) trailed on the back of price depreciation in Sterling Bank (-11.1 per cent), ETI (-8.3 per cent), Prestige (-18.6 per cent) and AIICO (-15.3 per cent). Price declines in MTNN (-1.6 per cent) and TRIPPLE G (-8.6 per cent) pushed the AFR-ICT index (-0.9 per cent) lower.
Meanwhile, a total turnover of 1.050 billion shares worth N10.125 billion in 19,576 deals were traded by investors, in contrast to a total of 1.103 billion shares valued at N9.876 billion that exchanged hands in the previous week in 16,616 deals.
The Financial Services industry (measured by volume) led the activity chart with 736.274 million shares valued at N5.472 billion traded in 9,776 deals; thus contributing 70.13 and 54.04 per cent to the total equity turnover volume and value respectively.
The Conglomerates industry followed with 69.496 million shares worth N334.478 million in 471 deals. The third place was the Consumer Goods industry, with a turnover of 66.380 million shares worth N1.351 billion in 3,130 deals.
Trading in the top three equities namely Guaranty Trust Bank Plc, FBN Holdings Plc and FCMB Group Plc. (measured by volume) accounted for 316.321 million shares worth N3.350 billion in 2,983 deals, contributing 30.13 and 33.08 per cent to the total equity turnover volume and value respectively.
Neimeth led the losers’ chart with 40.08 per cent to close the week at N1.54 per share. NPF Microfinance Bank dropped 25.13 per cent to close at N1.40, Prestige followed with 18.57 per cent to close at 0.57 kobo, AIICO lost 15.25 per cent to close at N1 while UACN decreased by 12.50 per cent to close at 0.91 kobo.
On the other hand, Honeywell Flour led the gainers’ chart with 17.39 per cent to close at N1.08 per share. Nestle was next with 10 per cent to close at N1,094.50, Cutix increased by 10 per cent to close at N1.76, Red Star Express rose by 9.09 per cent to close at N3.60 while Cornerstone garnered 7.84 per cent to close at 0.55 kobo.
Reacting to the performance of the market, analysts said that the fresh contagion worries have impacted markets across the globe making some investors a little less optimistic.
They, however, noted that the current stock prices remain attractive for bargain hunting even as the market resumes trading today.
Afrinvest, in its note sent to Daily Sun, said: “Although we are not optimistic of a rebound in market performance in the coming week due to poor investor sentiment, current stock prices are attractive for bargain hunting”. For their own part, Cordos Capital, said, “In our opinion, risks remain on the horizon due to a combination of the increasing number of COVID-19 cases in Nigeria and weak economic conditions. Thus, we continue to advise investors to trade cautiously and seek trading opportunities in only fundamentally justified stocks”.