SAT 26 JUNE, 2021-theGBJournal- The bears continued to dictate proceedings in the local bourse as the market suffered its second consecutive weekly loss. Save for the penultimate trading day; the local bourse recorded losses in all of the week’s trading sessions.
Notably, sell-offs in AIRTELAFRI (-8.6%), DANGCEM (-3.9%), BUACEMENT (-3.4%) and MTNN (-1.2%) dragged the All-Share index 2.6% lower to 37,658.26 points.
Consequently, the MTD and YTD return dipped further into negative territory, settling at -2.0% and -6.5%, respectively.
Total turnover of 1.006 billion shares worth N10.330 billion in 17,165 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 981.147 million shares valued at N10.384 billion that exchanged hands last week in 15,001 deals, according to NGX Exchange data.
Activity levels were mixed, as trading volume rose by 2.5% w/w, while trading value declined by 0.5% w/w. Elsewhere, Sectoral performance was broadly positive, following gains in the Banking (+0.9%), Consumer Goods (+0.6%) and Oil and Gas (+0.1%) indices, and declines in the Industrial Goods (-3.3%) and insurance (-0.8%) indices.
The Financial Services Industry (measured by volume) led the activity chart with 646.404 million shares valued at N5.199 billion traded in 8,996 deals, thus contributing 64.26% and 50.33% to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 108.587 million shares worth N2.257 billion in 3,213 deals. The third place was Conglomerates Industry, with a turnover of 80.257 million shares worth N179.134 million in 614 deals.
Trading in the top three equities namely Zenith Bank Plc, Transcorp Hotels Plc and Access Bank Plc (measured by volume) accounted for 207.341 million shares worth N2.510 billion in 2,774 deals, contributing 20.61% and 24.30% to the total equity turnover volume and value respectively.
Thirty-three (33) equities appreciated in price during the week, lower than Thirty-eight (38) in the previous week. Thirty-seven (37) equities depreciated in price higher than Twenty-five (25) equities in the previous week, while eighty-five (85) equities remained unchanged lower than ninety-three (93) equities recorded in the previous week.
We believe a “choppy theme” will be the overarching theme in the local bourse as investors continue to watch out for clues on the direction of yields in the FI market. Following the moderation in the share prices of bellwether stocks, we expect the bulls to make a re-entry in dividend-paying stocks ahead of H1-2021 dividend declarations, which intermittent profit-taking activities would match.
However, we reiterate the need for positioning in only fundamentally sound stocks as the macroeconomic environment’s fragility remains a significant headwind for corporate earnings.
Meanwhile, Global stocks staged a massive comeback this week as investors’ sentiments were bolstered by renewed optimism of a strong rebound in the global economy. Furthermore, risk sentiments were buoyed by Biden’s bipartisan USD579.00 infrastructure deal. In the U.S., the DJIA (+2.7%) and S&P (+2.4%) rallied after U.S President Biden announced a bipartisan deal on infrastructure spending amid dovish comments from the Federal Reserve.
In Europe, the STOXX Europe (+1.1%) and FTSE 100 (+1.5%) posted robust gains as investors had an upbeat assessment of the latest monetary policy decision from the BOE amid the positive impact of the weakness in GBP.
Likewise, Asian markets posted positive performances, with the Japanese (Nikkei 225: +0.4%) and Chinese (SSE: +2.3%) markets taking a cue from the rally on Wall Street. Similarly, the Emerging (MSCI EM: +0.5%) and Frontier (MSCI FM: +0.3%) stocks also mirrored the upbeat mood across global equities consequent on the gains in China (+2.3%) and a marginal gain in Kuwait (+1.0%) market, respectively.
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