SAT 09 JAN, 2021-theGBJournal- A total turnover of 3.394 billion shares worth N19.867 billion in 26,808 deals were traded by investors as the first trading week of 2021 ended in the red. Losses recorded on the second and last trading days eroded gains from the other trading days of the week.
Trading in the top three equities namely Champion Breweries Plc, Transnational Corporation of Nigeria Plc and Access Bank Plc (measured by volume) accounted for 2.144 billion shares worth N6.002 billion in 1,971 deals, contributing 63.18% and 30.21% to the total equity turnover volume and value respectively.
Accordingly, the All-Share Index declined by 0.4% w/w to close at 40,120.22 points. Activity levels were mixed, as trading volumes surged by 87.9% w/w while value traded declined by 23.5% w/w.
However, all other indices finished higher with the exception of NSE Premium, NSE Lotus II and NSE Industrial Goods which depreciated by 2.99%, 1.22% and 2.29% while the NSE ASeM and NSE Growth Indices closed flat.
Notably, selloffs in DANGCEM (-8.1%), GUINNESS (-5.0%), UNILEVER (-5.0%), and MTNN (-2.8%) drove the weekly loss. Accordingly, the YTD return stood at -0.4%. The performances across the sectors were broadly positive, save for the Industrial Goods (-0.6%) index; the Oil and Gas (+13.2%), Insurance (+9.5%), Banking (+3.2%) and Consumer Goods (+2.6%) closed positive.
In the short term, we believe positioning for FY 2020 dividends will continue to support buying activity in the market amid negative real returns in the fixed income market even as we do not rule out intermittent profit-taking.
However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.
Meanwhile, Global stocks kicked off the first trading week of 2021 on a positive note, as investor sentiment was buoyed by prospects of a smooth political agenda and additional stimulus by the incoming Biden administration.
Consequently, US (DJIA: +1.4%; S&P: +1.3%) stocks were set to close the week in the green after crossing uncharted territories. In Europe, the STOXX Europe (+2.4%) and FTSE 100 (+6.1%) were on course for a strong start to the year, as growth-sensitive cyclical stocks rallied on hopes for stronger economic recovery.
Asian (Nikkei 225: +2.5%; SSE: +2.8%) shares were on course to end the week with robust gains, as investors reacted to the news in U.S. Emerging markets (MSCI EM: +5.0%) stocks recorded robust gains driven largely by gains in China (+2.8%) while Frontier (MSCI FM: -0.2%) market stocks were on track to close lower following losses in Kuwait (-0.3%).
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