Bears drag stock index below psychological 40,000 points
The local bourse was not immune to the rout in global equities as bears maintained firm grip on the market, defying prediction of a rally on the back of reported earnings.
The market recorded its fourth consecutive weekly loss, amid growing concerns about the rising yields in the fixed income market.
Again, the Nigerian Treasury Bills auction results wherein stop rates rose by an average of 254 basis points to 3.67 per cent (from 2.33 per cent at the last auction) also weighed on investors sentiment.
Accordingly, the All-Share Index (ASI) fell below the 40,000 psychological mark, declining by 0.96 per cent week-on-week to close at 39,799.89 basis points after shedding 386.81 points.
Similarly, this amounted to N203 billion loss for investors as market capitalization slipped by the same percentage point as the ASI to close the week lower at N20.823 trillion.
Consequently, the year-to-date (YtD) return dipped further in the negative territory, settling at -1.2 per cent.
However, activity levels were strong, as trading volumes and value rose by 25.33 per cent and 13.3 per cent respectively.
Notably, sell-offs in large-cap stocks; NB (-11.9 per cent), LAFARGE (-7.6 per cent), MTNN (-3.3 per cent) and DANGSUGAR (-2.7 per cent) drove the weekly loss.
The sectoral performance was broadly negative. Save for the Oil and Gas index that gained by 1.0 per cent) and Banking with 0.7 per cent uptick, the Insurance, consumer goods and industrial goods indices fell by -4.9 per cent, -3.2 per cent and per cent -0.5 per cent respectively.
Analysts predicted that in the week ahead, the NSE floor would be flooded with corporate earnings as more companies publish their audited full year 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 fixed income 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,” analysts at Cordros Capital said.
Meanwhile , a total turnover of 1.930 billion shares worth N20.656 billion in 24,687 deals were traded during the week by investors on the floor of the Exchange, in contrast to a total of 1.541 billion shares valued at N18.235 billion that exchanged hands previously in 22,752 deals.
Measured by traded volume, the financial services industry led the activity chart with 1.450 billion shares valued at N15.070 billion traded in 14,236 deals; thus contributing 75.11 per cent 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 third place was Consumer Goods Industry, with 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 782.167 million shares worth N8.914 billion in 4,624 deals, contributing 40.52 per cent and 43.15 per cent to the total equity turnover volume and value respectively.
A total of 159,764 units of Exchange Traded Products (ETPs) valued at N1.251 billion were traded last week in 20 deals compared with a total of 1.054 million units valued at N7.902 billion transacted previously in 49 deals.
A total of 21,438 units of bond assets valued at N23.282 million were traded during the week in 18 deals compared with a total of 8,613 units valued at N12.566 million transacted before in 2 deals.