Activities at the equities market of the Nigerian Exchange Limited (NGX) closed lower last week, as profit-taking activities dominated the market amidst weak breadth and elevated volatility.
Accordingly, the NGX All-Share Index dropped by 2.45 per cent week-on-week (W-o-W) to close at 101,858.37 basis points. Also, market capitalisation lost N1.42 trillion to close the week at N55.735 trillion and as expected, sectoral performance for the week exhibited a negative trend.
The NGX Banking and NGX Industrial indices led the losses, declining by 6.86 per cent and 4.16 per cent, respectively. Also, NGX Insurance, NGX Oil & Gas, and NGX Consumer Goods indices recorded a weekly loss of 1.48 per cent, 0.40 per cent and 0.14 per cent.
The market breadth for the week was negative as 20 equities appreciated, 68 equities depreciated, while 66 equities remained unchanged. Meyer led the gainers table by 60.70 per cent to close at N6.91, per share.
Juli followed with a gain of 44.29 per cent to close at N1.01, while Geregu Power went up by 19.00 per cent to close to N675.90, per share. Conversely, Eterna led the decliners table by 18.78 per cent to close at N17.95, per share. Abbey Mortgage Bank followed with a loss of 18.39 per cent to close at N2.44, while Unity Bank declined by 17.79 per cent to close at N2.31, per share.
Overall, a total turnover of 2.478 billion shares worth N47.856 billion in 54,982 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 3.893 billion shares valued at N95.147 billion that exchanged hands the prior week in 69,117 deals.
However, analysts have stated that the current bearish trend will persist as investors seek refuge in fixed-income instruments amid dividend expectations.
Last week witnessed a notable correction in the local bourse, marking the first downturn in 16 weeks, propelled by sell sentiments, particularly from institutional investors. The motive behind this shift in sentiment appears to be portfolio rebalancing for safety.
This adjustment precedes the expectations from the Monetary Policy Committee (MPC) meeting later this month and follows the recent surge in treasury rates to a nearly seven-year high. This portends that the Central Bank of Nigeria (CBN) is sending signal to a return to orthodox monetary policy tools to curb inflation. The move to entice foreign investors back into Nigeria’s economy adds to the thought.
In the new week, analysts at Cowry Assets Management Limited anticipated “the current bearish trend to persist as investors seek refuge in fixed-income instruments due to the high yields as seen recently amid dividend expectations and high market volatility ahead of the January Consumer Price Index (CPI) data from the NBS and the impending Monetary Policy Committee meeting this February.
“However, a pullback at this juncture is expected to strengthen upside potential. Amidst all these, we continue to advise investors to take a position in stocks with consistent track records of dividend payments and strong fundamentals and growth prospects to support earnings growth.”