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Nigerian Stock Index Losses 1% to Extend Losing Streak



Nigerian Stock Index Losses 1% to Extend Losing Streak

The local stock market witnessed another subdued performance despite closing marginally higher on three out of the four trading sessions last week.

Recall that the Federal Government of Nigeria had declared Friday 21st April 2023 and Monday 24th April 2023 as Public Holidays to mark the Eid el-Fitr celebration

Specifically the Nigerian Exchange Limited (NGX) All-Share Index (ASI) and Market Capitalization depreciated by 1.08% to close the week at 51,355.74 basis points and N27.963 trillion respectively

The downward slide was primarily due to sell pressures on MTN Nigeria, losing -6.7% in its share price, amid strong bargain hunting on ACCESSCORP (+11.9%) and TRANSCORP (+45.0%).

Particularly, the trading statistics showed strong buying interest in the shares of TRANSCORP, supported by positive reactions to the recent announcement of the acquisition of a significant stake (5.52%) in the company by one of Nigeria’s prominent billionaires, Femi Otedola.

Eventually, the All-Share Index shed 1.0% week-on-week, with the month-to-date (MTD) and year-to-date (YTD) returns settling at -5.3% and +0.2%, respectively.

Elsewhere, sectoral performance was largely bearish, following -2.5% decline in the Banking index, followed by -1.4% fall in Oil and Gas index, trailed by -0.2% depreciation in Industrial Goods index. On the flip side, Insurance and Consumer goods indices closed in the green territory after gaining +1.4% and +0.2% respectively.

Trade Distribution

During the week under review, a total turnover of 3.920 billion shares worth N15.620 billion in 16,856 deals was traded by investors on the floor of the Exchange, in contrast to a total of 2.824 billion shares valued at N10.964 billion that exchanged hands the preceding week in 15,686 deals.

In terms of volume of trade, the Conglomerates Industry led the activity chart with 3.050 billion shares valued at N5.964 billion traded in 1,379 deals; thus contributing 77.81% and 38.18% to the total equity turnover volume and value respectively.

The Financial Services Industry followed with 707.962 million shares worth N6.175 billion in 8,430 deals, while the third place was the Consumer Goods Industry, with a turnover of 43.155 million shares worth N1.026 billion in 2,223 deals.

Meanwhile, volume trading in the top three equities namely Transnational Corporation Plc, Access Holdings Plc and Fidelity Bank Plc) accounted for 3.302 billion shares worth N7.999 billion in 2,375 deals, contributing 84.23% and 51.21% to the total equity turnover volume and value respectively.

As investors resume trading Tuesday

Meanwhile, investors will be returning the floor of the exchange on Tuesday to commence of a new trading week.

Market analysts have expressed high expectations that  in the coming week, the NGX’s floor would be flooded with results as the Q1-23 earnings season commences in full swing.

“Thus, we expect decent earnings releases across board to temper selling activities and support positive sentiments on the bourse,” say analysts ate Cordros Capital in a note made available to BUSINESS METRICS.

“In the medium term, we expect investors’ sentiments to be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed-income space,” the added.

Overall, market experts issued advisory to investors to position in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.

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