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WEEKLY UPDATE: Investors Lose N137 Billion on Equities

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Investors Lose N137 Billion on Equities

Trading activities in the Nigerian equity market ended last week on a negative note tat rub off investors N137 billion.

The depressing experience during the week was an extension of negative sentiment from the previous week when the bears took hold of the market.

As the Nigerian Exchange Limited (NGX) closed last week, market capitalization dipped to N26.686 trillion while the All-Share Index (ASI) that measures share price movements also plunged by 0.44% to close lower at 49,475.42 basis points.

Although, losses in the prices of some 39 stocks led to the collective decline, negative price movements in some banking stocks burdened the NGX the most during the week. Such stocks include First Bank of Nigeria Holdings (-5.7%), ACCESSCORP (-6.2%), UBA (-6.0%), ZENITHBANK (-1.5%) and UBN (-4.2%).

Sectoral performance was grossly negative as all the five major sectors wore red. The Banking index shed -3.3%; followed by the Insurance index that lost -2.6%; while Consumer Goods, industrial goods and oil & gas indices shed -0.3%, -0.2% and -0.2% respectively.

Similarly, investors were less active during the week as activity levels, that is, traded volume and value declined by 24.3% and 14.1% respectively, relative to the preceding week.

Specifically, they traded total turnover of 719.398 million shares worth N8.004 billion in 17,444 deals on the floor of the exchange, in contrast to a total of 949.819 million shares valued at N9.329 billion that exchanged hands the previous week in 18,525 deals.

Trade distribution

The Financial Services Industry (measured by volume) led the activity chart with 411.407 million shares valued at N3.943 billion traded in 9,471 deals; thus contributing 57.19% and 49.26% to the total equity turnover volume and value respectively.

The ICT Industry followed with 177.815 million shares worth N955.781 million in 1,573 deals while the third place was the Conglomerates Industry, with a turnover of 36.577 million shares worth N2.332 billion in 2,425 deals.

Trading in the top three equities namely Courteville Business Solutions Plc, Zenith Bank Plc and Access Holdings Plc (measured by volume) accounted for 278.293 million shares worth N1.984 billion in 3,038 deals, contributing 38.68% and 24.78% to the total equity turnover volume and value respectively.

A total of 2,172 units of ETP valued at N352,773.56 were traded this week in 18 deals compared with a total of 3,952 units valued at N1.692 million transacted last week in 32 deals.

In the bond segment of the NGX, investors traded a total of 15,945 units valued at N16.238 million during the week in 15 deals compared with a total of 219,620 units valued at N243.115 million transacted in 30 deals, the previous week, indicating a sharp fall in turnover.

Remarks

Investment experts expect alpha-seeking investors to rotate their portfolios towards cyclical stocks that delivered decent earnings during the Q2-22 earnings season amid the yield uptick in the Fixed income market.

“However, we think the absence of a near-term catalyst will likely skew overall market sentiments to the negative side, particularly as the political space gets heated.

“Notwithstanding, we reiterate the need for positioning in only fundamentally sound stocks as the unimpressive macro environment remains a significant headwind for corporate earnings,” analysts at Cordros Capital said.

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