SAT 29 JAN, 2022-theGBJournal- The bulls continued to dictate proceedings on the local bourse, as the gradual release of corporate earnings bolstered buying interests in dividend-paying stocks.
A total turnover of 1.448 billion shares worth N19,080 billion in 22,557 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 1.858 billion shares valued at N47.486 billion that exchanged hands last week in 20,861 deals, according to NGX Exchange data.
The NGX All-Share Index and Market Capitalization appreciated by 0.55% and 0.54% to close the week at 46,205.05 and N24.898 trillion respectively.
Notably, bargain hunting in ETI (+44.8%), GUINNESS (+14.0%), INTBREW (+18.0%), AIRTELAFRI (+10.0%) and TOTALENERGIES (+8.6%) spurred the weekly gain. Consequently, the YTD return improved to +8.2%.
Activity levels were weaker than the prior week, as trading volume and value declined by 22.0% and 59.8% w/w, respectively. Analysing by sectors, the Banking (+4.8%), Oil and Gas (+3.5%) and Consumer Goods (+2.0%) indices recorded gains while the Industrial Goods (-5.1%) and Insurance (-3.1%) indices closed in the red.
The Financial Service Industry (measured by volume) led the activity chart with 793.120 million shares valued at N8.151 billion traded in 10,947 deals; thus contributing 54.77% and 42.72% to the total equity turnover volume and value respectively. The ICT Industry followed with 215,543 million shares worth N3.740 billion in 1,468 deals. The third place was The Conglomerates Industry, with a turnover of 98.299 million shares worth N190.248 million in 889 deals.
Trading in the top three equities namely Guaranty Trust Holding Company Plc, Courtville Business Solutions Plc and Chams Plc (measured by volume) accounted for 308.076 million shares worth N2.871 billion in 2,225 deals, contributing 21.27% and 15.05% to the total equity turnover volume and value respectively.
With the outcome of the MPC meeting aligning with market expectations amid negative real returns in the fixed income market, we expect investors to continue to cherry-pick stocks with attractive dividend yields. However, we advise investors to take positions in only fundamentally justified stocks as the fragility of the macroeconomic environment remains a significant headwind for corporate earnings.
Global equities remained under pressure as investors’ sentiments were shaped by a slew of positive economic data, mixed corporate earnings, geopolitical tensions, and hawkish comments from US Federal Reserve.
Accordingly, US stocks (DJIA -0.3%; and S&P 500: -1.6%) erased earlier gains as investors reacted negatively to the latest comments from Fed on monetary policy tightening. Elsewhere, European equities posted mixed performances, with the STOXX Europe (-0.9%) set for a weekly loss as investors traded cautiously following the recent hawkish turn by the Federal Reserve amid Russia’s/Ukraine tensions.
Conversely, the FTSE 100 (+0.8%) was buoyed by a positive reaction to strong earnings from Apple and US GDP data. Elsewhere, Asian markets (Nikkei 225: -2.9%; and SSE: -4.6) recorded huge losses as Chinese tech companies led losses amid growing concerns that the US Federal Reserve may raise interest rates faster than expected.
Likewise, the Emerging market (MSCI EM: -4.2%) and Frontier market (MSCI FM: -1.6%) stocks settled lower consequent upon losses in China (-4.6%) and Kuwait (-0.5%), respectively.
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