SAT 18 SEPT, 2021-theGBJournal- Though the local bourse started the week sour, positive sentiments returned to the market as investors renewed buying interests in dividend-paying stocks.
Accordingly, the All-Share Index inched up 0.1% to close at 38,943.87 points. Consequently, the Month-to-Date and Year-to-Date return moderated to -0.7% and -3.3%, respectively. The NGX All-Share Index and Market Capitalization appreciated by 0.06% and 0.05% to close the week at 38,943.87and N20.290 trillion respectively.
NGX Exchange data shows that a total turnover of 856.289 million shares worth N10.752 billion in 15,663 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.426 billion shares valued at N13.073 billion that exchanged hands last week in 19,315 deals.
Trading in the top three equities namely Access Bank Plc, Universal Insurance Plc and Wema Bank Plc (measured by volume) accounted for 211.151 million shares worth N789.843 million in 1,403 deals, contributing 24.66% and 7.35% to the total equity turnover volume and value respectively.
However, activity levels were weaker than the prior week, as trading volumes and value declined by -40.3% w/w and -17.9% w/w, respectively. Notably, buying interest in GTCO (+3.5%), MTNN (+1.5%), and ACCESS (+1.1%) drove the weekly gain.
On the other hand, sectoral performances were broadly negative following losses in the Oil and Gas (-3.4%), Banking (-0.8%), Insurance (-0.6%) and Consumer Goods (-0.2%) indices. Elsewhere, the Industrial Goods index closed flat.
The Financial Services Industry (measured by volume) led the activity chart with 583.038 million shares valued at N3.971 billion traded in 7,894 deals; thus contributing 68.09% and 36.93% to the total equity turnover volume and value respectively.
The Consumer Goods Industry followed with 62.961 million shares worth N3.197 billion in 2,579 deals. The third place was ICT Industry, with a turnover of 45.745 million shares worth N1.646 billion in 775 deals.
We expect the lull in the local bourse to persist until positive triggers in the form of lower FI yields and improved dollar liquidity spur buying interest from domestic and FPI investors.
Cordros Research said, they expect risk-averse investors to recalibrate their portfolio towards fundamentally sound stocks with attractive dividend yields in the week ahead.
‘’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.’’
Overall, 21 equities appreciated in price during the week, lower than 25 equities in the previous week. 38 equities depreciated in price, higher than 34 equities in the previous week, while 96 equities remained unchanged lower than 97 equities recorded in the previous week.
Meanwhile, Global stocks were broadly bullish as investors gauged the resilience of the global recovery to the prospect of reduced Federal Reserve stimulus amid increased regulatory risks from China. Accordingly, US (DJIA: +0.4%; S&P: +0.3%) stocks held steady as investors traded cautiously ahead of Fed’s Reserve meeting next week amid the stronger-than-expected retail sales data for August.
Likewise, in Europe, the STOXX Europe (+0.5%) and FTSE 100 (+0.2%) were on track for weekly gains as news that Britain was mulling easing travel restrictions spurred a rebound in travel and luxury stocks.
Asian markets posted mixed performances, as the Nikkei 225 (+0.4%) ended the week higher, on vaccination progress and hopes of possible stimulus under a new Prime Minister.
Conversely, the SSE (-2.4%) declined as the debt crisis at China’s Evergrande Group and Beijing’s latest push to rein in private industries dented sentiments. Emerging markets (MSCI EM: -2.5%) stocks were undermined by losses in China (-2.4%). Elsewhere, Frontier (MSCI FM: +0.4%) market stocks were on track to close higher following gains in Kuwait (+0.9%).
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