SAT 24 JULY, 2021-theGBJournal- A total turnover of 896.174 million shares worth N5.235 billion in 11,714 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.008 billion shares valued at N10.923 billion that exchanged hands last week in 17,297 deals, despite the shortened trading week due to the public holidays on Tuesday and Wednesday, the bulls regained dominance of the market.
Trading in the top three equities namely Jaiz Bank Plc, Sterling Bank Plc and Fidelity Bank Plc (measured by volume) accounted for 369.879 million shares worth N385.516 million in 785 deals, contributing 41.27% and 7.36% to the total equity turnover volume and value respectively.
During the week it was observed that investors flocked into the shares of TOTAL on the back of the impressive Q2-21 earnings release accompanied with an interim dividend of NGN4.00/s and (2) DANGCEM due to expectation of the second tranche of its share buyback programme.
Based on the preceding, the All-Share Index advanced by 1.9% w/w to close at 38,667.90 points. Accordingly, the MTD gain rose to 2.0%, while the YTD loss moderated to -4.0%. However, activity levels were weak, as trading volumes and value declined by -11.1% w/w and -52.1% w/w, respectively.
Specifically, investors’ interest in TOTAL (+21.0%), GUINNESS (+9.1%) and DANGCEM (+7.8%) were the primary drivers of the positive performance this week. Performance across sectors was broadly positive. Save for the Insurance (-0.7%) index that closed in the red; the Oil and Gas (+7.5%), Industrial Goods (+4.1%), Consumer Goods (+0.6%), and Banking (+0.4%) indices closed in the green.
In the week ahead, expect investors will be focused on the outcome of the MPC meeting to gain further clarity on the movement of yields in the FI market. It is also expected that the NGX floor to be flooded with corporate earnings as more companies publish their unaudited H1-21 numbers, accompanied by dividend declarations. This should provide respite for market performance.
Overall, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings for corporate earnings.
Meanwhile, global stocks were broadly bullish as the appetite for risk assets strengthened, following the renewed optimism about global economic recovery, which outweighed concerns over rising COVID-19 cases.
Consequently, U.S. (DJIA: +0.4%; S&P: +0.9%) stocks rebounded from the losses recorded in the prior week as a plethora of earnings reports boosted sentiments amid the rally in tech stocks. In Europe, the STOXX Europe (+1.0%) managed to eke out a weekly gain. In comparison, the FTSE 100 (0.0%) was set to end the week on a flattish note as investors traded cautiously following dovish comments from the ECB and concerns about the resurging Delta variant.
Asian markets posted mixed performances, with the Nikkei 225 (-1.6%) on track for a weekly loss as worries that the ongoing Tokyo 2020 Olympics could worsen the health crisis dampened investors sentiments.
Elsewhere, the SSE (+0.3%) gained marginally despite lingering concerns about Beijing’s crackdown as well as the surge in Covid-19 Delta variant cases. Emerging (MSCI EM: -1.0%) and Frontier (MSCI FM: -0.4%) markets stocks were on track to close lower following losses in South Korea (-0.7%) and Vietnamese (-2.4%) markets, respectively.
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