By Chinwendu Obienyi
Nigeria’s stock market failed to sustain the positive momentum in the month of February despite being adjudged one of the best performing stock exchanges in Africa in the month of January 2021.
This is coming after investors counted losses to the tune of N1.38 trillion as against N1.13 trillion they gained in January.
Daily Sun investigation revealed that transactions on the floor of the Nigerian Stock Exchange (NSE) witnessed an opening value of 41.147.39 points (All Share Index) and closed at 39,799.89 points while market capitalisation closed the month under review at N20.823 from an opening value of N22.186 trillion.
Furthermore, the market’s year-to-date (ytd) closed the month at -1.17 per cent compared to 5.32 per cent recorded in January. According to analysts who spoke to Daily Sun, the rising yields in the fixed income market weighed heavily on investors’ sentiment. At the close of transactions on Friday, the main index fell below the 40,000 psychological mark, declining by 0.96 per cent week-on-week (w/w) to close at 39,799.89 points and this has been the theme of the market due to sell pressure in high capitalized stocks.
Senior Research analyst at Cordros Capital, Gbolahan Ologunro, said, transactions on the domestic bourse would pick up albeit in a “curvy” pattern once it resumes for the new month. “In the week ahead, we expect the NSE floor to be flooded with corporate earnings as more companies publish their audited FY 2020 numbers, accompanied by dividend declarations. We believe this should provide respite for market performance.
However, we expect intermittent profit-taking activities to continue due to lingering concerns about yield elevation in the FI market. As a result, we think the local bourse will likely exhibit a zig-zag pattern.
Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings”, he said.
For its part, Afrinvest research’s weekly note, said, “in the coming week, we expect trading sessions to be a mix of bargain hunting and sustained sell-offs. The direction of yields in the fixed income market would also influence trades especially given the sustained increase in marginal rates at the OMO auction this week”.
Meanwhile, a total turnover of 1.930 billion shares worth N20.656 billion in 24,687 deals were traded in contrast to a total of 1.541 billion shares valued at N18.235 billion that exchanged hands last week in 22,752 deals. This meant that the volume and value of stocks traded increased by 25.3 per cent and 13.3 per cent w/w respectively.
The Financial Services Industry (measured by volume) led the activity chart with 1.450 billion shares valued at N15.070 billion traded in 14,236deals; thus contributing 75.11 and 72.96 per cent to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 154.906 million shares worth N179.673 million in 798 deals while the Consumer Goods Industry recorded a turnover of 111.782 million shares worth N2.270 billion in 3,865 deals.
Trading in the top three equities namely Wema Bank Plc, Zenith Bank Plc and First Bank Holding Plc(measured by volume) accounted for 782.167million shares worth N8.914billion in4,624deals, contributing 40.52 and 43.15 per cent to the total equity turnover volume and value respectively.