Equities post 1.3% pullback as investors take profit
Investors profit-taking on the Nigerian Exchange Limited (NGX) downed the equities market segment in four active days of trading last week.
The market capitalisation opened for trading at N20.409trillion, N266billion or 1.3per cent decline from N20.143trillion it opened for trading, while the NGX also depreciated by 1.30 per cent to 38,648.91 basis points from 39,156.28 basis points it opened for trading last week.
It was a four-day trading last week as the Federal Government declared Monday 14th June 2021 as Public Holiday to mark the Democracy Day celebrations.
Although the market closed positive on three of the week’s four trading sessions, the gains proved insufficient in pushing the market to a green close for last week. Investors took full advantage of the gains recorded over the last two weeks in booking profit on bellwether stocks.
Specifically, foreign investors’ sell-offs of Africa Plc that dropped by 10 per cent and profit-taking in Okomu Oil that depreciated bt 9.4per cent and Stanbic IBTC Holdings that declined by 4.9 per cent drove the weekly loss.
Consequently, the equities market Month-Till-Date (MTD) return decreased to 0.5per cent, while the YearTill-Date (YTD) loss increased to –4per cent. Activity levels were mixed, as trading volume declined by 9.4per cent week-on-week (w/w), while trading value rose by 8.8per cent w/w.
On the other hand, sectoral performance was broadly positive as the Banking (+1.1per cent), Oil and Gas (+1.0per cent), Insurance (+0.8per cent), and Consumer Goods (+0.2pr cent) indices recorded gains. Elsewhere, the Industrial Goods index closed flat.
According to the NGX weekly report, a total turnover of 981.147 million shares worth N10.384 billion in 15,001 deals were traded last week by investors on the floor of the Exchange, in contrast to a total of 1.058 billion shares valued at N12.831 billion that exchanged hands in prior’s week 17,854 deals.
According to the weekly report, “The Financial Services Industry (measured by volume) led the activity chart with 695.803 million shares valued at N5.178 billion traded in 8,616 deals; thus contributing 70.92per cent and 49.86 per cent to the total equity turnover volume and value respectively.
“The Consumer Goods Industry followed with 75.879 million shares Investors’ profit-taking downs equities market by N266bn in 4 days worth N1.227 billion in 2,263 deals. The third place was Conglomerates Industry, with a turnover of 67,430 million shares worth N367.306 million in 612 deals.
“Trading in the top three equities namely Zenith Bank Plc, Sterling Bank Plc and Wema Bank Plc (measured by volume) accounted for 265.649 million shares worth N2.450 billion in 2,742 deals, contributing 27.08per cent and 23.60per cent to the total equity turnover volume and value respectively.”
The report stated that a total of 101,419 units valued at N1.610 million were traded last week in 14 deals compared with a total of 1,026 units valued at N160,140.75 transacted prior’s week 8 deals.
“We expect market performance to remain mixed in the week ahead as investors rotate their portfolio towards dividendpaying stocks, which intermittent profit-taking activities would match.
“Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings,” analysts at Cordros securities explained in their weekly report
