SAT 09 OCT, 2021-theGBJournal- A total turnover of 2.179 billion shares worth N21.963 billion in 22,438 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 2.187 billion shares valued at N16.183 billion that exchanged hands last week in 14,377 deals.
However, bargain hunting in banking stocks was the overarching theme during the week as investors flocked into Tier-1 names ahead of Q3-21 corporate earnings releases.
Based on the preceding, the All-Share Index advanced by 1.6% w/w to close at 40,868.36 points. As a result, the MTD and YTD return increased to +1.6% and +1.5%, respectively.
Notably, bargain hunting in large-cap stocks namely; FBNH (+21.7%), AIRTELAFRI (+6.3%), and ZENITHBANK (+4.5%), drove the weekly gain. However, activity levels were mixed, as trading volumes decreased by 1.4% w/w, while trading value grew by 34.8% w/w.
Trading in the top three equities namely FBN Holdings Plc, Universal Insurance Plc and Fidelity Bank Plc (measured by volume) accounted for 1.161 billion shares worth N12.338 billion in 3,460 deals, contributing 53.28% and 56.18% to the total equity turnover volume and value respectively
Across sectors, the Banking (+4.5%), Oil and Gas (+0.2%) and Industrial Goods (+0.1%) posted gains while the Insurance (-1.5%) and Consumer Goods (-0.5%) indices declined.
In the week ahead, we do not expect the bulls to repeat the flawless victory that pervaded the local bourse this week as the bears are likely to book profit across most counters. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.
Elsewhere, positive sentiments resurfaced across global markets after two weeks of jitters. Although the U.S job market report released late in the week showed weakness in the labour market recovery, investors’ sentiments were buoyed by abated fears of a potential debt default in the world’s largest economy.
In U.S, the DJIA (+1.2%) and S&P (+1.0%) were set for weekly gains as buying sentiments improved following the Senate’s decision to temporarily raise the Treasury Department’s debt ceiling by USD480.00 until December.
In Europe, the (STOXX Europe: +1.0%; & FTSE 100: +0.9%) were set to end the week higher as the surge in energy prices eased off gradually, amid the positive sentiments on Wall Street. Asian markets posted mixed performances as the Nikkei 225: (-2.5%) erased gains accumulated earlier in the week following lingering concerns on China’s Evergrande. After reopening from a week-long National holiday, the SSE (+0.7%) shares posted a weekly gain fueled by a rally in tech and financial stocks amid easing political tensions between China and United States.
Emerging (MSCI EM: +0.5%) and Frontier (MSCI FM: +0.6%) market stocks also closed higher following bullish sentiments in China (+0.7%) and Nigeria (+1.6%), respectively.
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