Bulls stage comeback as investors exploit attractive entry to gain N500bn

• Experts divided on outlook
  

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After five weeks of losing supremacy battle to the bears, bulls at the Nigerian Exchange Limited (NGX) finally staged impressive comeback as investors leveraged attractive entry points claw N500 billion in four days.

The initial spate of losses had left the prices of many stocks with good fundamentals and liquidity undervalued, thus creating a good chance for re-entrance.

Seizing the entry opportunity during the Easter holiday-shortened week, the equity market posted 1.98 per cent growth, equivalent to N500 billion profit for investors.

Consequently, the equity’s market capitalisation soared to N25.639 trillion, while the NGX All-share Index (ASI) that tracks price movements added 920.99 points to close the week 47,558.45 basis points.

The impressive performance was propelled by investors’ positive reactions to MTNN’s PSB license approval amid bargain hunting across tickers with attractive entry windows. The month to date return turned positive to 1.2 per cent, while year-to-date (YtD) waxed stronger at 11.2 per cent at the end trading on Thursday.

Notably, bargain hunting in the shares of Nigerian Breweries (+11.8 per cent), Zenith Bank (+8.7 per cent), GTCO (+6.5 per cent), Okomu Oil (+5.6 per cent), MTN Nigeria (+3.4 per cent) and DANGCEM (+2.4 per cent) spurred the weekly gain.

Sectoral performance was also broadly positive following 5.6 per cent gain in the banking index; 1.9 per cent uptick in Consumer Goods index; 1.6 per cent growth each in Industrial Goods and Oil and Gas indices; while the insurance sector saw 1.1 per cent appreciation.

• Experts predict sustained uptrend, mixed outlook

Following the development in the market this week, experts in some quarters are assuring that the bull’s party is not crashing any time soon with more profit expectations in the coming days, even as many others see otherwise fuelled by the fear of profit-booking.

“In the near term, we expect the bulls to retain dominance given the positioning for the Q1-22 earnings announcements, even as institutional investors continue to search for clues on the direction of yields in the Fixed Income market,” says Cordros Capital analysts in a note available to Business Metrics.

Elsewhere, experts at Investdata Consulting Limited led by Ambrose Omordion forecast mixed trend with profit-taking underway.

“This is amid repositioning as market players digest 2021 audited financials and revaluation of quoted companies ahead of Q1 2022 earnings expectation.

“This is expected to support the uptrend during this earnings season, amidst the rebound of oil prices, just as the market continues to interpret economic data in relationship with the crude oil price and other factors, in the midst of profit-taking and portfolio rebalancing,” they noted.

Above all, market experts at various investment house have advised investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.

• Weekly Trade Data

Meanwhile, during the week under review, a total turnover of 1.247 billion shares worth N22.372 billion in 23,406 deals were traded in contrast to 1.137 billion shares valued at N10.812 billion that exchanged hands last week in 23,471 deals.

This is tantamount to improvement in activity level and the week turnover as traded volume rose by 9.68 per cent while value ballooned by 106.92 per cent.

Measured by volume, the Financial Services Industry led the activity chart with 975.776 million shares valued at N10.678 billion traded in 13,097 deals; thus contributing 78.24 per cent and 47.73 per cent to the total equity turnover volume and value respectively.

The Consumer Goods Industry followed with 65.187 million shares worth N1.752 billion in 2,725 deals while the third place was the Services Industry, with a turnover of 42.614 million shares worth 135.745 million in 1,172 deals.

Also on the traded volume chart, trading in the top three equities namely Guaranty Trust Holding Company Plc, Zenith Bank Plc and Fidelity Bank Plc accounted for 429.657 million shares worth N7.786 billion in 5,871 deals, contributing 34.45 per cent and 34.80 per cent to the total equity turnover volume and value respectively.

Investors traded a total of 14,242 units of Exchange Traded Products (ETPs), valued at N492,229.40 were traded this week in 14 deals compared with a total of 76,043 units valued at N1.251 million transacted last week in 31 deals.

Similarly, they exchange 245,278 units of bonds valued at N253.116 million were traded this week in 18 deals compared with a total of 21,314 units valued at N22.012 million transacted last week in 12 deals.