Dividend news, MPC outcome rescue stocks from bears’ grip as investors gain N436bn

investors gain
  • As market halts 6-week downtrend

 

The six-week losing streak in the market came to a halt at the end of trading activities last week, as investors reacted positively to juicy dividends declared by blue-chip companies such as DANGCEM and STANBIC even.

Apart from the ubiquitous dividend news and the avalanche of financial reports that help investment with a sense of direction during the week, the outcome of the Monetary Policy Committee (MPC) meeting held during the week also contributed to the reemergence of the bulls at the end of the week.

Consequently, capitalization of equity investments at the Nigerians bourse appreciated by N436 billion to close higher at N20.518 trillion as the All Share Index (ASI) that tracks share price movement at the Exchange advanced by 833.81 points equivalent to 2.17 per cent to close northward at 39,216.20 basis points. As a result, the Year-to-Date (YtD) loss moderated to -2.6 per cent.

The gain of the week was notably spurred by bargain hunting in bellwethers stocks such as Stanbic, BUA Cement, Dangote Cement and MTN Nigeria which gained by 30 per cent, 5.1 per cent, 2.3 per cent, and 1.9 per cent respectively.

However, activity levels were mixed, as trading volumes declined by 34.67 per cent week-on-week while value traded rose by 10.58 per cent.

Sectoral performance was positive as all sectors closed in the green. The Industrial Goods (+2.9 per cent) index led the gainers’ chart, followed by Consumer Goods (+1.4 per cent), Insurance (+0.9 per cent), Oil and Gas (+0.7 per cent) and Banking (+0.2 per cent) indices.

According to analysts at the Cordros Capital, with the MPC meeting now out of the way, “we expect investors’ attention to be focused on the bond auction results as they keep an eye on the movement of yields in the fixed income market.

The analysts also predicted that going forward, events in the macroeconomic landscape would determine sentiments in the market as may bring fortune or spell doom for investors.

“As the FY 2020 earnings season gradually fades away, we 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.”

Trading Details for the week.

A total turnover of 1.530 billion shares worth N21.311 billion in 20,016 deals were traded during the week by investors on the floor of the Exchange, in contrast to a total of 2.342 billion shares valued at N19.272 billion that exchanged hands the previous week in 20,173 deals.

The Financial Services Industry (measured by volume) led the activity chart with 1.096 billion shares valued at N12.294 billion traded in 11,106 deals; thus contributing 71.67 per cent and 57.69 per cent to the total equity turnover volume and value respectively.

The Consumer Goods Industry followed with 177.673 million shares worth N3.577 billion in 3,139 deals, while the third place was Conglomerates Industry, with a turnover of 99.609 million shares worth N216.997 million in 856 deals.

Trading in the top three equities namely Union Bank Nig. Plc, Guaranty Trust Bank Plc and Dangote Sugar Refinery Plc (measured by volume) accounted for 687.616 million shares worth N9.496 billion in 3,022 deals, contributing 44.95 per cent and 44.56 per cent to the total equity turnover volume and value respectively.

A total of 25,905 units ‘of Exchange Traded Fund (ETFs) valued at N208.954 million were traded this week in 7 deals compared with a total of 435,459 units valued at N2.351 billion transacted in 29 deals previously.

Similarly, investors yarded a total of 93,124 units of bonds valued at N97.453 million in 47 deals compared with a total of 295,829 units valued at N304.859 million transacted in 20 deals the previous week.