Eq­ui­ties’ prices to con­tinue down­ward spi­ral -- an­a­lysts

Business a.m. - - FINANCE & INVESTMENT - Sto­ries: Ades­ola Afo­labi

THE DOWN WARD PRICE MOVE­MENT wit­nessed in the eq­ui­ties mar­ket in re­cent ses­sions is ex­pected to pro­ceed this week on the im­pact of bar­gain hunt­ing in fun­da­men­tally sound stocks be­ing coun­tered by sub­se­quent sell-offs.

Although the neg­a­tive per­for­mance has per­sisted for a se­cond con­sec­u­tive week, an­a­lysts say, the bear­ish hold on the do­mes­tic bourse is as a re­sult of sus­tained sell-offs in large cap­i­talised stocks weigh­ing on over­all per­for­mance.

A re­view of per­for­mance ac­tiv­i­ties in the week ended 23 Novem­ber showed that the NSE All-Share In­dex closed in the red on 3 of the 4 trad­ing ses­sions fall­ing 1.2 per­cent week-on-week (W-o-W) to set­tle at 31,678.70 points.

This pro­pelled an ex­pan­sion in the year-to-date loss to -17.2 per­cent while mar­ket cap­i­tal­i­sa­tion shed N138.6 bil­lion last week to close at N11.6 tril­lion.

Vol­ume and value traded showed ac­tiv­ity level for the week strength­ened, as av­er­age vol­ume and value traded in­creased 24.8 per­cent and 150.7 per­cent to 320.5 mil­lion units and N5.8 bil­lion re­spec­tively. Zenith Bank in a se­ries of un­usual heavy trad­ing topped the mar­ket’s vol­ume and value sold dur­ing the week.

648.1 mil­lion units of the shares were ex­changed, mak­ing it the week’s top traded stock. Di­a­mond Bank fol­lowed with 138.1 mil­lion units and Oando emerged the third most traded stock by vol­ume with a sale of 95.3 mil­lion units.

Zenith again topped the stocks with the high­est value sold in the course of the week with shares worth N15.6 bil­lion thus ac­count­ing for 62.2 per­cent of the to­tal value traded in the week, Guar­anty Trust Bank came se­cond in top­most traded stocks by value with the sale of N1.6 bil­lion worth of shares while Nige­rian Brew­eries also sold N1.6 bil­lion worth of shares.

The week started on a pos­i­tive note as buy in­ter­est in the se­cond and fourth big­gest com­pa­nies on the NSE, namely Nes­tle and Nige­rian Brew­eries lifted the bench­mark by 51 ba­sis points on Mon­day.

How­ever, sell pres­sures in the NSE’s largest, third largest and ninth largest com­pany, namely Dangote Ce­ment, GTB and ETI re­versed pre­vi­ous gains as the All Share In­dex (ASI) shed 78 ba­sis points on Wed­nes­day.

On Thurs­day, the ASI marginally gained 5 ba­sis points, fol­low­ing price ap­pre­ci­a­tions in Flour­mill, Zenith Bank and GTB.

On Thurs­day, a ma­jor spike in vol­ume traded on Thurs­day was ob­served as a cross deal in Zenith (600m units at N24.00) was recorded. On Fri­day, the mar­ket closed in the red, as sell-offs in Dangote Ce­ment, Nige­rian Brew­eries and Wapco WAPCO dragged the in­dex 96 ba­sis points south­wards. As a re­sult, the bench­mark in­dex lost 1.2 per­cent W-o-W.

Dur­ing the end of the week, per­for­mance across sec­tors was mixed as 3 of 5 in­dices ad­vanced. The insur- ance in­dex gained the most, up 1.4 per­cent on the back of price ap­pre­ci­a­tion in Con­ti­nen­tal Re-in­sur­ance (+6.4%) and AIICO (+1.6%). Sim­i­larly, the con­sumer goods and the oil & gas in­dices gained 1.1 per­cent and 0.3 per­cent W-oW re­spec­tively due to in­vestors tak­ing po­si­tions in Nes­tle (+1.4%), In­ter­na­tional Brew­eries (+1.8%), Mo­bil (+10.0%) and To­tal (+0.2%).

On the flip side, the in­dus­trial and bank­ing in­dices de­clined by 5.3 per­cent and 0.8 per­cent W-o-W re­spec­tively due to sell-offs in Dangote Ce­ment (-4.2%), WAPCO (-12.5%), GTB (-1.4%) and Ac­cess Bank (-3.9%).

In­vestor sen­ti­ment strength­ened with mar­ket breadth in­creas­ing to 1.2x from 0.7x in the pre­vi­ous week fol­low­ing 28 stocks that ad­vanced against 23 that de­clined.

The best-per­form­ing stocks for the week were Pres­tige As­sur­ance (+41.1%), PZ Cus­sons (+18.3%) and Flour­mill (+15.1%) while Ikeja Ho­tel (-18.5%), WAPCO (-12.5%) and Law and Union In­sur­ance (-8.8%) led the losers’ chart for the week.

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