Bears stage comeback as stocks shed N157bn in four days

Bears stage comeback as stocks shed N157bn in four days

The Customs Street remained moody and gloomy for stock investors who staked a sum of N19.039 billion on 1.445 billion shares of quoted companies at the Nigerian Stock Exchange (NSE) last week, during which the market opened for four days.

The local bourse could not consolidate the gains recorded in the prior week as profit-taking dominated activities on three of the week’s four trading days ahead of the Easter holidays.

Note that the market opened for four trading days during the week as the Federal Government of Nigeria declared Friday 2nd April 2021 (Good Friday) and Monday 5th April 2021 (Easter Monday) public holidays to commemorate the 2021 Easter celebrations.

Consequently, equities investors parted with N157 billion loss as the All-Share Index (ASI) shed 299.46 points or 0.76 per cent to close at 38,916.74 while the aggregate value of equities at the market closed lower at N20.361 trillion after falling by the same percentage points.

Notably, profit-taking in bellwether stocks; DANGCEM (-4.4 per cent), STANBIC (-2.0 per cent), ACCESS (-3.0 per cent), and UNILEVER (-2.6 per cent) drove the weekly loss.

Sectoral performance was broadly negative, as the Industrial Goods, banking and oil and gas indices shed by -2.1 per cent, -1.3 per cent and -0.3 per cent respectively. On the flip side, the Insurance and consumer goods indices posted +2.8% per cent and +1.9 per cent gains in that order.
Activity levels mirrored the decline in the market’s broad gauge, as trading volumes and value declined by 5.6 per cent and 10.7 per cent week-on-week, respectively.

Analysts’ Remarks

Analysts at Cordros Capital held that heading into the second quarter, investors are expected to rebalance their portfolios based on an assessment of corporate earnings released during Q1-21 whilst keeping an eye on the movement of yields in the Fixed Income market.

“Considering that the FY 2020 earnings season has run its course, we now expect investors’ sentiment to be influenced by developments in the macroeconomic landscape and corporate actions.

‘Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings,” they said in their weekly report obtained  by Business Metrics.

In an insight into the Nigerian stock market, Investdata Analysts shared similar view that the mixed trend would continue amidst portfolio reshuffling and adjustment ahead of Q1 numbers and economic data in the face of rising dividend and fixed income market yields

They added; “Similarly, the pullbacks offer bargain hunters and income investors another opportunity to reposition in high dividend yields and undervalued stocks, while quarterly numbers to support recovery. This is based on the fact that the rising fixed income yields may not be enough to scare all investors away from the equity space.”

They however offered that the way to go for smart investors is to target dividend-paying stocks and fundamentally sound companies with growth prospects in 2021, looking the way of mispriced equities.

According to them, this is especially given the rising oil prices that have so far supported the economy and equity market, despite the seeming improvement in the fixed income yield which had remained at negative real rate of return due to the subsisting high inflation.

Trading Details

source: NSE

A total turnover of 1.445 billion shares worth N19.039 billion in 17,400 deals were traded during the week by investors on the floor of the Exchange, in contrast to a total of 1.530 billion shares valued at N21.311 billion that exchanged hands the previous week in 20,016 deals.

The Financial Services Industry (measured by volume) led the activity chart with 1.033 billion shares valued at N13.369 billion traded in 9,179 deals; thus contributing 71.51 per cent and 70.22 per cent to the total equity turnover volume and value respectively.

The Conglomerates Industry followed with 131.153 million shares worth N578.393 million in 811 deals, while the third place was Consumer Goods Industry, with a turnover of 92.937 million shares worth N1.750 billion in 2,892 deals.

Trading in the top three equities namely Guaranty Trust Bank Plc, Union Bank Nig. Plc and Wema Bank Plc (measured by volume) accounted for 670.354 million shares worth N10.331 billion in 1,990 deals.

A total of 108,271 units of exchange traded funds (ETFs) valued at N445.285 million were traded this week in 16 deals compared with a total of 25,905 units valued at N208.954 million transacted last week in 7 deals.

Investors also pushed a total of 50,358 units bond valued at N55.298 million were traded this week in 14 deals compared with a total of 93,124 units valued at N97.453 million transacted last week in 47 deals.

Meanwhile, 42 equities appreciated in price during the week, lower than 48 equities in the previous week. Conversely, 22 equities depreciated in price, higher than 18 decliners recorded in the previous week, while 98 equities remained unchanged, higher than 96 equities recorded in the preceding week.