FRI 22 APRIL, 2022-theGBJournal | Bargain hunting was the overarching theme during the week as investors flocked into bellwether stocks ahead of Q1-22 corporate earnings releases.
Notably, investors’ buying interest in GUINNESS (+17.5%), WAPCO (+10.6%), NB (+8.3%), INTBREW (+7.1%), AIRTELAFRI (+4.7%), SEPLAT (+4.6%), and FLOURMILL (+4.6%) supported market performance.
Consequently, the All-Share Index rose by 2.0% w/w to close at 48,459.65 points. The MTD and YTD return increased to +3.2% and +13.4%, respectively.
However, activity levels were weaker than the prior week, as trading volumes and value declined by 7.1% w/w and 26.2% w/w, respectively.
Across our sectoral coverage, the Oil and Gas (+6.4%), Consumer Goods (+3.3%), Industrial Goods (+1.7%), and Banking (+0.6%) indices closed positive, while the Insurance (-0.1%) index was the sole loser.
In the week ahead, we expect the NGX’s floor to be flooded with results as the Q1-22 earnings season commences in full swing. Thus, the local bourse is likely to close positive next week as we expect decent earnings releases across the board to temper selling activities by investors reluctant to leave gains in the market.
Notwithstanding, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.
Meanwhile, mixed sentiments dominated global equities as investors digested a batch of corporate earnings, hawkish comments from the Federal Reserve Chairman, and developments in the ongoing war between Russia and Ukraine.
Accordingly, US (DJIA; +1.0% and S&P 500; 0.0%) stocks posted marginal gains as positive reactions to corporate earnings were tempered by concerns that the Federal Reserve will accelerate the pace of its monetary tightening.
European markets (STOXX Europe: -0.5% and FTSE 100: -0.2%) were on course to close lower as investors fretted about the possibility of slowing economic growth on the back of aggressive monetary policy tightening amid the Russia/Ukraine crisis. On the other hand, Asian markets posted mixed performances as the SSE (-3.9%) recorded huge losses following selloffs in tech stocks as investors assessed measures to tackle economic headwinds from Covid-led lockdowns.
Elsewhere the Japanese (Nikkei 225; 0.0%) closed the week unchanged amid a dearth of positive triggers. On the other hand, Elsewhere, the Emerging (MSCI EM: -2.3%), and Frontier (MSCI FM: -1.7%) markets declined following the selloffs in China (-3.9%) and Kuwait (-0.1%), respectively.
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