SAT 03 JULY, 2021-theGBJournal- The bulls dominated strongly in the local bourse in three of the week’s five trading sessions, as investors cherry-picked stocks following H1-21 closure activities.
A total turnover of 1.021 billion shares worth N14.145 billion in 17,565 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.006 billion shares valued at N10.330 billion that exchanged hands last week in 17,165 deals.
Based on the preceding, the All-Share Index advanced by 1.5% w/w to close at 38,212.01 points. As a result, the MTD return printed 0.8%, while the YTD loss moderated to -5.1%.
Trading in the top three equities namely Guaranty Trust Holding Company Plc, Wema Bank Plc and Zenith Bank Plc (measured by volume) accounted for 213.871 million shares worth N3.818 billion in 3,023 deals, contributing 20.95% and 26.99% to the total equity turnover volume and value respectively.
Notably, proprietary traders’ buying interest in NESTLE (+10.0%) and bargain hunting in OKOMUOIL (+4.3%), DANGCEM (+4.0%), ACCESS (+2.4) and DANGSUGAR (+2.2%) drove the weekly gain.
Activity levels mirrored the market’s broad gauge as trading volume and value rose by 1.5% w/w and 36.9% w/w, respectively. Sectoral performance was broadly positive, as the Consumer Goods (+5.1%), Industrial Goods (+2.1%), Insurance (+2.0 %), and Banking (+1.3%) indices recorded gains. However, the Insurance (-1.0%) index emerged as the week’s sole loser.
The Financial Services Industry (measured by volume) led the activity chart with 721.728 million shares valued at N5.995 billion traded in 8,709 deals; thus contributing 70.70% and 42.38% to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 99.083 million shares worth N2.395 billion in 3,703 deals. The third place was ICT Industry, with a turnover of 72.718 million shares worth N3.407 million in 643 deals.
With the H1- 21 earnings season on the horizon, we believe investors will be looking for clues on the sustainability of the decent corporate earnings released for Q1-21.
However, we expect mixed market performance in the week ahead as bargain hunting in dividend-paying stocks will be matched by intermittent profit-taking activities. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.
Meanwhile, Global stocks posted mixed performances this week as investors traded cautiously ahead of U.S. nonfarm payroll data (released on Friday) to determine when the Federal Reserve will start tapering its asset purchase programme.
In the U.S, the DJIA (+0.6%) and S&P (+0.9%) were poised for a weekly gain as rapid vaccination alongside government stimulus and rising commodity prices supported investors buying interest in consumer staples industrials and energy stocks.
European markets (STOXX Europe: +0.1% and FTSE 100: +0.3%) posted marginal gains as investors awaited a closely watched U.S monthly jobs report amid growing optimism around a steady economic recovery in the Eurozone. In Asia, the Nikkei 225: (-1.0%) and SSE: (-2.5%) ended the week in the red as investors grew cautious about the possibility of a tightening of China’s monetary policy amid concerns about the reintroduction of lockdowns in the region following the rise in Covid-19 infections.
Similarly, the Emerging (MSCI EM: -0.8%) market stocks declined marginally, primarily driven by the sell-off in China (-2.5%), while Frontier (MSCI FM: +1.2%) market stocks recorded gains, primarily driven by the market rally in Vietnam (+2.1%).
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