Owing to the steady easing of lockdown, investors trading on the floor of the Nigerian Stock Exchange (NSE) gained a total of N113 billion in the month of July.
This is in contrast to the N399 billion recorded in June, owing to profit taking, even as earnings from quoted companies spurred investor interest across Cement and Tier I bank stocks and driving the market to a positive close (+0.9 per cent) in July. The market capitalisation, which measures the value of all equities, rose from N12.769 trillion to N12.882 trillion, about 0.8 per cent increase, while the NSE All-Share Index rose by the same margin from 24,479.22 to 24,693.73 points.
According to market operators, the positive performance of the market was linked to bargain hunting and positioning ahead of corporate results for the half-year ended June 30, 2020.
While some investors were trading cautiously waiting for the corporate results, some were taking advantage of the low prices to enter the market, hence the gain recorded in the month under review. Despite the positive performance, analysts at Cordros Capital, said: “Our view continues to favour cautious trading as 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 seek trading opportunities in only fundamentally justified stocks”.
Currently, the year-to-date (ytd) loss eased to -6.7 per cent after some form of bullish momentum from the previous week was sustained as investors continued to react to better than expected earnings and bargain-buy of relatively cheap stocks at the close of transactions on Friday.
Specifically, GT Bank (+8.2 per cent), Stanbic (+10.0 per cent), Seplat (+12.8 per cent) and Zenith Bank (3.7 per cent) were the primary drivers of the overall gain, with the All-Share index closing the week at 1.4 per cent higher at 25,041.89 points while market capitalisation settled at N13.063 trillion.
Performance across sectors of the market was broadly positive with the Banking (+4.9 per cent), Oil & Gas (+4.8 per cent), Consumer Goods (+0.7 per cent) and Industrial Goods (+0.1 per cent) indices recording gains as the Insurance (-0.3 per cent) index was the sole loser.
Further analysis showed that the total turnover of 1.065 billion shares worth N10.798 billion in 20,482 deals were traded last week by investors in contrast to a total of 421.984 million shares valued at N5.337 billion that changed hands the previous week in 11,801 deals. The Financial Services industry (measured by volume) led the activity chart with 677.301 million shares valued at N5.070 billion traded in 10,386 deals to account for 63.59 per cent and 46.95 per cent of the total turnover and value respectively.
The Conglomerates followed with 153.384 million shares worth N580.216 million in 894 deals, while the Industrial Goods recorded a turnover of 57.404 million shares worth N861.263 million in 1,671 deals.
Trading in the top three equities namely FBN Holdings Plc, UACN Plc and Access Bank Plc. (measured by volume) accounted for 320.196 million shares worth N1.802 billion in 2,639 deals, contributing 30.06 and 16.69 per cent to the total equity turnover volume and value respectively.
Reacting to the development, Afrinvest, in their weekly assessment of the market, said: “In the coming week, we anticipate a mixed performance as investors react to more corporate earnings releases. However, we expect to see some profit-taking activities given the bullish performance this week”.