by Chinwendu Obienyi
Despite the mixed sentiments of other stock markets, Nigeria’s stock market performed admirably well as its market capitalization gained N449 billion to hit the N27 trillion mark amid top tier stocks at the local bourse appreciating in value.
Global stocks posted mixed performances this week as sentiments were shaped by positive economic data in the US and Europe and recession worries following a fresh round of hawkish comments from major central banks.
For instance, Asian markets posted negative performances with the Japanese (Nikkei 225: -4.7 per cent), and Chinese (SSE: -3.9 per cent) equities suffering huge losses as investors assessed a hawkish policy pivot by the Bank of Japan (BOJ), Japan’s inflation data and a spike in COVID-19 cases in China.
Elsewhere, the Emerging market (MSCI EM: +0.7 per cent) closed positively, primarily driven by gains in Brazil (+4.6 per cent), which offset losses in China (-3.9 per cent). On the other hand, the Frontier market (MSCI FM: -1.6 per cent) index declined due to selloffs in the Vietnamese (-3.1 per cent) market.
Accordingly, US equities (DJIA: +0.3 per cent; S&P 500: -0.8 per cent) swayed between gains and losses as investors weighed the course of monetary policy from the US Fed against positive growth data. While European stocks (STOXX Europe: +1.9 per cent and FTSE 100: +0.6 per cent) were on course to close the week in green as investors digested a slew of earnings announcements and economic data from the region.
Although trading sessions on the Nigerian Exchange Limited (NGX) had been experiencing bullish dominance for a few weeks now, the positive performance meant investors had cause to smile home during a trading week supported with gains save for the second trading session when the market closed flat.
Consequently, the NGX All-Share Index (ASI) appreciated by 0.79 per cent to close the week at 49,706.09 points while investors gained N449 billion as market capitalisation closed at N27.074 trillion from N26.625 trillion.
Notably, bargain hunting in GTCO (+7.4 per cent), Stanbic (+8.6 per cent), FBN Holdings (+8.3 per cent), BUA Foods (+2.5 per cent), and Geregu (+9.0 per cent) spurred the positive outturn. Based on the preceding, the Month-to-Date (MTD) and Year-to-Date (YTD) gains rose to +4.3 per cent and +16.4 per cent, respectively.
Sectoral performance was broadly positive following gains in the Banking (+1.5 per cent), Consumer Goods (+1.0 per cent), Oil and Gas (+0.9 per cent), and Insurance (+0.3 per cent) indices. On the other hand, the Industrial Goods index closed flat.
Commenting on the performance of the market, analysts at Cordros Research said, “As the year draws to an end, we expect yield-seeking investors to take positions in stocks with attractive dividend yields ahead of the 2022FY dividend declarations. However, we advise investors to take positions in only fundamentally sound stocks as the fragility of the macroeconomic environment remains a significant headwind for corporate earnings”.
For their part, analysts at Afrinvest, said, “In the next trading week, we anticipate soft gains in the absence of negative catalysts”.
Meanwhile, a total turnover of 860.933 million shares worth N16.134 billion in 14,502 deals was traded by investors on the floor of the exchange, in contrast to a total of 814.089 million shares valued at N12.204 billion that exchanged hands in the previous week in 15,488 deals.
The Financial Services Industry (measured by volume) led the activity chart with 360.234 million shares valued at N3.772 billion traded in 6,905 deals; thus contributing 41.84 and 23.38 per cent to the total equity turnover volume and value respectively.
The Construction/Real Estate Industry followed with 302.200 million shares worth N927.033 million in 261 deals while the Consumer Goods Industry recorded a turnover of 39.078 million shares worth N1.685 billion in 2,593 deals.
Trading in the top three equities namely UPDC Real Estate Investment Trust, FBN Holdings Plc and Guaranty Trust Holding Company Plc (measured by volume) accounted for 440.239 million shares worth N3.015 billion in 2,038 deals, contributing 51.13 per cent and 18.69 per cent to the total equity turnover volume and value respectively.
