SAT, 22 OCT, 2022-theGBJournal| The NGX All-Share Index logged its steepest decline in the year following bouts of profit-taking activities during the week. As a result, the All-Share Index fell by 6.7% w/w, to close at 44,396.73 points, its lowest point since 18 January (44,655.89 points).
Particularly, selloffs of top telecommunication player, AIRTELAFRI (-27.1%) underpinned the market’s performance. Consequently, the MTD loss increased to -9.4%, while the YTD return moderated significantly to +3.9%.
However, activity levels were positive, as trading volume and value increased by 90.7% w/w and 40.1% w/w, respectively. Sectoral performance was mixed as the Industrial Goods (+3.2%), and Banking (+1.2%) indices advanced, while the Insurance (-3.7%), Oil and Gas (-1.5%), and Consumer Goods (-0.9%) indices declined.
Overall, a total turnover of 938.020 million shares worth N16.701 billion in 15,700 deals was traded in the week by investors on the floor of the Exchange, in contrast to a total of 491.815 million shares valued at N11.922 billion that exchanged hands last week in 14,350 deals, according to the NGX Exchange data.
The Financial Services Industry (measured by volume) led the activity chart with 501.278 million shares valued at N5.080 billion traded in 8,279 deals; thus contributing 53.44% and 30.42% to the total equity turnover volume and value respectively.
The ICT Industry followed with 316.347 million shares worth N8.729 billion in 1,249 deals. The third place was the Oil and Gas Industry, with a turnover of 28.244 million shares worth N983.561 million in 846 deals.
Trading in the top three equities namely CWG Plc, Guaranty Trust Holding Company Plc and Fidelity Bank Plc. (measured by volume) accounted for 490.324million shares worth N2.905 billion in 2,860 deals, contributing 52.27% and 17.39% to the total equity turnover volume and value respectively.
With the significant moderation in the prices of bellwether stocks this week, we expect savvy investors to take advantage of this and make a re-entry into stocks with sound fundamentals and attractive dividend yields.
However, we do not rule out the possibility of continued profit-taking activities. As a result, we envisage a choppy trading pattern. Nonetheless, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.
Meanwhile, global stocks were broadly positive this week, as investors’ sentiments were shaped by impressive corporate earnings and the expectations that the Fed would reduce the pace of tightening.
Accordingly, US (DJIA: +2.4% and S&P 500: +2.3%) stocks are poised for another weekly gain as upbeat corporate earnings from Goldman Sachs Group Inc (GS.N), Johnson & Johnson (JNJ.N) and Lockheed Martin (LMT.N), and better-than-expected factory data fueled risk-on sentiments.
In the same vein, European equities (STOXX Europe: +0.5% and FTSE100: +0.7%) were on track to close higher on optimism that UK economic and political turmoil could ease.
Asian markets (Nikkei 225: -0.7% and SSE: -1.1%) posted negative performances as investors assessed the rising global interest rates, weak Asian currencies, and impact of the zero-Covid policy on China’s economy.
Elsewhere, the Emerging (MSCI EM: +0.2%) market closed higher following gains in India (+2.7%), while the Frontier (MSCI FM: -0.6%) market declined on the back of bearish sentiments in the Vietnamese (-4.0%) market.
Twitter-@theGBJournal| Facebook-The Government and Business Journal|email: gbj@govbusinessjournal.ng|govandbusinessj@gmail.com
