FRI 09 JULY, 2021-theGBJournal- A total turnover of 1.348 billion shares worth N12.140 billion in 21,581 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.021 billion shares valued at N14.145 billion that exchanged hands last week in 17,565 deals.
But the local bourse was not immune to the rout in global equities, as profit-taking activities in the last two trading sessions of the week (Thur: -0.1%; Fri: -1.2%) completely wiped off the week’s gains and pushed the market into the red.
Accordingly, the All-Share Index fell below the 38,000 psychological mark, as it declined by 0.6% w/w to 37,994.19 points. Notably, selloffs in AIRTELAFRI (-10.0%) and DANGSUGAR (-3.0%) drove the weekly loss.
The MTD and YTD return settled at 0.2% and -5.7%, respectively. On activity levels, trading volume rose by 32.0% w/w, while trading value declined by 14.2% w/w.
Trading in the top three equities namely Fidelity Bank Plc, FBN Holdings Plc and Zenith Bank Plc (measured by volume) accounted for 310.779 million shares worth N3.166 billion in 3,289 deals, contributing 23.06% and 26.08% to the total equity turnover volume and value respectively.
Elsewhere, performance across sectors was broadly positive, as the Oil & Gas (+6.5%) index topped the gainers’ chart trailed by the Banking (+3.3%), Industrial Goods (+2.2%) and Insurance (+2.2%) indices. The Consumer Goods (-0.3%) emerged as the week’s sole loser.
The Financial Services Industry (measured by volume) led the activity chart with 892.212 million shares valued at N7.065 billion traded in 11,592 deals; thus contributing 66.20% and 58.20% to the total equity turnover volume and value respectively.
The ICT Industry followed with 110.067 million shares worth N776.402 million in 744 deals. The third place was Conglomerates Industry, with a turnover of 100.008 million shares worth N216.504 million in 788 deals.
With the moderation in the prices of bellwether stocks this week, we expect savvy investors to take advantage of this and make re-entry ahead of their H1-21 earnings announcement. However, we do not rule out the possibility of continued profit-taking activities. As a result, we think the local bourse will likely exhibit a zig-zag pattern. Therefore, we advise investors to take positions in only fundamentally justified stocks.
Global stocks stumbled this week as investors were rattled by the surge in COVID-19 Delta variant cases which raised fears that the vaccine-induced recovery may be truncated even as vaccination rates remain uneven globally.
In the U.S., the DJIA (-1.0%) and S&P (-0.7%) were on track to end a two-week bullish run as growing anxiety about economic rebound outweighed hopes of reflation trade even as investors awaited Q2 earnings releases from big banks. In Europe, the STOXX Europe (-0.5%) and FTSE 100 (-0.9%) were set for a weekly loss as renewed interest in treasuries drove a rally in bond markets and dampened appetite for risk assets amid ECB reduced stimulus.
Asian markets posted mixed performances, with the Nikkei 225 (-2.9%) poised to end the week in the negative territory as the declaration of a state of emergency in Japan sparked sell-offs. In comparison, the SSE (+0.2%) managed to eke out a gain despite lingering concerns about China’s cybersecurity crackdown as well as selloffs in tech stocks.
Similarly, the Emerging (MSCI EM: -2.9%) stocks also mirrored the downturn across global equities consequent upon losses in South Korea (-1.9%) which offset gains in China (+0.2%). Similarly, the Frontier (MSCI FM: -1.3%) declined following Kuwait’s (-0.4%) market losses.
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