Equities Market Rebounds On Improved Half-year Corporate Earnings

The equities market rebounded last week as investors reacted positively to the beginning of the half year earnings season.

Although the market was opened for only three days following the public holiday declared on Tuesday and Wednesday to mark the Eid-el-Kabir celebration by Muslims, the Nigerian Exchange (NGX) All-Share Index (ASI) appreciated by 1.9 per cent compared with a decline of 0.12 per cent the previous week. Specifically, the NGX ASI closed higher at 38,667.90, while market capitalisation closed at N20.147 trillion.

Market analysts attributed to positive performance to investors’ reactions to improved results for the half-year ended June 30, 2021. Unilever Nigeria Plc, Total Nigeria Plc and United Capital Plc reported their unaudited results, showing improvement in all performance indicators. Total Nigeria Plc recommended an interim dividend of N4.00 per share.

According to analysts at Cordros Securities, this week, investors will be focused on the outcome of the Monetary Policy Committee (MPC) meeting to gain further clarity on the movement of yields in the fixed income market.

“We also expect the NGX floor to be flooded with corporate earnings as more companies publish their unaudited H1-21 numbers, accompanied by dividend declarations. We believe this should provide respite for market performance. Overall, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings for corporate earnings,” they said.

Meanwhile, investors traded 896.174 million shares worth N5.235 billion in 11,714 deals last week, down from 1.008 billion shares valued at N10.923 billion that exchanged hands the previous week in 17,297 deals.

The Financial Services Industry (measured by volume) led the activity chart with 718.570 million shares valued at N3.009 billion traded in 6,223 deals; thus contributing 80.18 per cent and 57.48 per cent to the total equity turnover volume and value respectively. The Consumer Goods

followed with 46.437 million shares worth N948.489 million in 1,856 deals. The third place was Conglomerates Industry, with a turnover of 39.798 million shares worth N207.132 million in 366 deals. Trading in the top three equities namely; Jaiz Bank Plc, Sterling Bank Plc and Fidelity Bank Plc accounted for 369.879 million shares worth N385.516 million in 785 deals.

A total of 43 appreciated higher than 29 in the previous week, while 16 equities depreciated in price lower than 22 equities in the preceding week. Cutix Plc led the price gainers for the week with 32.5 per cent, trailed by Total Nigeria Plc with 20.9 per cent.

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