With global recession fears, index dips further by 0.14 per cent

AS the risk of an economic downturn heightens, weak sentiment persists in the equities sector of the Nigerian Exchange Limited ( NGX) , with the local bourse suffering its second consecutive weekly loss last week.

Consequently, the NGX Allshare index and market capitalisation depreciated by 0.14 per cent to close the week at 51,705.61 and N27.875 trillion respectively.

Similarly, all other indices finished lower except the NGX CG, NGX Premium

NGX Banking, NGX Pension, NGX Afr bank value, NGX Oil/ Gas and NGX Lotus indices, appreciating by 0.86 per cent, 1.5 percent 0.33 per cent, 0.4 per cent, 0.16 per cent, 0.32 per cent and 0.55 per cent while, the NGX Asem and NGX Growth indices closed flat.

Profit- taking activities in Bua cement (- 3.2 per cent), Dangote cement (- 0.7 per cent), NB (- 5.5 per cent), and

WAPCO (- 3.2 per cent), led the weekly loss. Consequently, the Month- toDate and Year- to- Date return settled at - 2.4 per cent and + 21 per cent respectively.

Chief Research Office of Investdata Consulting, Ambose Omordion lamented that oil prices have continued to oscillate in the international market, trading at $ 109.9 per barrel, as fear of global recession lingers.

According to him, there is palpable worry that these chronic high energy prices will continue depressing the global economy, heightening inflationary pressures across the globe and fueling a weak economic outlook.

He added that the concern is also influencing the monetary policies of central banks, as they move to checkmate the impacts of the Russia- Ukraine conflict on the global economy to avoid economic recession.

Omordion said Nigeria’s soaring inflation is a potent threat to its fixed income market and investment yields.

However, he predicted that the development might be an indication that there will be a reversal of funds flowing to the equities space in no distant time as institutional investors balance their portfolios.

Also, analysts at Cordros Capital said: "We expect the choppy trading pattern that played out this week to persist in the week ahead, as investors continue to cherrypick stocks with attractive dividend yields, and at the same time remain cautious about leaving gains in the market.