Investors Cautious As Equities Market Drops N54bn WoW

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Last week, the Nigerian Exchange Limited (NGX) equities market primarily demonstrated a bearish trend in four out of five trading sessions as investors had negative sentiment trading down the overall market capitalisation by N54 billion on its Week-on-Week (WoW).

 

Specifically, the market capitalisation of traded equities nosedived by N54 billion to close the week at N55.508 trillion as the NGX All-Share Index declined by 0.11 per cent W-o-W to close at 98,125.73 basis points.

 

Most indices closed in negative territory across various sectors. The NGX Industrial Goods index recorded a weekly gain of 0.01 per cent.

 

Conversely, the NGX Banking index fell by 6.51 per cent week over week. The NGX Oil & Gas index decreased by 6.49 per cent; the NGX-Insurance index dropped by 3.98 per cent, while the NGX-Consumer Goods index was down by 1.29 per cent week over week.

 

Market breadth for the week was negative as 28 equities appreciated in price, 51 depreciated in price, and 76 remained unchanged. International Energy Insurance led the gainers table by 11.49 per cent to close at N1.65 per share. McNichols followed with a gain of 9.89 per cent to close at N1.00, while Custodian Investment went up by 9.68 per cent to close at N10.20 per share.

 

On the other side, PZ Cussons Nigeria led the decliners’ table by 22.16 per cent to close at N21.60 per share. NEM Insurance followed with a loss of 18.36 per cent to close at N8.45, while Eterna declined by 18.32 per cent to close at N11.15 per share.

 

Overall, investors on the exchange floor traded 1.652 billion shares worth N42.677 billion in 38,123 deals last week, compared to 2.187 billion shares valued at N50.667 billion that exchanged hands the prior week in 45,277 deals.

 

The Financial Services Industry led the activity chart, with 979.479 million shares valued at N16.647 billion traded in 20,708 deals, contributing 59.30 per cent and 39.01 per cent to the total equity turnover volume and value, respectively. The Conglomerates Industry followed with 239.825 million shares worth N2.879 billion in 2,178 deals, while the Consumer Goods Industry traded a turnover of 148.685 million shares worth N3.525 billion in 4,757 deals.

 

Trading in the top three equities, namely Custodian Investment, Guaranty Trust Holding Company (GTCO), and Access Holdings (measured by volume), accounted for 500.343 million shares worth N11.768 billion in 6,551 deals, contributing 30.29 per cent and 27.57 per cent, respectively, to the total equity turnover volume and value.

 

Meanwhile, analysts expected the Nigerian equities market to be mixed this week, despite continued selloffs.

 

The local stock market endured another challenging week, characterised by downbeat sentiment among investors reacting to the latest consumer price inflation report from the National Bureau of Statistics (NBS) and speculations surrounding the forthcoming Monetary Policy Committee (MPC) meeting.

 

The benchmark index experienced a slight decline, reflecting ongoing portfolio rebalancing influenced by first-quarter earnings and the dividend payment season. This was set against a backdrop of evolving market dynamics and fundamentals.

 

Analysts at Cowry Assets Management Limited said the market is expected to maintain a weak sentiment as investors digest the latest economic data from the statistics bureau.

 

“The anticipated outcome of the upcoming MPC meeting, likely to result in a modest 100 basis points rate hike, could further dampen market sentiment. Despite the current market weakness and mixed sector performance, the oversold conditions and mixed technical indicators suggest potential buying opportunities for value investors aiming to capitalise on low prices and valuations. Meanwhile, we continue to advise investors on taking positions in stocks with sound fundamentals,” Cowry said.

 

This week, analysts at Afrinvest Limited said, ‘We expect the negative sentiment to persist as macroeconomic headwinds continue to dampen investors’ interest.’

 

For his part, Ambrose Omordion, the chief operating officer of InvestData Consulting Limited, said, ” We expect mixed sentiments to continue as players continue to digest April CPI, low price attraction, dividend investing, and reactions to Q1 numbers as Insurance corporate earnings are expected with dividend announcements and CPI report today while taking advantage of pullbacks to position and rebalancing portfolio.”

 

He noted that “this is amid the volatility and pullbacks that add more strength to upside potential. As such, investors should take advantage of price corrections and look at the trends and events across the globe and domestically.”

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