Equities market retreats as investors lose N118bn to profit-taking
BUACement, NB, banking stocks take hit
DESPITE IN CREASED PAR TICIPATION at the Nigerian equities market last week; negative sentiment fuelled by profit-taking by investors took tolls on the domestic equities market.
Broadly, investors parted with N118 billion of their stakes in equities as market capitalization slipped by 0.9 per cent to close at N13.05 trillion from the previous week’s close value of N13.168 trillion.
Higher decline of 1.0 per cent recorded in the AllShare Index (ASI), which tracks movement of share prices in the market. It shed 251.52 points to close at 25,016.30 basis points to close on Friday.
All other indices finished lower with the exception of NSE AFR Div Yield and NSE Consumer Goods Indices which appreciated by 1.20 per cent and 0.26 per cent respectively while NSE ASeM closed flat, according to statistics pulled from the official website of the Nigerian Stock Exchange (NSE).
Thus, the month-to-date (MTD) return settled at -1.0 per cent, as the year-to-date (YTD) loss increased to -6.8 per cent.
The general fall in equities value at the market was driven largely by -4.8 per cent fall in the price of BUA Cement shares and that of the Nigerian Breweries which contracted by 3.0 per cent, alongside some banking stocks.
Analysing by sectors, the general performance was broadly negative, as -3.7 per cent, -0.7 per cent and -0.4 per cent losses in the banking, oil and gas and consumer goods indices outweighed the positive performances in the Insurance and industrial goods which measured 2.4 per cent and 1.6 per cent respectively.
In their appraisal of the domestic equities market, analysts at Cordros Capital maintained that remain on the horizon due to a combination of the increasing number of COVID-19 cases in Nigeria and weak economic conditions.
“Thus, we continue to advise investors to trade cautiously and seek trading opportunities in only fundamentally justified stocks,” they said.
Elsewhere, market dealers expect profit-taking to continue, as breakout or breakdown at this consolidation level will confirm next market direction despite profit-taking, as investors’ positioning reveals confidence among market players, implying that opportunities are still available before the Q2-driven earnings expectation.
“Again, the current undervalued state of the market offers opportunities to position for the short, medium and long-term, which is why investors should target fundamentally sound, and dividend-paying stocks for possible capital appreciation going forward, says
Ambrose Omordion, chief research officer at InvestData Consulting Limited.
Meanwhile, share trading witnessed increased participation last week as volume and value traded
surged by 17.05 per cent and 74.45 per cent respectively.
A total turnover of 1.469 billion shares worth N23.553 billion in 22,911 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.255
billion shares valued at N13.501 billion that exchanged hands last week in 20,554 deals.
The financial services industry, measured by volume, led the activity chart with 861.775 million shares valued at N8.545 billion traded in 11,647 deals; thus contributing 58.66 per cent and 36.28 per cent to the total equity turnover volume and value respectively.
The consumer goods industry followed with 184.644 million shares worth N5.880 billion in 3,953 deals while the third place was the services industry, with a turnover of 119.238 million shares worth N270.084 million in 1,043 deals.
Investors’ favourite in terms of volume of trade were FBN Holdings Plc, Guaranty Trust Bank Plc and Zenith Bank Plc as they accounted for 456.576 million shares worth N6.940 billion in 5,921 deals, contributing 31.08 per cent and 29.47 per cent to the total equity turnover volume and value respectively.
In addition, investors traded 288,112 units of ETPs valued at N3.994 million in six deals during the
week, compared with a total of 150,008 valued at N359.831 million transacted in 14 deals previously.
They also pushed a total of 2,785 units federal government bonds valued at N3.116 million in six deals compared with a total of 5,225 valued at N5.875 million transacted last week in three deals.