FRI, APRIL. 21 2023-theGBJournal |The NGX Exchange witnessed another subdued performance despite closing marginally higher on three out of the four trading sessions this week.
The downward slide was primarily due to sell pressures on MTNN (-6.7%), amid strong bargain hunting on ACCESSCORP (+11.9%) and TRANSCORP (+45.0%) – we observed strong buying interest in TRANSCORP, supported by positive reactions to the recent announcement of the acquisition of a significant stake (5.52%) in the company by one of Nigeria’s prominent billionaires, Femi Otedola.
Eventually, the All-Share Index shed 1.0% w/w, with the MTD and YTD returns settling at -5.3% and +0.2%, respectively.
All other indices finished lower as well with the exception of NGX Main Board, NGX Pension, NGX Insurance, NGX AFR Div. Yield, NGX MERI Growth and NGX Consumer Goods which appreciated by 0.73%, 1.44%, 1.41%, 0.80%, 4.37% and 0.17% respectively while the NGX ASeM, NGX Growth and NGX Sovereign Bond indices closed flat
Analysing activity levels, traded volume and value improved by 41.2% w/w and 45.6% w/w, respectively, with TRANSCORP accounting for about 30.7% and 16.2% of the total trading volume and value.
A total turnover of 3.920 billion shares worth N15.620 billion in 16,856 deals was traded by investors , in contrast to a total of 2.824 billion shares valued at N10.964 billion that exchanged hands last week in 15,686 deals.
Trading in the top three equities namely Transnational Corporation Plc, Access Holdings Plc and Fidelity Bank Plc (measured by volume) accounted for 3.302 billion shares worth N7.999 billion in 2,375 deals, contributing 84.23% and 51.21% to the total equity turnover volume and value respectively.
Elsewhere, sectoral performance was largely bearish, following declines in the Banking (-2.5%), Oil and Gas (-1.4%), and Industrial Goods (-0.2%) indices and gains in the Insurance (+1.4%) and Consumer Goods (+0.2%) indices.
The Conglomerates Industry (measured by volume) led the activity chart with 3.050 billion shares valued at N5.964 billion traded in 1,379 deals; thus contributing 77.81% and 38.18% to the total equity turnover volume and value respectively.
The Financial Services Industry followed with 707.962 million shares worth N6.175 billion in 8,430 deals. The third place was the Consumer Goods Industry, with a turnover of 43.155 million shares worth N1.026 billion in 2,223 deals.
Thirty-five equities appreciated in price during the week higher than eighteen equities in the previous week. Thirty-one equities depreciated in price lower than thirty nine in the previous week, while ninety equities remained unchanged, lower than ninety-nine equities recorded in the previous week.
In the coming week, we expect the NGX’s floor to be flooded with results as the Q1-23 earnings season commences in full swing. Thus, we expect decent earnings releases across board to temper selling activities and support positive sentiments on the bourse.
In the medium term, we expect investors’ sentiments to be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed-income space.
Overall, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.
Meanwhile, the major themes in the global equities market this week have centred around quarterly corporate reports, economic data (UK inflation data and China GDP data), and mixed signals from the Federal Reserve officials on the trajectory of interest rate hikes.
US equities (DJIA: +0.0%; S&P 500: +0.4%) were partly stable Thursday as investors parsed a bevy of corporate earnings and the latest assessment on the US economy as reported by the Federal Reserve’s monthly ‘Beige Book’ survey.
Likewise, European equities (STOXX Europe: +0.1%; FTSE 100: +0.2%) were moderately positive, as investors assessed the latest UK inflation print while shifting focus to the Federal Reserve rate-hiking decision expected on 3 May.
In Asia, Chinese equities (SSE: +0.9%) were boosted by positive economic growth data, and prospects of another round of policy stimulus. In a similar vein, Japanese equities (Nikkei 225: +0.6%) gained over the week, riding on Wall Street’s positive sentiments.
In conclusion, the Emerging (MSCI EM: -1.0%) and Frontier (MSCI FM: -0.3%) market indices declined following losses in Taiwan (-1.4%) and Vietnam (-0.3%), respectively.
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