FRI 30 JULY, 2021-theGBJournal- Sentiments turned bearish as profit-taking activities dominated market performance throughout the week. Specifically, the local bourse recorded losses in three of the five trading sessions.
Notably, profit taking in BUACEMENT (-4.2%), GUARANTY (-3.7%) and ZENITHBANK (-1.2%) drove the weekly loss. Consequently, the All-Share Index shed -0.3% w/w to close at 38,547.08 points.
Accordingly, the MTD return moderated to +1.7%, while the YTD loss increased to -4.3%. Activity levels were stronger than the prior week, as trading volume and value rose significantly by 53.8% w/w and 125.8% w/w, respectively.
Overall, A total turnover of 1.374 billion shares worth N11.823 billion in 22,982 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 896.174 million sharesvalued at N5.235 billion billion that exchanged hands last week in 11,714 deals, according to NGX Exchange data.
Sectoral performance was broadly negative, following declines in the Industrial Goods (-1.3%), Insurance (-1.1%) and Banking (-0.9%) indices, and gains in the Oil and Gas (+3.8%) and Consumer Goods (+0.1%) indices.
The Financial Services Industry (measured by volume) led the activity chart with 715.394 million shares valued at N4.745 billion traded in 10,274 deals, thus contributing 52.06% and 40.13% to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 212.340 million shares worth N517.613 million in 1,060 deals. The third place was Oil and Gas Industry, with a turnover of 153.440 million shares worth N1.597 billion in 3,076 deals.
Trading in the top three equities namely Transnational Corporation Of Nigeria Plc, Oando Plc and Fidelity Bank Plc (measured by volume) accounted for 378.863 million shares worth N995.477 million in 2,998 deals, contributing 27.57% and 8.42% to the total equity turnover volume and value respectively.
We believe investors will digest the flurry of earnings released this week to gauge the extent of improvement in company’s fundamentals given the tepid recovery in macroeconomic conditions.
As a result, we expect portfolio rebalancing activities into cyclical stocks and positioning in dividend-paying stocks to shape market performance in the week ahead.
With the MPC meeting out of the way, we believe developments in the macroeconomic landscape and corporate actions will shape the direction of the local bourse.
Meanwhile, global stocks posted broadly negative performances as the rout in Asia due to clampdown on financial technology and the surge in Covid-19 cases unnerved investors’ concerns about a speedy global recovery.
Accordingly, U.S (DJIA: +0.1%; S&P: +0.2%) eked out marginal gains despite the disappointing second-quarter GDP, weekly jobless claims data and losses in heavy-weight tech stocks late in the week. In Europe, the STOXX Europe (-0.4%) and FTSE 100 (-0.4%) were set to end the week with marginal losses as investors traded cautiously following Fed’s dovish comments amid positive GDP data for the Eurozone.
In Asia, the Nikkei 225: (-1.0%) and SSE: (-4.3%) suffered losses on the back of Beijing’s widening tech-sector crackdown amid renewed concerns over the coronavirus pandemic. Emerging markets (MSCI EM: -1.2%) stocks also mirrored the selloff in global equities consequent on the losses in China (-4.3%). In comparison, Frontier (MSCI FM: +1.7%) market stocks were set for a weekly gain following Kuwait (+3.3%) market rally.
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